Low carbon pathway is "the smart choice for sustainable prosperity for all”: Ban Ki-moon

Author:
Ilario D'Amato
Reading time: 7 minutes
23 January 2015

LONDON: Today at the World Economic Forum in Davos, leading economists, policymakers and politicians pushed the world to follow the low carbon pathway in an inspiring debate.

With the participation of Paul Kagame, President of Rwanda and moderated by Christine Lagarde, Managing Director of the International Monetary Fund, the panel “Tackling Climate, Development and Growth” was introduced with remarks from UN Secretary-General Ban Ki-moon, who hailed 2015 as “the year for global action”.

Last year the UN New York Summit helped create new political momentum for climate action, along with The Climate Group’s Climate Week NYC. During the panel Secretary-General also praised the EU’s binding target of reducing greenhouse gases “at least” 40% by 2030 compared to 1990 levels, as well as the more recent China-US climate deal and progress achieved at the COP20 climate talks in Lima. Together these moments suggest this year will be a tipping point for curbing the impacts of climate change and driving low carbon growth.

Sustainable development and climate change are two sides of one coin,” Ban Ki-moon underlined. “The success of both agendas relies on substantial resources from the private and public sectors. The UN Financing for Development conference in July in Addis Ababa will provide an opportunity for a comprehensive framework, which must be a very robust and visionary mechanism.”

ECONOMIC GROWTH

Ban Ki-moon further advised: “Success will also depend on growth. Growth has freed millions of people from poverty and hunger, and supported health care, education, environmental protection. But growth is also associated with pollution and an increase in emissions. One key transformation for the post-2050 era will be to make growth more inclusive and green.”

Despite uncertain economic times, the Secretary-General pointed out that many opportunities exist for shaping the world of the future: “Over the next 15 years the world will make a massive investment in new infrastructures in cities, energy and agriculture. If this spending is directed towards low carbon goods, technologies and services, we will be on our way towards a more sustainable, equitable and climate resilient society.”

Ban Ki-moon warned that in building a stronger future, infrastructure and sustainability should not be treated separately, and if we don’t act to solve both issues at the same time “we will lock ourselves into bad, long-time investments that will make it virtually impossible to achieve the Sustainable Development Goals, and we will put ourselves – and our children – at grave risk for extremely costly climate disruptions.”

Jim Yong Kim, President of the World Bank agreed that dealing with climate change, growth and reduction of poverty together makes economic sense. “In the report Adding Up the Benefits we showed that with an aggressive move toward clean transport and getting greater energy efficiency, we can add from US$1.8 trillion to US$2.6 trillion to the GDP over the next decades. These are no-brainers, two straightforward moves that are good for everybody. If you gets the math right, it seems less like a contradiction”

The President of the World Bank also talked about how incentives shape the economy in the energy sector: “Some say we don’t have to worry about climate change because we can invent new technology in the future that will take carbon out from the air. We are not there yet, but it will never happen if we don’t get the incentives right”.

He said the solution is “a price on carbon, which will take account of the actual cost to society and humans of putting carbon in the air – and it will incentivize the kind of effort around technology that may very well, one day, take the carbon out of the air. I would love to see us have enough faith in human ingenuity that we set a price on carbon.”

GREEN BUSINESS

The crucial need for corporates to support low carbon growth and climate action was also central to Jim Yong Kim’s speech. He asserted: “We need a plan equal to the challenge, which means we need to include the private sector in a way we never had done before.”

Business was represented in the panel by Paul Polman, CEO of Unilever, who underlined how “we see that in many parts of the world, economic growth is being stifled by climate change."

Paul Polman continued: “The New Climate Economy report demonstrates that in order to get economic growth you need to attack climate change. Looking at land use, cities and energy, and looking at the investments the world is going to make over the next 15 years, doing it in the right way at the same time you can solve climate change and stimulate economic growth.”

It’s a unique opportunity that we have,” he remarked. “The price of oil is going down at this point in time, a unique opportunity to get rid of subsidies – that are still between US$600 million and US$1 trillion in terms of fuel subsidies in the carbon sector, while there is very little support for green energy. Use this opportunity to correct it.”

All businesses want cheap energy, Christine Lagarde of the International Monetary Fund observed. Paul Polman agreed, stating: “We need competitive energy, since ‘cheap’ is a relative word, and we need sustainability. Increasingly, we are seeing that green energy is actually the cheap energy. As a company, we use green energy in Europe and in the US, and I’m not paying more for it: I’m just thinking differently. And where it is not working, it’s because of the market mechanisms like the subsidies.”

There is enough support in the business community for a global zero net emissions target,” added Polman. “We can no longer be the silent majority.”

LOW CARBON CHOICE

First criticizing the impact of energy incentives, Michael Spence, Nobel in Economic Sciences was hopeful about the crossroads many business and government leaders now stand at: “Energy subsidies are a catastrophic policy. They produce distorted development of the economy. But I am very encouraged; this year has been a turnaround. We have a choice between an energy efficient, low carbon path and an energy-intensive, high carbon path – which at an unknown time ends catastrophically. This doesn’t seem a very hard choice.”

The UN Secretary-General Ban Ki-moon then addressed the audience of economic leaders with a fervent appeal: “I urge you to choose wisely and invest in the low carbon pathway. I urge finance ministers and leaders of the government to do the same. Your leadership is critical. The latest report of the IPCC has made it quite clear: climate change has happened because of human behavior. Therefore it is only natural that it should be us – the human being – to address this issue. And it may be not too late if we take decisive actions today.”

“Show the world that the low carbon pathway is not only the right thing to do, but the smart choice for sustainable prosperity for all,” he concluded. “We are the first generation that can end poverty, and the last generation that can take steps to avoid worst impacts of climate change. Future generation will judge us harshly, if we fail to do upholding our moral and historical responsibilities. I count on your strong commitment and leadership.”

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