Speaking alongside the former Vice President of the United States, Al Gore, and the Chief Executive of Christian Aid, Loretta Minghella at an event organised by the environmental think tank, Green Alliance, John Cridland argued that certainty and clarity of direction are critical to developing long-term business investment in a low-carbon future.
He also highlighted the need to keep up momentum on reaching a global solution by building on the UK’s hard-won credibility as a climate leader. This is his speech in full.
“Good morning everyone. Before I start – I’d just like to thank National Grid for their support and Green Alliance for organising this fantastic event. As we meet here this morning – I’m reminded of Jules Verne’s classic “Around the World in 80 Days”. Verne’s novel starts with a scene much like today.
“An early autumn gathering of “highly respected personages”, including many “princes of English trade”. Held at London’s Reform Club – about a mile from here. At the meeting, Phileas Fogg wagers 20,000 pounds that he can circumnavigate the globe in 80 days, returning to London by Saturday 21st December.
“And today – believe it or not – it’s exactly 80 days until the last day of the UN Climate Change Conference in Paris on Friday 11th December. This time, it isn’t just 20,000 pounds at stake. But the chance to give the world a sustainable future – both environmentally and economically. Unlike Phileas Fogg – today’s global challenges like climate change don’t carry passports. And they certainly don’t stop politely at national borders.
“With the UK responsible for 1% of global greenhouse gases – and the EU making up 11% – we’ll certainly need to do our bit. But global challenges need global solutions. And the only hope for a lasting solution will be to work with other countries from around the world. This is why Paris is so important. Al Gore has already set out a compelling case for climate action. And I’ll leave the scientific and moral case to others. But what I do want to do this morning is put forward a hard-nosed ‘business case’ for getting a good deal in Paris.
“So first-off, why does business care about this? Well, as any CEO will tell you – making decisions is all about weighing up the ‘costs’ and ‘benefits’. On climate change, both the ‘costs’ of doing nothing and the ‘benefits’ of seizing the business opportunity are clear.
“So here’s my first question. What happens if we don’t make progress? What happens if we stick our heads in the sand and just hope it all goes away? Well, the ‘costs’ are as clear as they are catastrophic. For businesses, the ‘value at risk’ costs could exceed four and a half trillion pounds by the end of the century. Supermarket chain ASDA estimates that 95% of its supply chain could be at risk from changing weather patterns and increased extreme events – which are both accelerated by climate change. And we’ve already seen how global technology companies in the US – in particular – had to stop trading when flooding in Thailand shut down the factories they relied on.
“But besides the ‘costs’ of inaction, the ‘benefits’ of seizing the opportunity and growing the green economy are also clear. We know the UK’s green economy has sales of over 120 billion pounds a year.
“And whilst people might describe ‘China’ or ‘India’ as ‘emerging markets’, the green economy is a high-growth ‘emerging market’ in its own right. Between 2010 and 2013, the green economy grew at more than 7% a year, compared to less than 2% a year over the same period for the UK economy as a whole.
“Today, 164 countries have renewable energy targets. That’s 164 potential markets worldwide for the UK’s renewable industry – for example. We’re already seeing British firms seizing these global opportunities – like Fosters designing the zero-carbon ‘Masdar city’ in Abu Dhabi or Blade Dynamics designing and exporting the world’s most advanced wind turbine technology.
“And the green economy has so much more potential – whether it’s renewable power, low-carbon transport, sustainable goods and services or ideas which haven’t yet got off the drawing board. A global climate deal can turbo-charge this.
“On climate change, avoiding the costs and seizing the benefits means taking the right action. Since 2009, we’ve come a long way. The cost of solar and wind have plummeted. Electric vehicles – once ‘science fiction’ – are now becoming ‘science fact’. And developments like smart grids and the ‘Internet of Things’ are transforming modern life.
“And here in the UK, our emissions are falling and our economy is growing. We’ve seen real progress – from both industries and individual firms. We’re seeing industries like steel, cement and glass – which use a lot of energy and produce a lot of carbon – setting out how they can reduce their emissions in the long-term. And companies like Unilever are already making the small changes which make a big impact. Compressing their deodorant packaging – for example – has already saved over 16,000 tonnes of CO2 from entering the atmosphere. We’ve also seen progress in the last parliament.
“We’ve built on the 2008 Climate Change Act to develop policies which will eventually decarbonise our economy. In fact, the Climate Change Act is a great example of how – by showing leadership in efforts for a global solution on climate change – the Government helped give business the certainty they need to invest. And – it’s important to say – that over many years, the UK has built up real credibility on climate leadership and low-carbon investment. This is hard won, but easily lost. And despite the progress so far, today’s investors are more uncertain about the UK’s low-carbon future. From the roll-back of renewables to the mixed messages on energy efficiency, these changes send a worrying signal about the UK as a place for low-carbon investment. Moreover, this seemingly weakened commitment risks impacting our standing on the global stage, at the exact moment we need to stand up and be counted.
“Yet in the last seven years, we have seen progress on the global scene. Whilst in 2008 the UK was the only country with a Climate Change Act – other countries have now followed suit – from Finland to Mexico. Indeed – one of the big lessons from Copenhagen was that change can’t be imposed on countries.
“The drive for change needs to come from the ground-up. So far, 55 countries have made commitments to the UN through their ‘Intended Nationally Determined Contribution’. An unexciting title hiding the fact that these 55 countries cover 60% of global emissions.
“In Europe, the 2030 targets are in place, with the Emissions Trading System supporting reductions. China, the world’s largest emitter of carbon dioxide has a plan to cap emissions by the end of the next decade, or sooner. And India has just raised the target for its national solar mission from 22 to 100 gigawatts by 2022. 100 gigawatts – that’s 25 times India’s current solar capacity.
“And in the United States, President Obama’s Clean Power Plan – which should survive legal challenge – will cut America’s power sector emissions by almost one third by 2030.
“Looking forward to Paris, I believe that we are in a better place politically than we were six years ago. Our political leaders won’t be heading to Paris expecting to thrash out all the details at the last minute – as was the case in Copenhagen.
“We know there’s still hard work to be done – but negotiators have been working hard for months already. More groundwork has been laid and there’s a much better understanding of nations’ concerns.
“At the moment, one of industry’s biggest worries is that if some countries go further or faster than others, it undermines competitiveness. This is a real concern. In 2014, British industry faced the fifth highest power costs in the IEA, while our energy intensive industries are paying 56% more than the EU average. Yet if all countries pull in the same direction, we can make sure that – where there are costs – the burden is shared more evenly. And Paris could give firms the certainty, clarity and confidence they need to invest.
“Above all – Paris will be a crucial opportunity for every nation to play their part to tackle climate change and help accelerate the low-carbon market in which businesses can grow and innovation can flourish. In 80 days – we want to see negotiators heading back to Charles De Gaulle airport with three ‘wins’ in their back pocket.
“First – a long-term foundation for reducing emissions, with agreement on how to ratchet up ambition on a regular basis.
“Second – a commitment to driving forward carbon pricing around the world. Whilst a truly global carbon market might not be realistic in the short-term, it must remain our long-term ambition. Paris must support this.
“And third – a solution for making finance and innovation more accessible. Today, just 10% of climate finance flows from OECD countries to developing countries. We must make sure developing countries can access the financial support they need for low-carbon energy and adaptation measures – especially from the private sector.
“So these are the three things that business wants to see. But in getting a deal in Paris – we must not sacrifice the good in the name of the perfect. I’m a ‘glass-half-full’ kind of guy. And what I do hope Paris can offer is a way to assess nations’ efforts and show that they are meeting the goals they themselves have set.
“Regular reviews will be important for making sure that countries – and the world – are on track for an ambitious reduction. And where more can be done, countries should be pressed to do so, safe in the knowledge that everyone is pulling their weight.
“I started today by mentioning ‘Around the World in 80 Days.’ At the end of Verne’s novel, Phileas Fogg returns to London thinking that he’s too late – and he’s lost the bet. When – at the 11th hour – his valet reminds him that as he’s travelled East around the world, he’s still got a day to spare.
“In the real world, we can’t rely on ‘chance’ to save us at the last moment. Avoiding tomorrow’s ‘worst-case-scenarios’ means taking action today. Here and now.
“But Paris won’t be the end of the journey – it’s the next step. It’s a chance to give businesses long-term clarity, drive investment and innovation and raise our ambition for the future.
“Like Verne’s novel, the journey won’t be easy. Many challenges lie ahead. And many questions still remain… How can we help developing nations get the support they need? How should nations be required to show that they’re cutting emissions?
“These questions need answers, but of equal importance is to keep our eye on the prize. And it’s important that business adds its voice to the chorus of organisations and individuals speaking out here today. Politicians and negotiators should be confident that business is behind them. But business also needs to be confident that a Paris deal will provide the long-term certainty they need to deliver the solutions to our global problems.
“So 80 days from now – on 11th December – I want the ink to have dried on a deal in Paris. Like most things in life – the deal won’t be perfect. Imperfection is the price of negotiation. But by working together, I’m optimistic that we can drive ourselves towards the pro-growth, low-carbon future that business wants and the planet needs. Let’s make this happen.
Responsible Energy Investments Could Solve Retirement Funding Crisis
Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.
Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?”
Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.
Tip #1: Focus & Determination
Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.
Tip #2: Minimize Spending
One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!
Tip #3: Visualize Your Goal
You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.
Investing in Clean Energy
One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.
With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.
The Future of Green Biz
As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.
Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.
In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!
What Should We Make of The Clean Growth Strategy?
It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?
The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.
A Strategy, Instead of a Plan
But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.
The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.
A 12 Month Green Energy Initiative with Real Teeth
But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.
Electrical Storage Development at Center of Broader Green Energy Push
While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.
The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.
But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.
This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.
Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.
In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.
It’s a step in the right direction. But, inevitably, there’s much more work to do.
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