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Letter from Davos - Day 4
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Guest writer Mindy S. Lubber is President of Ceres and the Investor Network on Climate Risk

Flying home (sleep deprived) from five intensive days and nights at the World Economic Forum in Davos, Switzerland, I am trying to draw a few clear conclusions that I can share with my family, friends and colleagues.  The Forum covered myriad issues from trade, famine, Middle East unrest, and climate change, to name just a few.  What emerged, most clearly in Davos, whatever the issue, was a clear consensus that unilateralism in our interdependent world is unacceptable.

"Despite the multiple challenges we face in the world today, I am optimistic," said British Prime Minister Tony Blair in the closing address.  "The issue of global climate change hangs in the balance, yet despite the significant challenges and substantial despair, there is progress that would have been unimaginable even a short time back." Personally, I am less sanguine, but I am trying, desperately, to share the Prime Minister's optimism.

When I first arrived in Davos, I was encouraged by the high level of attention being devoted to climate change – perhaps the most consequential problem ever confronted by humankind – and the emergence of new and powerful voices calling for action every day. But there were other voices in Davos that gave me pause. Business and political leaders from China and India, not surprisingly, insist they will not slow their economic growth, cannot focus on climate change before focusing on poverty and famine, and will not scrap plans for some 500 new coal-fired power plants over the next two years unless they see leadership from the rest of the world. That dented my optimism.  

The CEO of a leading US power company talked passionately at Davos about tackling climate change and acting quickly. Yet, just one week earlier, this same CEO was testifying to his state Public Utilities Commission on why he’d be pushing to ‘grandfather’ a proposed coal-fired power plant, with no CO2 controls, that his company wants to build in his home state. That soured my optimism.

So, is the news on climate change from Davos good or bad?

To be sure, the task of arresting climate change is massive.  I wondered. Do the new converts to the cause understand we are talking about the need to lower our carbon footprint by 70 percent over the next 40 years or so? And that to do that we will need a nearly unanimous commitment across the globe that begins now? That we need binding, enforceable international agreements for carbon reduction within a few short years?

Prime Minister Blair noted that the Kyoto Protocol, with over 100 countries coming to an agreement to reduce carbon emissions, was a solid achievement. Even if implemented, however, Kyoto would only stabilize emissions, not reduce them. And with three of the world’s largest economies, two of them among the world’s most populous nations, on the sidelines – the U.S., China and India – we cannot get the job done.
 
I found myself trying to share Mr. Blair’s optimism that we are on the verge of a breakthrough – that the world is, at last, reckoning with the peril of climate change. On the bright side, German Chancellor Merkel declared at Davos that climate change would be her top priority as leader of the G8. China and India are also participating constructively in the G8 + 5 Climate Change Dialogue.  "These countries want to be a part of the solution and they know as well as anyone, that they will suffer if the environment degrades further," Mr. Blair said. "They have every reason to be part of a deal, provided it is one that allows them to grow their economies so that they can spread the prosperity they are creating to the millions in those countries still in poverty."

Many parties agreed that the world is ready to start discussions for a new international agreement – an agreement that must include all major countries and one that is far more aggressive and far reaching than the Kyoto Protocol.

Closer to home, I am buoyed by the fact that Congress and its new leadership is making climate change a priority. And even the Bush Administration, which for six years has ignored all the science and all the warning signs, is finally recognizing that we have a serious problem. Unwilling to wait for the federal government to act, many states are enacting laws to curb greenhouse gas emissions, mayors are changing city policies, and many top corporate leaders are agreeing on the need for mandatory action. Increasingly – and it was clear at Davos – businesses are understanding the economic risks of climate change and the opportunities. Sustainability issues cannot be optional, but rather a necessary core part of any corporate mission. The far-reaching consequences of climate change make it clear that sustainability issues are not a luxury to be indulged in to create a good corporate image, but a necessary high-priority that will have important bottom-line implications.

Finally, I am encouraged that the public, the force that will be the true driver of progress on climate change, has awakened and is acting. Global warming is now seen as a moral and personal issue debated at our dinner tables and in the marketplace of ideas.  John Doerr, the highly successful venture capitalist, said in Davos that he woke up to the issue when his 15 year-old daughter told him that his generation created the problem and had a responsibility now to fix it.

So, there are signs of hope from Davos. There is a greater sense of urgency.  "Imagine over the coming months the world agrees and over the coming years, it acts," said Prime Minister Blair as he closed the conference. "Think how attractive our story of the world's progress would be. Then think of failure and who will weep and who will rejoice. Think of all of this. Then let us agree. Then let us act."

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Comments

very interesting and insightful. sounds like a lot of focus and positive news from our political leaders on the issue. thanks.


Posted by: Brock on 30 Jan 07

The one aspect that doesn't get enough attention is education. No one trusts politicians enough to really believe what they say. Celebrity support always has a "what's he getting out of it" feel to it too. What is needed is a way to educate people out there on the importance of the environment, the way it can be harmed, etc. We need to influence the individual, not just corporations.

Take India as an example. When a significant chunk of the populace is too busy making ends meet, they are not going to worry about the environment, unless they are taught to appreciate it at a grassroots level. It's a small step, but an essential one. Then they really care about what their leaders are saying and why.


Posted by: Deepak on 30 Jan 07

One issue that demands considerably more reflection in this debate is the linkage between poverty and climate change, and the potential role for grassroots driven carbon sequestration through avoided deforestation, and the eventual marketing of locally sequestered carbon through evolving market mechanisms.

to date the world has been either apathetic or averse to looking at this issue either becasue it is not part of the first world's perception on the locus of the problem and the solution, or becasue many fear this will further contribute to greenwashing even should such a system and set of mechanisms be established and function.

No matter how you cut it, data shows that up to 20% of the CO2 contribution comes from "poor people landscapes". Furthermore, the potential to mobilize poor people to sequester carbon on their own through feasible incentives to better sequester that carbon through improved soil management (charring versus slash and burn for example), or through payment by those seeking offset credits for avoided deforestation ( a "soft" and unrealistic proposal to some, and a potentially innovative and equitable proposal for others...), rquires serious exploration in parallel to the standard locus of debate involving reducing the imprint of the biggest emitters, that is finally gaining momentum.


Posted by: Michael Brown on 31 Jan 07



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