Ny-Ålesund Symposium, Svalbard – June 10, 2009 Elements of a good post-Kyoto agreement. What...

Ny-Ålesund Symposium, Svalbard – June 10, 2009

World Business Council for

Sustainable Development

Elements of a good post-Kyoto agreement. What could business deliver if these elements were adopted?

Björn Stigson, WBCSD PresidentNy-Ålesund Symposium 2009

June 10, 2009Svalbard


Society

Economy Environment

The World in Transition to Sustainability

2


The Future Society: A Growth Story

© 2

008

PO

PU

LA

TIO

N

RE

FE

RE

NC

E B

UR

EA

U

Source: United Nations Population Division, World Population Prospects: The 2006 Revision.

World Population (in Billions): 1950-2050

3


Development: The Poverty Challenge

4

Income poverty:Over 2 billion people live on less than $2/day

Energy poverty: 1.6 billion people today without access to electricity

Mobility poverty: 900 million people without access to transport

Water poverty: 1.8 million deaths per year due to lack of sanitation, poor hygiene and unsafe drinking water.

Sanitation poverty: 2.5 billion people without access to hygienic sanitation


The Future Society: Shifting Fortunes

% Share of GDPFrom The Economist print edition. “Wrestling for influence.” July 3rd 2008.

Emerging Economies more than half of Global GDP

5


The Future Society: Urban

6

47% urban

60% urban

3.2 3.32.9

5.0

1970 2000 2030

(Billions of inhabitants)

36% urban

1.3

2.4

urban

rural

70% urban

2.8

6.4

2050

Source: United Nations, World Urbanization Prospects: The 2007 Revision


Mindsets

Priorities

Equity

Share

d vis

ion

ValuesSociety

Economy Environment

7



Solutions

Markets

Regulations

Infrastructure

Tec

hnol

ogy

Institutions

Financing

Mindsets

Prioriti

esEquity

Share

d vis

ion ValuesSociety

Economy Environment


8

Efficiency


Geography

Local

RegionalNational

GlobalSolutions

Markets

Regulations

Infrastructure

Tec

hnol

ogy

Institutions

Financing

Mindsets

Prioriti

esEquity

Shared visio

nValues

Society

Economy Environment

Efficiency

Transition to a Low Carbon Economy


IEA’s World Energy Outlook 2008

Current energy trends are patently unsustainable – socially, environmentally, economically.

To avoid “abrupt and irreversible” climate change we need a major decarbonization of the world’s energy system.

10


Global emissions scenarios

11Source: IEA. ETP 2008


Reductions in energy-related CO2 emissions in the climate policy scenarios

12

Source: IEA. WEO 2008. Presentation by Dr. Fatih Birol


0%

1%

2%

3%

1973 - 1990 1990 - 2004

Ave

rag

e an

nu

al p

erce

nt c

han

ge

Actual energy use

Energyefficiency

improvements

Actual energy use

Energyefficiency

improvements

Hypothetical energy use without energy efficiency improvements

Source: Energy Use in the New Millennium (IEA, 2007)

Energy Efficiency


Low price of energy due electricity and fuel subsidies

Absence of performance standards or lack of regulatory incentives

Lack of environmental awareness Lack of information about:

– Potential savings

– Options

– Expected life cycle cost

Fragmented value chains and lack of cooperation between parties involved

Barriers to energy efficiency


Existing technology

Technology deployment– Key for energy efficiency and short/medium

term emission reductions

Technology transfer to developing countries– Lack of understanding of how technology

diffusion happens– Lack of capacity/capability to absorb technology– Intellectual Property Rights (IPRs) – an issue?


New technology

Technology development– Need for huge increase of R&D funding to achieve

technical breakthroughs for key technologies– CCS– Next generation of nuclear– Renewables

– This will require a new public-private partnership

Technology acceptance?– Nuclear– Big hydro– Biofuels


Key objective: Establish a price for carbon

Carbon market doubled from 2007 to 2008– Total value in 2008: 126 BUSD– Allowances and derivatives under EU ETS:

92 BUSD– Secondary market for CERs: 26 BUSD

Clean Development Mechanism (CDM)?– Re-design or complement with new,

dedicated, flexible market mechanisms?

17

Carbon markets


A global carbon market?

Cap & trade established in the EU and debated in US, Japan & Australia

How to link national carbon markets?

18

Carbon markets


Major opportunity for companies to provide systems solutions, products, and services for “smart” and resource efficient infrastructure:

Buildings Transport Energy Water Communications Waste

Infrastructure

19


Final energy use by sector in the Baseline, ACT Map and BLUE Map scenarios

20

Source: IEA. Energy Technology Perspectives 2008


First phase:Facts & Trends Report published 2007

Second phase:A plan for transformation of the building sector and a roadmap for reduced energy use in buildings. – Launched in April

Next stepAn EEB Manifesto to mobilize all WBCSD members for EEB actions

Energy Efficiency in Buildings (EEB) Project

21


“Energy Efficiency in Buildings: Transforming the market”

• Key conclusions:– Market forces alone will not achieve what is

required.

Too few incentives and too little awareness and desire to change.

– Current policies are insufficient

22


Project recommendations summary

A holistic approach

1. Strengthen codes and labeling

2. Incentivize energy efficient investments

3. Encourage integrated design approaches

4. Develop and use advanced technology to enable energy saving behavior

5. Develop work force capacity

6. Mobilize for an energy aware culture

23


What will it cost to realize the EEB objectives?

• Objective 2050:– 50% reduced energy use in buildings in the six “EEB

regions”

• Costs– 150 BUSD net investments/year to reduce energy use by

40% with payback time of less than 5 years– A further 150 BUSD net investments/year to reduce

energy use by an additional 12% with payback time of 5-10 years

24


Launched Power to Change: A business contribution to a low-carbon electricity future at COP 14 in Poznan

Outlines a roadmap of sector specific national and international policy recommendations to address climate change.

Electricity Utilities Project

25


CO2 reduction within the power generation sector by contributing factor based on ACT Map and BLUE Map scenarios

26

GtC

O2 r

edu

ctio

n to

20

50


Initiated in 2000, 18 leading cement companies

Represent some 60% of global cement manufacturing outside of China

However, 50% of global cement production is in China

Cement Sustainability Initiative

27


Model reviewed by IEA, LBNL and RITE

Comparison of scenario outputs: CO2 emissions projections • Emissions increase in all cases from 2005-2030

• Impacts occur late in the scenarios, if at all• Only ‘Global caps’ ‘Global goals’ & ‘a sectoral approach’ show impact on emissions

Cement demand forecast from International Cement Review and JP Morgan


20% of global carbon emissions come from cutting down forests.

Reducing and/or preventing deforestation is an important climate mitigation option.

Under CDM, developing countries can implement afforestation and reforestation project activities. – But avoided deforestations is not eligible for

carbon credit.

Sustainable Forest Products Industry

29


Finance I

85% of global investment flows come from the private sector

30


Finance II

31

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: IE

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nd

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wa

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ou

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oo

pe

rs.

Financing the electricity needs of the developing world through 2010


Finance III

Actions to increase financial flows to developing countries– Reform of the Clean Development

Mechanism– Establishment of new market

mechanisms – Increased ODA

32


GHG Protocol – a tool for implementation

33

Tool for measuring & reporting GHG emissions developed with WRI since 1998

MOU with ISO

Activities Capacity building programs in China (ongoing),

Brazil (August 2008) Multi-stakeholder process to develop new

supply chain accounting guidance and standards: business, government, academics and organizations


Advocacy: UNFCCC process

34

COP14 – Poznan (Dec 2008)– Business Day– Business Ministerial Breakfast– Side events

Yvo de Boer

"A new framework must make business sense if it is to succeed."

"What policies do you, as Business, want to see in a new global framework?”


Towards a Low Carbon Economy

35

WBCSD Low-carbon Economy report launched at Bonn UNFCCC Meeting in March 2009


Climate Change – A transformational challenge for society

A society that emits 50% less GHG emissions by 2050 will look very different

Major impacts on lifestyles, consumption patterns and infrastructures are likely

The transformation will not be easyThere will be winners and losers

36


A World in Transition to Sustainability

The world cannot succeed without Business as a committed solution provider to sustainable societies and ecosystems.

Business cannot succeed in societies that fail.

37


www.wbcsd.org

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