1 December 2015

​Climate for thought

​Climate for thought
Now that the Paris COP21 Summit has started, it is a good time to assess why it seems so difficult to agree upon the “legally binding” agreement to reach the 2°C target that the UNFCCC (United Nations Framework Convention on Climate Change) has been trying to achieve since the Copenhagen COP15 summit six years ago.
 
Rather than “take sides” on both the rationale of and the urgency to mitigate climate change and limit the emissions of GHG (Greenhouse Gas emission), let’s be agnostic for a minute and just focus on common sense: when looking at the number and frequency of climate “events” lately, one is inclined to think that the “precautionary principle” should be applied immediately to protect our children’s environment (“a stitch in time saves nine”). So with this non-polemical perspective in mind, why is it so difficult to find a compromise on a binding Agreement among the 195 countries present in Paris?
 
I see reasons ranging from ethical, philosophical and economic concerns to very narrow, specific, self-centered interests that explain the state of play. Hopefully, these will be overcome in the debate and a reasonable binding Agreement can be reached before December 11th, 2015.
 
Since the early 19th century, as illustrated by August COMTE (and his “positivism” philosophy) the (western) world has held the strong belief that science and technology will (almost always) bring innovation, progress and social welfare. It is therefore counter-intuitive for most nations’ elites to acknowledge that technologies used by industry can potentially cause dramatic effects on climate.
 
Furthermore, Western economists (since Adam Smith) have invented a unique liberal economic model with “perfect” market functioning and natural market driven solutions to societal issues that are supposed to satisfy needs through the introduction of technologies and products. More recent thinking, from Von Hayek to Friedman, advocates as little government intervention as possible. However, when considering climate mitigation and adaptation, we are faced with a classical “market failure” when no solution is yet “naturally” coming from the “invisible hand” of the market. For states and governments, it seems almost impossible to intervene and regulate at a planetary level while a large number of citizens and companies do not trust them to efficiently achieve a real reduction of climate change enhancing activities. A lot of bold leadership is needed here.
 
And then there’s a final set of specific difficulties, the ones that media comment on most often, that boil down to the respective responsibilities of developed nations in climate degradation and consequently their need to share the burden of the efforts needed to adapt and mitigate it. The effects of globalization on the economy and the growing wealth of the world’s “richest nations” come into play as citizens in the old industrialized world are less and less inclined to pay for the least developed world. A few striking figures demonstrate how different perspectives nevertheless should lead to compromises:
 
1. As of 2020, experts foresee a figure of 150 Billion Euros needed per year to mitigate and adapt less developed countries to climate change.  Commitments from states so far amount to 10 Billion Euros per year. Is it reasonable to continue refusing a fair share in a financial effort merely representing 0.2% of the world GDP? Especially considering developed countries will benefit most from this effort through technologies and infrastructure construction? The longer we wait, the higher the damage, and with it the amount of money needed to repair it. 


2. The polluter-pays-principle is reasonable and we apply it already in the EU. A recent study[1] shows the “global inequities in CO2 emission” over a recent period of time. It concludes that the OECD countries emit way more greenhouse gases per inhabitant than the rest of the world. As can be expected, there is debate on the per capita versus per countries approach to emission, but consider: is it reasonable to ask the same efforts from the 3.5 billion people on earth that emit less than 2 t of GHG per year as you would the 700 million that produce 45% of the world emissions? Or the 70 million that emit close to 100t per year (this 1% of the population contributes close to 15% of global emissions)? Common sense says no, and it is likely that those heavy polluters will have to share more of the burden. 


3. The “cap and trade” system used to price non-emitted CO2 (Emission Trading System in Europe) shows its limits and neither provides funding for the magnitude needed to finance de-carbonization and adaptation nor a fair solution to the burden sharing efforts. We see it at the EU level. The same applies at the UN level. Additionally, a carbon tax would not prove more effective as far as the burden sharing is concerned. 


It is time for some disruptive thinking to come to as fair as possible a solution to share this burden and move forward. Politicians are in Paris to set the long term objectives, the verification/validation mechanism and the fair distribution of the funds needed to adapt and mitigate climate change. It is desirable, this time around, that once countries commit to this legally binding agreement, there is no plan B with an exit strategy as we saw in the Kyoto Protocol. Once these rules and principles are set for the long term, industry and business should contribute their fair share.
 
At Hill and Knowlton Strategies we provide support to our clients to better communicate their strategical messages to institutions, governments and stakeholders. When should we have a conversation about your thoughts for climate?
 
Alain Berger


[1] Trends in the global inequities in carbon emission (1998 to 2014), by Lucas Chancel and Thomas Piketty of the Paris School of Economics

Related contacts :

Alain Berger
Executive Strategy Director

email: alain.berger@hkstrategies.com