Transcript Elements of a good post-Kyoto agreement. What could business

Elements of a good post-Kyoto agreement.
What could business deliver if these elements were adopted?
World Business Council for
Sustainable Development
Björn Stigson, WBCSD President
Ny-Ålesund Symposium 2009
June 10, 2009
Svalbard
Ny-Ålesund Symposium, Svalbard – June 10, 2009
The World in Transition to Sustainability
Society
Economy
Environment
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The Future Society: A Growth Story
© 2008 POPULATION
REFERENCE BUREAU
World Population (in Billions): 1950-2050
Source: United Nations Population Division, World Population Prospects: The 2006 Revision.
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Development: The Poverty Challenge
 Income poverty:
Over 2 billion people live on less than $2/day
 Energy poverty:
1.6 billion people today without access to electricity
 Mobility poverty:
900 million people without access to transport
 Water poverty:
1.8 million deaths per year due to lack of sanitation, poor
hygiene and unsafe drinking water.
 Sanitation poverty:
2.5 billion people without access to hygienic sanitation
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The Future Society: Shifting Fortunes
Emerging Economies more than half of Global GDP
% Share of GDP
From The Economist print edition.
“Wrestling for influence.” July 3rd 2008.
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The Future Society: Urban
70% urban
(Billions of inhabitants)
urban
60% urban
rural
47% urban
6.4
36% urban
5.0
2.4
2.9 3.2
3.3
2.8
1.3
1970
2000
2030
2050
Source: United Nations, World Urbanization Prospects: The 2007
Revision
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The World in Transition to Sustainability
Mindsets
Society
Economy
Environment
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The World in Transition to Sustainability
Solutions
Society
Economy
Environment
Regulations
Technology
Mindsets
Infrastructure
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Transition to a Low Carbon Economy
Geography
Solutions
Society
Economy
Environment
Infrastructure
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Regulations
Technology
Mindsets
IEA’s World Energy Outlook 2008
 Current energy trends are patently
unsustainable – socially, environmentally,
economically.
 To avoid “abrupt and irreversible” climate
change we need a major decarbonization of
the world’s energy system.
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Global emissions scenarios
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Source: IEA. ETP 2008
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Reductions in energy-related CO2 emissions
in the climate policy scenarios
Source: IEA. WEO 2008. Presentation by Dr. Fatih Birol
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Energy Efficiency
Average annual percent change
3%
Hypothetical energy use without energy efficiency improvements
2%
Energy
efficiency
improvements
Energy
efficiency
improvements
1%
Actual energy use
Actual energy use
0%
1973 - 1990
1990 - 2004
Source: Energy Use in the New Millennium (IEA, 2007)
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Barriers to energy efficiency
 Low price of energy due electricity and fuel
subsidies
 Absence of performance standards or lack of
regulatory incentives
 Lack of environmental awareness
 Lack of information about:
– Potential savings
– Options
– Expected life cycle cost
 Fragmented value chains and lack of
cooperation between parties involved
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Existing technology
 Technology deployment
– Key for energy efficiency and short/medium
term emission reductions
 Technology transfer to developing countries
– Lack of understanding of how technology
diffusion happens
– Lack of capacity/capability to absorb technology
– Intellectual Property Rights (IPRs) – an issue?
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New technology
 Technology development
– Need for huge increase of R&D funding to
achieve technical breakthroughs for key
technologies
– CCS
– Next generation of nuclear
– Renewables
– This will require a new public-private partnership
 Technology acceptance?
– Nuclear
– Big hydro
– Biofuels
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Carbon markets
 Key objective:
Establish a price for carbon
 Carbon market doubled from 2007 to 2008
– Total value in 2008: 126 BUSD
– Allowances and derivatives under EU ETS:
92 BUSD
– Secondary market for CERs: 26 BUSD
 Clean Development Mechanism (CDM)?
– Re-design or complement with new,
dedicated, flexible market mechanisms?
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Carbon markets
 A global carbon market?
 Cap & trade established in the EU and
debated in US, Japan & Australia
 How to link national carbon markets?
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Infrastructure
Major opportunity for companies to provide
systems solutions, products, and services
for “smart” and resource efficient
infrastructure:
 Buildings
 Transport
 Energy
 Water
 Communications
 Waste
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Final energy use by sector in the Baseline,
ACT Map and BLUE Map scenarios
Source: IEA. Energy Technology Perspectives 2008
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Energy Efficiency in Buildings (EEB)
Project
 First phase:
Facts & Trends Report published 2007
 Second phase:
A plan for transformation of the building sector
and a roadmap for reduced energy use in
buildings.
– Launched in April
 Next step
An EEB Manifesto to mobilize all WBCSD
members for EEB actions
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“Energy Efficiency in Buildings:
Transforming the market”
• Key conclusions:
– Market forces alone will not achieve what is
required.
Too few incentives and too little awareness
and desire to change.
– Current policies are insufficient
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Project recommendations summary
A holistic approach
1. Strengthen codes and labeling
2. Incentivize energy efficient investments
3. Encourage integrated design approaches
4. Develop and use advanced technology to
enable energy saving behavior
5. Develop work force capacity
6. Mobilize for an energy aware culture
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What will it cost to realize the EEB
objectives?
• Objective 2050:
– 50% reduced energy use in buildings in the six “EEB
regions”
• Costs
– 150 BUSD net investments/year to reduce energy use by
40% with payback time of less than 5 years
– A further 150 BUSD net investments/year to reduce
energy use by an additional 12% with payback time of
5-10 years
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Electricity Utilities Project
 Launched Power to Change: A business
contribution to a low-carbon electricity future at
COP 14 in Poznan
 Outlines a roadmap of sector specific national
and international policy recommendations to
address climate change.
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GtCO2 reduction to 2050
CO2 reduction within the power generation sector by
contributing factor based on ACT Map and BLUE
Map scenarios
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Cement Sustainability Initiative
 Initiated in 2000, 18 leading cement companies
 Represent some 60% of global cement
manufacturing outside of China
 However, 50% of global cement production is
in China
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Comparison of scenario outputs:
CO2 emissions
projections
• Emissions
increase in all cases from 2005-2030
• Impacts occur late in the scenarios, if at all
• Only ‘Global caps’ ‘Global goals’ Model
& ‘a sectoral
show
reviewedapproach’
by IEA, LBNL
andimpact
RITE on emissions
Cement demand forecast from International Cement Review and JP Morgan
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Sustainable Forest Products Industry
 20% of global carbon emissions come from
cutting down forests.
 Reducing and/or preventing deforestation is an
important climate mitigation option.
 Under CDM, developing countries can
implement afforestation and reforestation project
activities.
– But avoided deforestations is not eligible for
carbon credit.
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Finance I
 85% of global investment flows come
from the private sector
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Figure source: World Bank (2007). An investment framework for
clean energy and development. Original source: IEA and
PricewaterhouseCoopers.
Finance II
Financing the electricity needs of the developing world through 2010
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Finance III
 Actions to increase financial flows to
developing countries
– Reform of the Clean Development
Mechanism
– Establishment of new market
mechanisms
– Increased ODA
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GHG Protocol – a tool for implementation
 Tool for measuring & reporting GHG emissions
developed with WRI since 1998
 MOU with ISO
Activities
 Capacity building programs in China (ongoing),
Brazil (August 2008)
 Multi-stakeholder process to develop new
supply chain accounting guidance and
standards: business, government, academics
and organizations
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Advocacy: UNFCCC process
 "A new framework must make
business sense if it is to succeed."
Yvo de Boer
 "What policies do you, as Business,
want to see in a new global
framework?”
 COP14 – Poznan (Dec 2008)
– Business Day
– Business Ministerial Breakfast
– Side events
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Towards a Low Carbon Economy
WBCSD Low-carbon Economy report launched
at Bonn UNFCCC Meeting in March 2009
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Climate Change –
A transformational challenge for society
 A society that emits 50% less GHG
emissions by 2050 will look very different
 Major impacts on lifestyles, consumption
patterns and infrastructures are likely
 The transformation will not be easy
There will be winners and losers
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A World in Transition to Sustainability
 The world cannot succeed without
Business as a committed solution
provider to sustainable societies and
ecosystems.
 Business cannot succeed in societies
that fail.
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www.wbcsd.org
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