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CLIMATE ROUNDTABLE - CHASING NEW IDEAS
and figure out ways to integrate the climate agenda into
their near-term priorities.
However there is no simple, single path to integrate near-term
priorities with medium-term economic transformation. As such,
the New Climate Economy will also investigate the costs, trade-
offs, uncertainties and challenges of change. For example,
continued use of unabated coal may appear to many countries
as the cheapest option to increase energy supplies, even though
decision-makers know that it is a major source of CO
2
emissions.
However, coal use may turn out to be surprisingly costly when
countries take proper account of the local air pollution effects.
Coal-fired power is also a technology which is relatively mature
and generates major lock-in effects, limiting the ability for
countries to build smarter, more flexible and distributed energy
systems. Properly assessed, the “total cost of coal ownership”
may be much higher than decision-makers appreciate. Given
the 50 year + life of coal plants, it also limits the degrees of
policy freedom to respond to likely changes in economic and
environmental conditions over the coming decades.
The New Climate Economy is particularly keen to learn from
success and highlight and share stories of progress. Leaders
will make courageous choices and drive change, but only when
they can see realistic alternatives to the current model. For
example, China, seeking to maintain economic growth while
reducing an unhealthy reliance on coal, has placed the industrial
development of clean technologies at the top of its agenda.
The C40 group of Cities is promoting best-practices to reduce
greenhouse gas emissions and create resilient infrastructure.
Companies like Unilever, IKEA and Wal-mart show how it is
possible to drive up resource efficiency – and drive down
costs – throughout their supply chains. Driven at global scale,
it is quite possible that a resource- and carbon-efficient
economy will be a lower cost, lower risk economy than our
current 20th century model.
Recent experience in the financial sector has taught us about
the need to manage the accumulation of systemic risk. Yet we
are also not acting to deal with current systemic risks posed
by climate change. These climate-related risks have the potential
to make the global financial crisis look like a walk in the park.
The task of the New Climate Economy project is to shape a
practical climate agenda for leaders in both public and private
sectors – creating the kind of economic prosperity that can be
passed from one generation to the next. This requires policy
settings, investment decisions and international mechanisms
which increase, not limit, our degrees of freedom to handle
rapid, unpredictable change. Business as usual is not a
realistic option.
Faster, better growth today could create
the wealth and shared prosperity needed
to deal with climate risk.
Jeremy Oppenheim
