How business might just save the climate

Business – widely, and wrongly, seen as the enemy of the environment - is the force with the best chance of averting dangerous climate change. And far from stifling economic growth, as some Greens would like, developing a low carbon economy would accelerate it.

Such are among the conclusions of a new report, published today by an international commission headed by the British economist Lord Stern and Felipe Calderon, the former President of Mexico. It should shake up conventional thinking on global warming and the economy at what is a particularly pivotal time.

A climate summit in Paris, designed finally to seal an international agreement to tackle climate change, is now less than five months away and the pressure for a deal is building up. In the last month alone, the G7 summit in Germany pledged eventually to phase out fossil fuels, Prince Charles called for them to stop being subsidised and the Pope issued a rare encyclical on global warming.

^{Lord Stern (Photo: CRIS BOURONCLE)}

Countries are increasingly submitting pledges of what they will do to reduce their emissions of greenhouse gases, promises that will form the basis of any agreement forged in Paris. But it is clear that, when they are all added up, they will not be ambitious enough to prevent average global temperatures exceeding two degrees celsius above those of pre-industrial times - the internationally-agreed level at which dangerous climate change becomes likely.

The report says that the effect of the pledges would be to limit the increase of emissions of greenhouses gases from the present equivalent of 49 gigatons of carbon dioxide to at least 55 gigatons by 2030. That is much better than the 69 gigatons that would be emitted if no-one did anything, but far above 42 gigatons, the maximum we can afford if we want a better-than-evens chance of staying beneath the two degrees limit.

That is where business comes in. For once it's clear that more money is to be made in getting ahead of the curve than sticking to the old ways, business tends to move with astonishing speed, often exceeding officially-set pledges. “If you allow the private sector to take action and make profits, we can move faster than through Government action," said Calderon yesterday.

Felipe Calderon (Photo: AP)

Indeed, in some ways it is already beginning to happen. Since 2013 the world has added more electricity generation capacity annually from low-carbon sources than from fossil fuels. By 2020, the report estimates, it will be twice as much; ten years later, over four times as much. Businesses, it adds, are already driving a global market for low-carbon goods and services that is worth $5.5 trillion, and is growing by three per cent annually.

“Businesses are already preparing for a low-carbon future, and in many ways are ahead of the curve," says Paul Polman, CEO of Unilever. He serves on the commission, along with the Presidents of the Asian Development Bank and the European Bank for Reconstruction and Development, the Chairman of Royal Dutch Shell, the CEO of Swiss Re, the Executive Director of the International Energy Agency, and a raft of other non-green luminaries.

The report – which proposes ten measures that it says between them will do 96 per cent of what is needed to reduce emissions sufficiently - also stresses that they offer the best hope for continuing growth. It says “a goal once seen as distant – to end extreme poverty, achieve broad-based prosperity, and secure a safe climate – is increasingly within reach”, adding: “Countries at all levels of development can build stronger economies while substantially reducing climate risk”.

“Growth versus the environment is a false dilemma," Calderon adds. “This report shows that success is possible: we can achieve economic growth and close the dangerous emissions gap." Stern goes so far as to say: “this is the only growth story that is on offer”.

It is a long way from the anti-growth rhetoric of some early environmentalists – or of the Green Party today – but it has an infinitely greater chance of saving the planet.