and co-authored by President Susilo Bambang Yudhoyono of Indonesia, Prime Minister Donald Tusk of Poland and Prime Minister Anders Fogh Rasmussen of Denmark
As world leaders gather in Washington, they would do well to remember that we face two crises. The global financial crisis is most immediate; the more existential is climate change. The urgency of the first is no excuse for neglecting the second. To the contrary, it is an opportunity to kill two birds with one stone.
Put aside the familiar arguments: that the science on climate change is clear, that every day we do not act the problem grows worse, that fighting global warming is a moral imperative. Instead, let us make the case purely in terms of pragmatic economics.
Global growth is slowing. Budgets are tightening. We will likely have fewer resources to tackle a lengthening agenda of global problems. What steps can we take, then, to create jobs and spur growth? How can we assure energy supplies at affordable prices? What must we do to insulate the global financial system from recurring shocks and cyclical bubbles, so that people of all nations can enjoy the promise of development and live in economic security?
The answer is to find common solutions to the grave challenges facing us. And when it comes to two of the most serious—the financial crisis and climate change—that answer is the green economy. If our way of life is threatened, our response must be to adapt. Scientists agree: to address climate change, we need an energy revolution, a wholesale change in how we power our societies. Economists agree as well: the hottest growth industry in the world just now is renewable energy. That’s where jobs of the future are already being created, and where much of the technological innovation is taking place that will usher in our next era of economic transformation.
Practical philosophers remind us that tomorrow begins today. Yes, this weekend’s financial summit in Washington is critical. But we face no less a test in early December, when nations gather in Poznan, Poland, for the next round of UN climate convention negotiations. The meeting marks the half-way point along the Bali road map, embraced amid great euphoria in Indonesia last year. It aims to set the stage for a grand bargain in Copenhagen next December, when world leaders come together to negotiate an ambitious and comprehensive climate change agreement that all nations can embrace.
At Poznan, environment and climate ministers will meet for the first time to chart out a long-term vision of cooperative action. To reach a deal in Copenhagen, we need a clear work-plan with specific goals for reducing emissions and adapting to the adverse effects of climate change. We need an agreed institutional architecture, a serious commitment an Adaptation Fund and, above all, a willingness of both developing and developed nations to do their part. Financing will be key. If developing nations lack the financial resources and technologies to “go green,” we cannot effectively fight climate change.
Wishes do not automatically translate into deeds. But let us be clear: that is what the world’s people want—businesses, investors, governments and citizens’ groups. In fact, it is already happening. The UN Environment Programme estimates that global investment in zero-greenhouse energy will reach $1.9 trillion by 2020—a significant portion of global GDP. Worldwide, nearly two million people are employed in the new wind and solar power industries, half of them in China alone. Brazil’s biofuels program has been creating nearly a million jobs annually. In Germany, investments in environmental technology is expected to quadruple over the coming years, reaching 16 percent of manufacturing output by 2030 and employing more workers than the automobile industry.
We do not need to await the arrival of new technologies, nor need we worry excessively about the costs of taking action. Studies show that the United States could cut carbon emissions significantly at low or near-zero cost, using existing know-how. For evidence, consider how Denmark has invested heavily in green growth. Since 1980, GDP increased 78 percent with only minimal increases in energy consumption. For businesses, such savings translate into profits. Poland has cut emissions by a third over the past 17 years, even as its economy boomed. Today, for example, European companies in the green tech sector enjoy substantial “first mover” advantages, accounting for one third of the world’s burgeoning market in environmental technologies.
With the right policies and financial incentives—within a global framework—we can steer economic growth in a low-carbon direction. With the right policies and the right incentives, we can be sure that developed and developing countries alike contribute to the cause of fighting global warming, each in their own way and without compromising every nation’s right to development and the economic well-being of its citizens.
The most forward-looking CEOs know this. That’s one reason why businesspeople in so many parts of the world are demanding clear and consistent policies on climate change—global policies for a global problem. In this regard, let us accept that there are many paths to Rome. In Poznan, and later in Copenhagen, some will seek strict emissions limits. Others will prefer voluntary targets. Still others will debate the pros and cons of “cap and trade” carbon markets versus taxes and national conservation regulation. Many will call for policies to reduce de-forestation, accounting for roughly a fifth of green-house gas emissions. Investment of $17 billion to $30 billion annually could halve that amount while boosting conservation-related employment in such tropical countries as Indonesia
Alas, we cannot pick and choose. We need all of these approaches. Even more, we will need leadership—enlightened and global perspective, matched by action. Today’s global financial crisis is a wake-up call. It demands fresh thinking. It requires innovative solutions that take into account the larger challenges we face as a global people. It is not an invitation to defer what needs to be done to safeguard our future. We have no more time to lose.