29 June 2009: A climate business plan

Jeremy Rifkin, president of the Foundation on Economic Trends (see About Jeremy Rifkin), who is an adviser to the European Commission and several European governments, and author of excellent books on climate and energy, says that the Copenhagen Climate Summit in December should focus, not on targets and constraints, but on a climate business plan.

He is right.

Targets are necessary to focus public, political and business opinion on the need to control climate change, but the transition to a low carbon economy brings enormous economic, social and energy security advantages. These should be spelled out and – even more importantly – practical ways of reaching them outlined. China and India have much lower historical and per capita emissions than the US and EU, so telling them to constrain their economic growth is morally questionable, as well as politically pointless. Both have immense renewable potential and, in India in particular, solar lanterns and cookers could massively improve the lives of millions of people who do not get electricity from the grid. The urgent need is to draw up, and finance, a global business plan that will not only control climate change, but will also secure much greater and more equitable economic development. Rifkin describes this as a third industrial revolution. The first was based on coal and steam, with the second based on oil and the internal combustion engine. The third will be based on renewables, and involve making every building its own power station. I met Rifkin last Thursday (25 June 2009) and will now try to help him promote his ideas with UK politicians.

British Prime Minister, Gordon Brown, last week called for a global fund of $100 billion to transform the global economy into a low carbon one, and help countries adapt to the effects of climate change, such as disease, drought and floods, that are now inevitable (given greenhouse gasses already in the atmosphere). It’s often said that Brown is more suited to running the global economy than being prime minister of the UK, and there’s some truth in this. He is genuinely committed to tackling poverty, with particular focus on Africa. Like Blair, his international climate position is progressive but, again like Blair, delivery of low carbon opportunities in the UK is weak, and the UK government’s approach to transport is terrible.

Last Friday, the US House of Representatives passed a bill to introduce a cap-and-trade system to reduce greenhouse emissions. This is a welcome step, but it still has to get through the Senate, which has often been more opposed to climate action than the House. The promised reduction is not nearly enough, but it is much better than no proposed reduction – which was essentially the Bush approach. However, to accuse Obama and Energy Secretary Steve Chu of playing politics rather than following the science, as some environment groups have done, is an odd criticism. They are, after all, politicians. The Union of Concerned Scientists, which brings together US scientists wanting action on climate change (and many other issues), supports to Bill.

The EU cap-and-trade scheme (the Emissions Trading System) is far from perfect. The price of carbon is much too low, and will remain so even once permits are auctioned rather than given away. However, it has at least focussed attention, including that of businesses and industrialists, on the need to use energy more efficiently and reduce emissions. A carbon tax would be a preferable policy instrument, but it won’t be introduced – certainly not at an effective rate – in the EU, or indeed the US. Jacques Delors spent his entire time as EU Commission President promoting a carbon/energy tax, but with no significant success. Creating a single market across the EU proved an easier task than getting an EU carbon tax. Therefore, cap-and-trade systems should be supported, and we must use the consequent increased business attention on climate change to draw up a climate business plan.

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