Climate Change news and comment CCB 116

March 25, 2011

The recent report from Accenture and Barclays provides a daunting yet important forecast on the amount of investment required to meet the EUs 2020 emissions targets. The danger with such an analysis is that people tend to forget what it is that we are paying for.

It seems to me there has been a noticeable shift in the debate about climate change. Over recent years, dire warnings about the consequences of global warming have given way to commentators asking ‘Are emissions targets too high?’ and ‘Can we even afford to meet them?’

Trying to provide a sensible estimate of the financial cost of low-carbon technologies is essential in making intelligent investment decisions. Presenting the data in this way, however, runs the risk of missing the wider opportunity cost of climate change prevention.

It is important that people understand both the long-term costs of climate change and the long-term benefits of proactive prevention.

Reading about the steep costs of climate change prevention amidst a backdrop of severe spending cuts and unemployment is potentially destructive to the cause. It is important to reiterate the benefits of these investments. People need to be aware that extreme weather could cut global GDP by 1% – this doesn’t sound like much, but considering global GDP last year amounted to around $60 trillion, it becomes a significant figure. There are also thousands of jobs created in the process of tackling climate change.
In thinking about investment in this area we need to make sure we reiterate the issues that do not necessarily come with monetary value. It’s difficult, after all, to put a figure on the potential costs of a one to four degree temperature rise in the coming century, but the environmental degradation that this entails must be taken into account.

Stephanie Caun has an MA in Corporate Social Responsibility. She is currently on an internship at Corporate Citizenship.
Contact her at stephanie.caun@corporate-citizenship.com

Europe must invest €2.9trillion to meet 2020 emissions goal

A study published in Febuary by Barlcays and Accenture found that the banking sector will be pivotal to financing Europe’s transition to a low carbon economy and will finance and intermediate the vast majority of the €2.9 trillion needed to implement low carbon infrastructure. This funding will be required for the development, procurement and implementation of 15 commercially viable low carbon technologies from 2011 – 2020 which will enable Europe to bring its emissions to 83% of 1990 levels by 2020. The Carbon Capital Report also highlights that the funding will need to be split between the procurement and implementation of technologies and the research, development and production of these low carbon solutions, including research into energy efficient buildings, smart grid distribution, renewable electricity and solar and and wind infrastructure.

Contact: Barclays
www.barclays.com

Carbon Trust funding cut by 40%

The Carbon Trust is negotiating with potential private sector partners to plug a 40% funding gap caused by Government spending cuts. UK Government grant funding for 2011-12 will be around £50 million. The Trust’s chief executive, Tom Delay has said that while public sector funding will remain a crucial part of the organisations work the cuts will mean it has to seek more private sector partnerships. He also explained that ensuring that the private sector takes action on environmental issues will be “criticial to delivering a low carbon economy.” The partnerships will also offer the opportunity to rapidly scale up and expand the organisation’s work in both the UK and overseas to ensure maximum impact.

Contact: The Carbon Trust
www.carbontrust.co.uk

UK firms leading the fight against deforestation

The Forest Footprint Disclosure (FFD)’s second Annual Review highlights the good performance of British companies including British Airways, Drax Group, Marks and Spencer, J Sainsbury plc and Reed Elsevier, which all lead their sectors. The project run by FFD is designed to improve corporate understanding of a ‘forest footprint’ generated by the use of key forest risk commodities: soy, palm oil, timber, cattle products and biofuels. Andrew Mitchell, Chairman of FFD stated that “190 Governments have now recognised halting deforestation is a key world priority – businesses should do the same.” FFD called on more businesses to recognise the importance of changes in regulation and policy relating to protecting forested lands and the need for managements to assess their risk exposure in more detail.

Contact: Forest Footprint Disclosure
www.forestdisclosure.com

Kenyan project issues first REDD forest credits

The first greenhouse gas credits from a project that reduces deforestation were issued under the Voluntary Carbon Standard (VCS) programme in February, a signficant milestone for VCS and for reduced deforestation projects across the world. The credits were issued to the Kasigau corridor REDD project, developed by Wildlife Works in the Rukinga Sanctuary in Kenya which produced a new methodology to calculate the GHG emissions curbed by project activities which was approved for use under the VCS programme. The Kasigau project generated approximately 1.45 million credits, each representing one tonne of GHG emissions removed from the atmosphere, for its first six-year monitoring period. It is estimated to reduce over 6 million metric tonnes of emissions over its 30-year project life, through the conservation of large areas of forest.

Contact: Wildlife Works
www.wildlifeworks.com

UK Government make €1billion from auctioning rights to pollute

As of 10 February, the UK Government had made a total of €1 billion from auctioning off ‘pollution permits’ to heavy polluting industries in the UK according to Carbon Retirement. The UK is part of the EU wide trading scheme to reduce carbon emissions launched in in 1998. Each permit sold enables an industrial company to emit one tonne of carbon. The European Commission proposes that at least 50% of this revenue should be spent on green projects but none of it is currently earmarked for green investment. Carbon offset firm Carbon Retirement calls for the finances to be used to address fuel poverty, provide green funds for developing countries and help meet legally binding UK renewable energy and greenhouse gas emission targets.

Contact: Carbon Retirement
www.carbonretirement.com

Sainsbury’s ground-breaking green store

One of the most environmentally friendly supermarket stores in the UK opened on 16 February. The new Sainsbury’s store in Hythe has an innovative ‘Smart Grid’ system which monitors the grid and activates the store’s biofuel generator when there is an increased demand for electricity. As a result, reserve power stations will not have to be used as frequently. These power stations are kept on standby at all times ready to come into action when they are needed and two thirds of the UK’s stand by power is from non renewable sources, which emit large volumes of carbon. Sainsbury’s property director, Neil Sachdev explained that “by introducing this technology, we will cut the UK’s dependence on fossil fuels, reduce our own energy costs and reduce our CO2 emissions.”

Contact: J Sainsbury’s
www.jsainsburys.co.uk

Siemens and the Carbon Trust launch new green finance deal

The Carbon Trust and Siemens have launched a new low carbon finance scheme to fund business investment in green technologies, worth £550 million to UK green business. The major new deal is a UK first and is designed to encourage investment in cost effective, low energy technology. Siemens will provide the capital for the scheme while the Carbon Trust is to utilise its expertise to assess claims for their energy and cost effectiveness. All businesses can apply for finance from the fund from 1 April 2011 and the initiative is designed to reduce energy costs so that loans can be repaid at no net cost to the receiving business.

Contact: Carbon Trust
www.carbontrust.co.uk
Siemens
www.siemens.co.uk

COMMENTS