Download Working for a low-carbon and energy efficient economy

Working for a low-carbon
and energy efficient economy
4
Global
Energy is the fuel for growth, an essential requirement
for economic and social development.
Björn Stigson
President of the World Business Council
for Sustainable Development
B
y 2050 the world’s demand for energy
could double as populations rise and
developing countries expand their
economies and increase the standard of living of
their people. Unchecked, an increased demand
for energy will create an increase in greenhouse
gas emissions. This is why action on climate
change is now a priority for governments
around the globe. Walk around any big city and
it is easy to see that cement is one of the things
that underpins modern life. In 1959, about
one-third of the world’s people lived in cities.
By mid-2008 more than 3.3 billion people – half
the world’s population – had packed up and
moved into town. Towering buildings, gleaming
glass and steel, traffic noise, neon signs, and
the hustle and bustle of a mass of humanity:
love them or loathe them, cities are a sign of
our times.
According to the latest UN Habitat report, three
million people have moved into cities every week
for the past 20 years in the developing world
alone. All these people have to live somewhere,
in something. Around the globe, more and
more dwellings, schools, hospitals, workplaces
and roads are built to accommodate this influx,
often using cement or cement products.
Concrete is second only to water in total volumes
consumed annually by society. Any increase
in demand for it has therefore significant
consequences for energy consumption and the
world’s greenhouse gas emissions. There are
consequences, too, for energy consumption
as buildings are responsible for up to 40% of
energy use in most countries, and that demand
for energy is soaring as construction continues,
especially in countries such as China and India
where building to meet population needs
proceeds, even in financially difficult times.
Energy as a key indicator for human
development
How we produce and use energy will be a
key part of how we deal with the world’s
changing climate. Energy is the fuel for growth,
an essential requirement for economic and
social development. Energy is essential to fuel
industry, power infrastructure and to connect
goods and services to markets. Communities
need it for basic services such as heating,
lighting and cooking fuel. There is no doubt
that some of the world’s people have too
little of it, and that others waste far too much
of it. Access to energy is a key indicator of
human development. One billion people living
in developed regions consume half of the
world’s energy supply. In contrast, 1.6 billion
of the world’s poorest people have no access
to electricity. It is not surprising that these
people should aspire to better lives, and we
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will need to be able to handle the increased
demand for energy.
At the World Economic Forum in Davos this
year, the UN Secretary-General, Ban Ki-moon,
told the assembled leaders of government
and global business that climate change
threatened all our goals for social development
and progress, but on the other hand, it also
presented us with a gilt-edged opportunity.
I would agree.
“By tackling climate change head-on we can
solve many of our current troubles, including
the threat of global recession,” Mr Ban said.
“We stand at a crossroads. It is important that
we realise we have a choice. We can choose
short-sighted unilateralism and business as
usual. Or we can grasp global cooperation
and partnership on a scale never seen before.
Today – he also explained - with the economic
downturn and climate change, the stakes for
companies have never been higher. But for
businesses with vision, the rewards are equally
high. The green economy is low-carbon and
energy efficient. It creates jobs. Investment in
sustainable technologies will turn today’s crisis
into tomorrow’s sustainable growth.”
China’s Premier Wen Jiabao also addressed the
Davos gathering. He said his government would
be increasing spending over the next two years
to help alleviate the effects of the financial
crisis. “The investment will mainly go to government-subsidised housing projects, projects
concerning the well-being of rural residents,
railway construction and other infrastructural
projects, environmental protection projects and
post-earthquake recovery and reconstruction.”
China already uses half the world’s cement and,
along with the United States, is the biggest
emitter of carbon dioxide and biggest user of
coal. Mr Wen’s remarks are an indication that
those consumption levels are likely to continue.
Low-carbon energy strategies
If we are serious about finding a solution to the
world’s climate problem, then we must significantly lessen the consequences of fossil fuel use
and find ways to deal with our greenhouse gas
emissions. To do this, we need to maximise our
energy efficiency, develop low-carbon energy
sources and deploy breakthrough technologies
such as carbon capture and storage.
At the World Business Council for Sustainable
Development we work with some 200 of
the world’s leading companies on finding
economically responsible, equitable ways to
sustainable development. These companies –
and many others around the world – are facing
challenging financial times. Nevertheless, they
fully understand that any climate solution will
require major investments from them.
“
One billion people
living in developed
regions consume
half of the world’s
energy supply.
In contrast, 1.6
billion of the
world’s poorest
people have no
access to electricity.
These people aspire
to better lives and
we need to be
able to handle an
increased demand
for energy.
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Investment
in sustainable
technologies will
turn today’s crisis
into tomorrow’s
growth.
The lion’s share of the investments in developing
and deploying low-carbon technologies will fall
to business. The United Nations Framework
Convention on Climate Change (UNFCCC)
has suggested that most of the financial flows
to support the investment to address climate
change will come from the private sector. In the
energy sector alone, the International Energy
Agency (IEA) has estimated that additional
investments of US $ 45 trillion will need to be
invested in the global electricity system up to
2050 to halve global greenhouse gas emissions
and make it low-carbon.
A new climate agreement is needed
But what business lacks at the moment is clarity.
It has the expertise, strategic thinking, innovative
mindset and some of the investment capital
that will be needed, but what it doesn’t have
yet is the international framework into which
it can invest with confidence post-2012. This is
why it is important that a new global climate
agreement, one that provides a framework for
how countries deal with their carbon emissions,
is reached in Copenhagen in December. WBCSD
member companies will be at the forefront of
the technological research, development and
deployment that will be needed if the world
is to shift to low-carbon energy sources. These
companies tell us that more needs to be done
to encourage investment on the kind of scale
that will be necessary.
Energy efficiency is widely accepted as the most
cost-effective way to mitigate climate change.
The IEA says energy efficiency accounts for
half of the potential to halve carbon dioxide
emissions in the decades ahead.
Energy efficiency reduces energy costs, alleviates
energy dependency, decreases vulnerability
to energy prices and reduces greenhouse gas
emissions. There should be a major global effort
to expand the role of energy efficiency to make
sure that we get as much out of its potential
as we can.
How to support new technologies
Many of the technologies needed to address
climate change are available. But what we
lack is the funding necessary for big demonstration projects that precede the widespread
deployment of that technology. Here policymakers and governments can help. We need
to establish public-private partnerships so that
governments, R&D institutions, business and
end-users of technology can work together to
organise, fund, define, develop and demonstrate
technologies as expeditiously as possible. And
existing financial mechanisms will need to be
maintained, streamlined or expanded so that
we move towards a truly global carbon market.
One additional mechanism that business
believes should be encouraged is sectoral
agreements. These would be satellites to the
global agreement and should focus on activities
that cut emissions and support technology and
financing within specific sectors. The focus
should be on either efficiency improvements or
emission reduction, or indirectly through such
actions as investing in specialised low-carbon
technology for future use. These kinds of
projects could help developing countries by
introducing new infrastructure and technologies, and at the same time building the skills
and competences needed to get full benefit
from them.
The Cement Sustainability Initiative
The WBCSD has valuable experience of sectoral
approaches. The Cement Sustainability Initiative
(CSI) is a voluntary programme of the world’s
leading cement companies, which, since its
beginning in 1999, has focused on the industry’s
major sustainability challenges. This is exactly the
kind of large-scale project that we see as having
a place within a new global climate agreement.
In 2002, CEOs from some of the world’s largest
cement producers pledged to take action in
areas such as climate protection, employee
health and safety, the use of alternative fuels
and raw materials, managing land use impacts
and managing other (non-carbon) emissions.
Since then, there have been consistent reductions in emissions intensity, that is, in reducing
carbon dioxide emissions per tonne of cement
produced. Between 1990 and 2006, all CSI
members reduced their emissions intensity by
an average of 12%.
The encouraging progress made by members
in measuring, reporting and mitigating carbon
dioxide and other emissions is only possible
because of four key building blocks developed
by the CSI. These are: a common measuring
and reporting protocol, external assurance of
emission reports, a global database of plantspecific energy and emissions performance and
company-set emissions reduction targets.
Data has now been collected and analysed from
1990, 2000, 2005 and 2006. In that time it is
clear that cement production and accompanying carbon dioxide emissions have increased,
particularly as developing countries have built
much-needed infrastructure, including housing,
roads, hospitals and schools for their growing
economies and populations. We know that
80% of future carbon dioxide emissions from
the cement sector will come from developing
economies. But what is equally clear is that
carbon dioxide emissions have not been
increasing anywhere near as much as cement
production, and this is because of the improvements that have been made in the emissions
intensity of the cement making process. In
2006 there were only 661kg of carbon dioxide
produced with each tonne of cementitious
product, compared to 752kg in 1990.
Different policy options for the world
It is clear that the world will need a variety
of policy options to make the big changes
demanded by climate change. The CSI is both
a project designed to look at broad sustainable
development requirements for the sector and
a project which looks specifically at sector
needs in relation to climate change solution.
This could help pave the way toward a broader
global framework for climate protection by
providing transparent emissions data, tools for
implementation and consistency of mitigation
opportunities. It is important that any sectoral
approach is set within the UNFCCC framework
and that it is compatible with existing and future
mechanisms. Verified emissions data should
be used to track compliance, there should be
provision to adjust or review objectives over
time, and developing and developed countries
must be involved.
The eco-efficiencies achieved by the CSI
have done much to show that sector-based
approaches could prove a valuable weapon in
our fight against climate change. We will need
all the weapons we have. Business understands
that we are all in this together and wants to
get on with working, planning and investing
for the future. The world can move to a lowcarbon economy, but it will require a great
deal of working together in Copenhagen and
elsewhere. Business is ready to be part of the
solution. ■
7
Today, with
the economic
downturn and
climate change,
the stakes for
companies have
never been higher.
But for businesses
with vision,
the rewards
are equally
high. The green
economy is
low-carbon
and energy
efficient.
Moreover it
creates jobs.
About the WBCSD
T
he World Business Council for Sustainable Development
(WBCSD) is a unique, CEO-led, global association of some
200 companies dealing exclusively with business and sustainable
development. The Council provides a platform for companies to
explore sustainable development, share knowledge, experiences
and best practices, and to advocate business positions on
these issues in a variety of forums, working with governments
and non-governmental and intergovernmental organisations.
www.wbcsd.org