The Climate Group: a network of reducers

[Originally posted on the Fletcher INTERNet]

Now in the middle of four weeks with The Climate Group. Lots of Fletcher presence here – I’m working with Shelagh Whitley F’03, whose idea it was to have Fletcher interns, Shotaro Sasaki, who is now in the Philippines with UNDP/GEF, interned here for six weeks right before me, and Prof. Bill Moomaw is on their advisory board.

Started just last December and based near London, The Climate Group‘s mission is to build an international leadership coalition of companies and governments committed to reducing their greenhouse gas (GHG) emissions. “By pooling the knowledge of leading reducers of CO2 emissions, and creating an arena for a formal exchange for ideas and practical experience, The Climate Group hopes to become ‘a catalyst for accelerating progress,’ say its organizers.” [GreenBiz.com]

The experience is accumulating. Over the past ten years and more, companies and national and local governments worldwide have initiated successful voluntary initiatives to reduce greenhouse gas emissions, without waiting for Kyoto or other regulatory frameworks to come into effect. For example:

  • Between 1998 and 2001, BP reduced its GHG emissions by almost 20% and saved $650 million in the process, by integrating emissions caps into its managers’ performance targets and implementing an internal carbon trading system that focused on making the lowest cost reductions first.
  • Over the past decade, Germany has been responsible for some 75% of the EU’s emissions reductions, through an early and ambitious program of eco-taxes and renewable energy investments. This may pay off for German companies now – as The Climate Group notes in its Germany case study, the “introduction of the European Emissions Trading Scheme from January 2005 could turn Germany’s pioneering achievements on climate into valuable assets on German company books.”

I’m working on two main things – first, writing a couple of case studies on corporate GHG reduction initiatives, and second, researching climate change and the financial services industry with a view to preparing a strategic overview of what’s currently happening and where the gaps are in the sector.

It makes sense that the financial services so far most active in assessing climate-related risks and opportunities are those that by their nature must think long-term: the insurers and re-insurers (notably Swiss Re and Munich Re) and the pension funds and institutional investors. Across the sector, one of the greatest barriers seems to be the lack of quantitative tools for incorporating environmental considerations into financial decision-making, according to the United Nations Environment Programme Finance Initiative (UNEPFI).

Met last Friday with a “sustainability accountant,” who works on monetizing environmental, social and economic costs and benefits, at sustainable development think-tank Forum for the Future. He told me about a thought-provoking analogy he had heard from David Ballard of http://www.changingclimate.org – between carbon-intensive fuels and slavery.

It’s a shocking parallel, but the thought-provoking gist was as follows:

Slavery was:

  • “a cheap source of energy”,
  • assumed to be crucial for continued economic growth and prosperity, but
  • a practice causing immense suffering to a group of people who were not being considered as people.

Just as fossil fuels are:

  • a cheap source of energy
  • assumed to be crucial for continued economic growth and prosperity, but
  • a practice that will shortly cause immense suffering to a group of people who are not being considered as people – that is, people in the future. Or if you don’t want to be quite so nebulous, substitute citizens of developing countries, who are going to suffer disproportionately from climate change, due to their tropical locations, lack of preparedness, and heavy economic dependence on agriculture.

So to address the problem, there will need to be a psychological shift whereby the profligate use of carbon is seen as immoral, just as slavery is now seen as immoral. The point is that climate change is a political-social issue and needs to be addressed as such, rather than as a technocratic issue to be “battled” with endless scientific and economic studies and policy papers.

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