President Poettering, Vice-Presidents, Members of the European Parliament, Members of my European Union Corporate Leaders Group on Climate Change, Ladies and Gentlemen.
I couldn’t be more honoured and delighted to have been invited to address you today, during the 50th anniversary year of the entry into force of the Treaty of Rome.
I am only ten years older than this treaty and have probably fared somewhat worse!
Few people, I imagine, would have been brave enough to predict the course of European history over those 50 years, or the way in which the European Union would increase in size and influence to become such a leading player on the world stage. Yet no-one at all, I am certain, would have predicted that changes in the Earth’s climate would become the leading concern of a great many of Europe’s politicians, and a high proportion of its citizens.
Climate change, as a self-inflicted wound, is something which was drawn to my attention over twenty years ago and has occupied it – amongst other things – ever since. Chiefly from the point of view of the wisdom of taking a precautionary approach. During that time every apparent advance, whether in terms of political will, public awareness or cross-sector commitment to tackling the issue, has been rapidly over-taken by the latest scientific consensus on the scale and urgency of the challenge we face.
Some people still argue, of course, about the precise consequences of climate change, others are still completely sceptical, but what seems to me to be important is that some of the effects we are witnessing now are happening twice as fast as scientists were predicting just five years ago. In the last few months we have learnt that the North Polar ice cap is melting so fast that some scientists are predicting that in seven years time it will completely disappear in Summer. Others think it will take a little longer. But the mere fact that such a development is conceivable at all is, you would have thought, yet another wake up call as we sleepwalk our way towards the edge of catastrophe.
I can only agree with President Barroso - who has shown such crucial personal leadership in this whole debate - when he said last November that climate change now poses a threat to global security. I recall giving the 1993 Global Security Lecture at Cambridge University and saying that many of those who wish not to act seem to take refuge in uncertainties, but that things could also turn out to be worse than the current scientific best guess. I remember in that lecture asking why, if military policy has long been based on the dictum that we should be prepared for the worst case, should it be so different when the security is that of the planet and our long term future? There can be no doubt that for those countries whose economic, political and environmental systems are already under stress, the extra burden of climate change might well be the determining factor between security and instability – and instability that will reach far beyond the boundaries of those states and affect each and every one of us. This is why it is so important that the European Parliament now has a committee on climate change. Ladies and gentlemen, determined and principled leadership has never been more needed. Surely, this is just the moment in history for which the European Union was created? Can that moment not be captured before it slips, lifeless, from our grasp?
For what it is worth, I would like to congratulate the Commission on its recently announced Climate Action and Renewable Energy Package. Targets have been set and a road map developed, although I suspect that keeping to both will require substantial adjustments to the way we all think about energy, industry, transport – including aviation and maritime – and agriculture. However, I believe we will have to go much further to equip ourselves with the tools we need to deal with the intractable issues that lie in the way of keeping the rise of global temperature to two degrees. Of course, even achieving that does not mean, unfortunately, that life will go on as normal – last year’s I.P.C.C. assessment stated that up to two billion people worldwide will face water shortages, and up to 30 per cent of plant and animal species would be put at risk of extinction, if the average rise in temperature stabilizes between 1.5 and 2.5 degrees. Ladies and gentlemen, millions of people throughout the world are deeply concerned about what is happening to our planet, but they feel utterly powerless. So they look to national governments, the European Union and international agencies to act on their behalf. But too often they see nothing but argument, disagreement and prevarication. For me, the crux of the problem is – and I only pray I will be proved wrong – that the doomsday clock of climate change is ticking ever faster towards midnight. We are simply not reacting quickly enough. We cannot be anything less than courageous and revolutionary in our approach to tackling climate change. If we are not, the result will be catastrophe for all of us, but with the poorest in our world hit hardest of all.
In this sense, it is surely comparable to war. The question is do we, as a world community, have the resolve to wage it? For instance, I wonder - if we are really honest with ourselves – whether we have the courage to weave climate change considerations into the fabric of every aspect of European development? Because that is what we must do. For what kind of “development” will there be if, and when, climate change causes the appalling chaos that is being constantly predicted? As the challenge becomes more urgent, so the questions seem to become more and more difficult.
Do we really understand the dynamics of a world in which energy and food security will become real issues for everyone? Can we, hand on heart, say that we are really doing enough to improve energy efficiency? Can we possibly allow twenty years of business as usual before coal power generation becomes clean? Are we truly investing enough in renewable energy technologies? What can we do about the deforestation of the world’s rainforests, which do so much to sustain our climate? How can we build a really effective dialogue with China and India, and indeed the United States, that recognizes the real security implications of climate change? And how do we maximize the role of the private sector in achieving a low carbon economy?
All these questions are of vital importance and the people who are grappling with them need all our support. But it seems to me that the private sector is of paramount importance, as it affects every one of the questions I have just posed. I have spent the last twenty-three years working with the corporate sector through Business in the Community, of which I am President, my Business and the Environment Programme and my International Business Leaders Forum, and I can tell you that there is a genuine determination amongst many companies to show real leadership on climate change.
But what many of them have told me is that while a market-based approach can influence behavioural change, up to a point, these mechanisms cannot be expected to deliver solutions by themselves. They tell me that a proper framework is required, with governments setting consistent long-term policies and providing responsible and equitable regulation.
The point is that the solutions do not lie with just the private sector or just the public sector. Climate change presents such a threat that, uniquely in history, it will surely require the effort of every nation and every person to find and implement a solution before it is too late? It is a task that calls for the biggest public, private and N.G.O. partnership ever seen. Many of the essential choices will be hard and require great political will. But it would all be so much easier, and we could make a difference much more quickly, if a genuine tripartite alliance could be created. And I would dare to suggest that there is, in fact, no other way - we just don’t have the time to opt for half measures or for a less than truly integrated approach, hoping that something, some new technology, will eventually turn up. As never before we are the Masters of our fate …
Interestingly, there are various things that seem to be happening at the moment that are giving at least some cause for optimism. The first is that a number of N.G.O.s, in the United Kingdom at least, are reporting that the public is more prepared to adapt their lifestyles to tackle climate change than perhaps the Government might think. And I know that many companies certainly are.
Three and a half years ago I formed my Corporate Leaders Group on Climate Change under the aegis of my Business and Environment Programme which I initiated fifteen years ago. The Group has been working closely ever since with the United Kingdom Government to develop its policy framework on climate change. More recently, a wider group of major European companies has been formed to support and encourage the development of policies and interventions that will move the European Union towards a low carbon economy, including strong support for the ambitious 20:20 targets announced at last year’s Spring Summit – and there must surely now be a real opportunity for further work with the European institutions and member states, building on the measures announced on 23rd January.
Just before the Bali Summit these two groups brought together over 170 global companies in calling for a legally binding framework in which emission reductions would be set according to science. They called for an average global reduction in carbon dioxide emissions of 50 per cent – that meant 80 per cent in the developed world – by 2050. What they were advocating went far beyond anything that was agreed at Bali. So my second cause for optimism is this - that some of the world’s best known and most powerful corporate leaders are now ahead – in some cases way ahead - of many political leaders in this debate. Perhaps this is because they understand that the real competition is not the race against other businesses in China, India or the United States to maximize economic return – rather, the race now is to restore harmony to the forces of Nature unleashed by climate change and so ensure our very ability to survive.
Ladies and gentlemen, this is a contest we simply cannot afford to lose. And one which where winning will bring us enormous opportunity.
If the partnership approach that I mentioned is to deliver what we need, it seems crucial that we find new ways of accessing the capital markets. Two key players in this are the pension funds and the insurance sector. I have been working with both to identify how they can make a real difference to tackling climate change. Their response has been enormously encouraging. The insurance sector has developed the ClimateWise Principles that will govern the way that signatory companies both invest and do business. And I can only hope that this might be replicated elsewhere. Certainly, the pensions sector is well on the way to developing an action plan that promises to be very constructive.
But the real prize would be to find ways in which the insurance, pensions and banking sectors could combine their efforts and work with the international financial institutions, such as the E.B.R.D., E.I.B. and World Bank through its Clean Energy Investment Framework, as well as national governments, to develop innovative approaches to grappling with both mitigation and adaptation issues. I think that we would all consider the discussions last month at Davos to be a welcome and important contribution to this process. Such a powerful, combined approach might also help us find solutions to a major, but currently neglected cause of climate change, and that is the appalling loss of the world's tropical forests. I believe this to be a matter of the gravest urgency, because burning forests are responsible for significant global greenhouse gas emissions. Estimates vary, but I wonder if it really makes much difference if it is 12, 18 or 25 per cent? What we do know is that these emissions are comparable to those generated by the production of electricity and heat. That is why it is essential that we find ways to start valuing the world’s forests for all the services they provide. You don’t need me to tell you that they function as giant global utilities, providing essential public services to humanity on a vast scale. They store carbon which, of course, is lost to the atmosphere when they burn. They help clean the atmosphere of pollutants and feed it with moisture. They act as a natural thermostat, helping to regulate our climate. And they sustain the lives of some of the poorest people on this Earth. And they do all these things on a scale that is all but impossible to imagine. Amazonia’s forests alone help to store the largest body of flowing freshwater on the planet. They release 20 billion tonnes of it into the atmosphere every day and scientists are only now starting to understand just how crucial tropical rainforests are in determining the patterns of precipitation around the planet. Yet every year 20 million hectares – an area the size of England, Wales and Scotland combined – are destroyed or degraded.
Unbelievable as it might seem, we are destroying our planet's air-conditioning system. But the loss of biodiversity is also terrifying. It has been compared to burning down a library of precious knowledge without first reading the books. At least there were other copies of some of the works in Alexandria before Caesar set the Library alight, and he had the excuse of not doing it on purpose. We, unfortunately, do know what we are doing, and there are no other copies of the Earth's rainforests!
The problem for too many of us is that deforestation is out of sight and out of mind. The simple fact is that if we do not pay the countries who are the custodians of this vital global utility for the essential services they provide the forests will continue to be cut down and global warming will continue to accelerate. So this problem isn’t someone else’s that will have to be addressed in the future. It is ours and it must be addressed now. We must start to pay for the services that these great forests provide to us. After all, everyone accepts the necessity of paying for water, gas or electricity. We have reached the stage where there is no alternative but to find an equitable means of paying for the planetary life support system on which we depend – and fast!
Of course, all sorts of measures to save tropical forests have been tried, many of them with some success by the countries represented here today, yet the destruction goes on. Over the last three decades millions of Euros have been spent largely in the form of public sector loans and technical assistance. But the private sector has not really been part of the solution. It is now absolutely crucial, I feel, that it becomes involved. After all, it has much of the money, the ingenuity and the skills. (When you think that a company like Citigroup produces profits – normally! – that are in excess of the G.D.P. of many countries, not least Kenya, you can see the massive clout they have!) That is why I believe a more coordinated approach might help, not only in the technical terms of public, private sector partnerships, but also in somehow ensuring that those who are establishing the policy frameworks and setting the incentives are working closely with the private sector to find the right balance.
Having been briefed by rainforest experts earlier last year, who told me that we only had some eighteen months left to find a solution to deforestation, I decided I must try and do what I could, building on twenty-three years of experience and effort in the area of corporate social responsibility. Therefore, I have put together a Rainforests Project with the support of twelve major companies. Between us we have gathered a really world class selection of experts, from all disciplines, to try and come up with some innovative answers. We have established a Steering Committee to guide us and I'm delighted that Mr Barroso has been kind enough to send a representative, Mr Kemppinen. He joins many others, including a senior representative from the World Bank.
What I am hoping we can do is to find a way to energize the capital markets to develop instruments, whether market-based or not, to transfer to those countries that actually want to do something about this problem, in the most effective way, the huge sums which are needed. Somehow, we need to build integrated programmes that tackle the drivers of deforestation, which seem to me to be more often than not agricultural rather than forestry, but also to combine the different types of financial sector capacity – the banks, the insurance sector and the pension funds. Above all – and in the simplest of terms – we have to find a way to make the forests worth more alive than dead.
Now, I realize only too well that these things are often more difficult than they seem, and care would have to be taken not to overwhelm the market, but surely it is not beyond the wit of man to find a way to reward appropriately the people who are protecting such an important part of the world's ecosystem? Like many other people, I have great hopes that the next version of the European Emissions Trading scheme, either from the money raised from auctioning allowances or through some other mechanism, might extend the helping and very visible hand of a market approach to assist in keeping the rainforests standing. I recognize that this will never be a solution on its own, but when combined with greater public sector support this could provide long-term sustainable incentives that favour standing forests. That is why I have been so interested by recent proposals on the use of money raised from the auctioning of allowances to support rainforests.
Ladies and gentlemen, you know better than I, the overwhelming and pressing problem is that as food security becomes more acute, so food prices rise and the pressures and opportunity costs of keeping the forests alive grow. A system of payments for the eco-services, supported by market mechanisms and clearer and more enforceable sustainability policies for palm oil and other agricultural commodities, are demonstrably essential. But to work they must derive from, and reflect the needs of, those whose livelihoods depend on these forests.
Mr President, ladies and gentlemen, I have gone on far too long. I fear it is merely a measure of the global emergency we face, but I just want to end by reiterating my conviction that the challenge of climate change is a challenge for everyone. It requires us to think and act across boundaries of nation, sector, language and culture, and to do so with speed and implacable determination. At the same time it provides unprecedented opportunities for human ingenuity and co-operation in developing new and sustainable industries and lifestyles…
Indeed, we will only succeed if we strive to work together and in doing so we may find to our surprise that we have removed much that causes conflict, instability and poverty. Whether or not we can achieve all that needs to be done in the time available to us is by no means certain. But what is certain is that it cannot be done without a strong lead from Europe and its citizens. So the role of each and every one of you in this chamber will be absolutely crucial. Can we therefore work with you as a matter of vital priority to create the kind of partnership I have described and thus to make corporate social responsibility truly global and truly effective? And once we have saved the rainforests, can we use this new public, private and N.G.O. partnership to tackle the other global climate challenges? Can we also, ladies and gentlemen, do one other thing, and that is to listen to our hearts once again – that neglected part of ourselves that at the end of the day is the true source of what we call sustainability? For the lives of billions of people depend on your response and none of us will be forgiven by our children and grandchildren if we falter and fail.