THE GLOBAL COMMISSION ON THE ECONOMY AND CLIMATE Better Growth, - - PowerPoint PPT Presentation

THE GLOBAL COMMISSION ON THE ECONOMY AND CLIMATE

Better Growth, Better Climate: The New Climate Economy Report

November 2014

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The New Climate Economy Partnership:

Global Commi missi ssion

• n

24 global leaders : ex-Presidents and Finance Ministers, major CEOs, heads of the main international economic Organisations Chaired by former President of Mexico Felipe Calderón

Economic mic Adviso sory y Pa Panel

14 world leading economists, chaired by Professor Lord Nicholas Stern Includes: Two Nobel prize winners: Daniel Kahneman and Michael Spence

7 Commi missi ssion

• ning

ng Countries

Colombia Ethiopia Indonesia Norway Sweden South Korea United Kingdom

8 Pa Partner er Research Institut utes

Climate Policy Initiative (USA) Ethiopian Development and Research Institute Indian Centre for Research on Economic Relations Global Green Growth Institute (South Korea) Overseas Development Institute (UK) Stockholm Environment Institute (Sweden) Tsinghua University (China) World Resources Institute (USA)

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• The next fifteen years will see the global economy undergo a deep

structural transformation. Whatever choices are made business, along with the rest of society, there is no “business as usual”:

• The global economy may grow by more than half
• A billion people are likely to come to live in cities
• Technology will continue to transform business and lives
• Around US$90 trillion will be invested in key economic infrastructure
• There are major opportunities in three key economic systems: cities, land

use and energy. The private sector is fundamental to all three of these economic systems, and will be involved in and transformed by the drivers

• f change.
• Economic growth and action on climate change can be achieved together.

We do not need to choose.

Main findings of the Commission:

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Summary of Implications for Business There are key opportunities for business in:

• Cities, land use and energy sectors, especially for infrastructure and

growth markets in developing countries;

• Energy and resource efficiency markets, including companies

investing in circular economy and remanufacturing;

• Innovative, low-carbon business models.

There are key risks for business:

• In high-carbon sectors with exposure to potential stranded assets,

particularly coal.

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Key drivers of growth and climate performance

RESOURCE EFFICIENCY INNOVATION INFRASTRUCTURE INVESTMENT

HIGH QUALITY, RESILIENT, INCLUSIVE = BETTER GROWTH ENERGY LAND USE CITIES

WIDER ECONOMY

5 SOURCE: LSE Cities based on United Nations World Urbanization Prospects, 2007 Revision)

The 200 00 larges gest t metrop

• polit
• litan

an econo nomi mies es accoun unt t for 20% 0% of globa bal l pop

• pulat

lation ion ye yet generat ate e 46% 6% of glob

• bal

l GDP. . The urban anisat isatio ion trend nd presen sents ts signif nifica icant nt oppo portu tunitie ities s for busine sinesse sses. s. Billions

2 4 6 8 10

2050 2040 2030 2020 2010 2000 1990 1980 1970 1960 1950 Glob

• bal

al populat pulation ion Urba ban n popu pulat lation ion Ru Rural al popu pulat lation ion 70% 0% Urba ban 50% 0% Urba ban 30% 0% Urba ban

CITIES: 70% of the global population is expected to be urban by 2050

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• Tropical Forest Alliance 2020 was

started by The Consumer Goods Forum (CGF) and the US Government with the aim to help achieve zero net deforestation by 2020 – one of its focus areas is encouraging sustainability of palm oil

• Indonesia and Malaysia produce

around 85% of the world’s palm oil and are the largest exporters

• Companies such as Tesco, Carrefour,

Nestle, Unilever, IKEA, L’Oreal have committed to purchasing only sustainable palm oil

• Countries such as The Netherlands, Belgium

and the UK have all pledged to import 100% certified palm oil by 2015 +114% pa pa

1 RSPO is the main body that certifies whether palm oil is sustainably produced or not. Its criteria include that no primary forest was cleared for plantation Source: http://www.rspo.org/file/CSPOUptake&Production-Charts-MAR.pdf, Guardian, epoil.co.uk, wwf.org for proportion of total market figures (http://wwf.panda.org/what_we_do/footprint/agriculture/palm_oil/solutions/roundtable_on_sustainable_palm_oil/)

Certif tified ied sustain ainab able le palm lm oil supp pply ly over r time Millions of tonnes Pe Percen cent t of total l palm lm oil that is certif tified ied by by Ro Roundt undtab able le on Sustain ainab able le Pa Palm lm Oil l (RSP SPO)1 ~15% ~10%

0.2 1.4 2.8 4.8 6.7 7.4

• 1.0

2.0 3.0 4.0 5.0 6.0 7.0 8.0 2008 2009 2010 2011 2012 2013

LAND USE: Business and Government international cooperation is already occurring based on self-interest

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ENERGY: Wind and solar power have become cost-competitive in several markets, even without subsidies

Source: REN21 Renewables 2014 Global Status Report; Deutsche Bank Markets Research; IEA 2013 Wind Roadmap.

Chile: First solar plant with no govt. support U.S. southwest: Solar plant at ~8 ¢/kWh, competitive with coal South Africa: 7 ¢/kWh wind, 30% cheaper than new coal Brazil: 4.5 ¢/kWh wind, cheaper than any other source Parts of India: Wind at 6-10 ¢/kWh, close to coal at 5-8 ¢/kWh U.S. Wind at 5-8 ¢/kWh, cheaper than new coal Wind also reported competitive with coal in Australia, Chile, Mexico, New Zealand, Turkey. Rooftop solar cheaper than electricity retail rates in at least 11 countries

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Oil and coal recovery 108 Road freight shift 892 Other Irrigation techniques 115 106 Power plant efficiency 115 End-use steel efficiency 132 Land degradation 134 Electric and hybrid vehicles 138 Transport efficiency 138 Smallholder farm yields 143 Iron and steel energy efficiency 145 Urban densification 155 Municipal water leakage 167 Food waste 252 Large scale farm yields 266 Building energy efficiency 696 Steel Land Energy Water

SOURCE: Resource Revolution, McKinsey Global Institute

Total al resour urce ce benef nefit it $ billion (2010 dollars)

RESOURCE PRODUCTIVITY: There are ~$3.7 trillion worth of resource productivity gains to be made globally

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INVESTMENT: Infrastructure capital spend is estimated to be marginally higher in a low-carbon scenario

Source: OECD (2006, 2012), IEA ETP (2012), modelling by Climate Policy Initiative (CPI) for New Climate Economy, and New Climate Economy analysis.

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Media dia Auto Auto-mot

• tiv

ive Tele- comm mm Sect ctor

• r

Digit ital al impa pact ct

▪ Online entertainment streaming through

Netflix, Youtube

▪ Group online gaming such as World of

Warfare

▪ Online communities ▪ Remote software updates ▪ Vehicle-to-Vehicle communications ▪ Advanced image recognition ▪ Control system ▪ Navigation & online access ▪ Car sharing ▪ Over 1 million apps for Apple products ▪ High-speed mobile internet ▪ Virtualization of many services (alarm

clocks, payments)

▪ Online booking ▪ 3D printing of engine parts ▪ Advanced global GPS systems &

navigation

▪ Autopilot

New materi erials als impa pact ct

▪ Optical fiber broadband ▪ MEMS chips allow for motion detection

(e.g. Wii Fit)

▪ Touchscreen ▪ Battery cost being driven down, making

EVs competitive

▪ Carbon fiber to make cars a fraction of

the weight and higher performance

▪ Safer LED tail-lights and headlights ▪ Touchscreens ▪ OLED and LED screens ▪ Sapphire glass for cameras, fingerprint

sensors and unbreakable surfaces

▪ Batteries ▪ Carbon fiber fuselage ▪ Biofuels as jet fuel ▪ More efficient geared turbo-fan engines

that save 20% of fuel Aviat iation ion

INNOVATION: Digital capabilities and new materials are transforming sectors

11 SOURCE: Partnership for Market Readiness, Carbon Finance at the World Bank, EcoFys

POLICIES: A number of countries have or are developing emissions trading schemes at a national or regional level

Existing, emerging and potential emissions trading schemes

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A different growth pathway

RISKY BUSINESS TODAY LIMITS S TO GROW ROWTH TH Growth th performa rmanc nce

Good Bad Bad Good

Climat ate performa rmanc nce NEW CLIMATE TE ECONOM OMY

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Next steps

The Global Commission recommends 10 transformative actions

Source: NCE. For details please see the NCE Global Action Plan (2014)

1 Integrate climate risk into strategic decisions Secure a strong international climate agreement End perverse subsidies Price carbon to send a clear market signal Scale-up low-carbon innovation Reduce the cost of capital for low-carbon investment Move toward connected and compact cities End deforestation Restore degraded lands Phase out unabated coal fast 2 3 4 5 6 7 8 9 10 10

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Next steps

The Global Commission's recommendations for businesses

Source: NCE. For details please see the NCE Global Action Plan (2014)

Integrate climate risk and carbon reduction into core business strategy Provide public integrated financial and environmental reporting Adopt shadow carbon pricing Work to increase energy and wider resource efficiency Strengthen collaborative sectoral initiatives, particularly in areas with high emissions and high international trade flows Align advocacy and lobbying efforts behind better climate regulation 1 2 3 4 5 6

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The role for business leadership

Demonstr tratin ting that busin siness ess performan rmance ce and clima mate action go togeth ther Challen lengin ging Govern rnments ents to step p up up Shaping ing the industr try

• Making products more

efficient, more circular and more profitable

• Changing internal incentives
• Educating the investment

community on economic benefits

• Pushing them on stretch

policies and targets

• Investing in those locations

with sound resource governance

• Accelerating the international

R&D race

• Getting after serious

voluntary self-regulation initiatives

• Getting out of third-rate

industry associations

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Assessment for the role of business particularly in advancing the Global Action Plan

What recommendations from the Global Action Plan are you company or sector already implementing or seeking to implement? Who are the individuals and companies that could be the most effective ambassadors of the New Climate Economy Report? What are existing barriers to accelerate the shift towards a low- carbon, climate-resilient path of growth?

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NCE and Business Collaboration

NCE suppor

• rt

t for busines inesses ses

• Providing an evidence-base for low carbon actions
• Highlighting best practices by business

Attending nding major

• r events

ts

• Senior NCE representatives and Global Commissioners to take part in events (as keynote

speakers or panelists)

• Presenting NCE messages and explaining their relevance to business audiences

Engaging ging in high level meeti ting ngs

• NCE to take part in private meetings will high-level business representatives and their

networks, providing sector-specific insights

Communic municating ating messages sages via promine minent nt media ia outlets ts

• Businesses to disseminate NCE messages across different media platforms, including print,

broadcast, social media, website and partner networks Approach: Cross-promoting messages through events, high-level meetings and media

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New Climate Economy

• Download full report, sign up for our mailing list &

get in touch : www.newclimateeconomy.net

• Follow up on social media:
• Follow us on Twitter @newclimateecon
• Find us on Facebook: search New Climate

Economy

• Ian.deCruz@newclimateeconomy.net
• Global Strategic Engagement Director

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Source: Tesla motors website, scdigest.com, autonews.com

Triggering competitive response

Transforming the auto industry

• Tesla market cap: $26bn

~25,000 cars sold in 2013

• GM market cap: $54bn

~9.7 million cars sold in 2013

Promoting new materials Pioneering batteries and energy storage

INNOVATION: Tesla motors is challenging the status quo in many industries, and creating huge wealth in the process

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INNOVATION: Google is becoming one of the biggest “clean tech” companies on the planet

Source: Google, Greentech Media