DAVOS, Switzerland –The heads of the United Nations, International Monetary Fund and World Bank shared a common message on Friday, suggesting that historians will look back at 2015 as a make-or-break year for climate action.
“This is a really, really important year,” said Jim Yong Kim, president of the World Bank, citing the need for everyone to “have enough faith in humanity, human ingenuity.”
Ban Ki-moon, secretary-general of the United Nations, called 2015 “the year of global action” on climate change.
Both men were part of a panel at the World Economic Forum annual meeting called “Tackling Climate, Development and Growth,” moderated by Christine Lagarde, managing director of the International Monetary.
Unilever chief executive Paul Polman, Rwandan President Paul Kagame, and A. Michael Spence, professor of economics and business at NYU Stern School of Business, also participated in the panel, which carried a level of optimism that was lacking at previous WEF gatherings.
Spence said research to date overwhelmingly shows that humanity has a “very small number of years” by which to tackle the climate monster, and that a series of events over the past year – including a U.S.-China climate deal and a breakthrough at the Lima climate summit – indicate that governments, business and the public are beginning to wake up to the challenge.
“There’s a tremendous sense of public-sector awareness, commitment, demonstration on the streets, a sense of momentum that hasn’t been there before,” said Spence, adding he was less hopeful last year. “If this year goes badly, and I don’t think it will, it would be a massive missed opportunity.”
Though he warned that the challenge is bigger than most people realize, pointing to the fact that we have to dramatically reduce emissions while there’s rapid growth in the developing world at the same time. “We don’t live in a low-growth world,” he added. “If we aren’t moving rapidly to a low-carbon economy growth pattern while we make this shift in terms of the size of economies, then we are at risk of what I call a catastrophic failure path.”
Throw in the added goal of reducing world poverty and the challenge is even more daunting.
The Rwandan president flipped that argument around, calling it an opportunity for developing countries. “It’s not a choice between environment and prosperity, we need to combine both,” said Kagame, explaining that developing countries have the luxury of a clean slate from which to build from.
“I look at it like mobile telephony and the Internet, where countries have leapfrogged technologies,” he said. “If we invest in these technologies and continue to invest, undeveloped areas (in Africa) can actually leapfrog problems that need to be addressed.”
So what will – should – be the path to the Paris climate summit in December?
Kim, Spence and Polman all agreed that now is the time to remove fossil-fuel subsidies while oil prices are low and consumers won’t feel the impact. Spence called existing subsidies “catastrophic policy,” while Kim pointed out that current oil and coal subsidies offer the world’s top earners six times the benefit than the bottom earners – an unacceptable situation.
Kim also said the timing and momentum is right to develop an “extremely robust” financial framework based on collaboration across all sectors that would fund the transition to a low-carbon economy and tackle poverty at the same time. “We’ve got to do everything we can to stimulate economic growth, but not just any economic growth.”
Ban said governments can’t be expected to do it alone. “One of the most valuable lessons I’ve learned as secretary-general is that we should have partnerships,” he said, pointing to the importance of working with big, transnational businesses and leveraging the “huge power” they bring to the table.
At the same time, Ban scolded the mainstream media for their disproportionate coverage of war and natural disasters, while ignoring the positive stories around sustainable development. “It seems the whole world is burning,” he said.
On the topic of burning, Polman said there is no doubt that 70 per cent of all coal and oil will have to be left in the ground, and there are enough people in the business community ready to move toward net-zero emissions by 2030. What they need, however, is more certainty from policymakers. “Government should not underestimate what an enormous signal you send to the business community if you set clear goals and targets.”
He added that a price on carbon is a must. “If you don’t price what you value, you don’t get people to react. That’s unfortunately our economic system.”
Polman urged more business leaders to get involved. “If you are involved, give it a little bit more this year, and if you give it a little bit more, involve others and drive to scale.” He also advised businesses just beginning to take action to hook up with existing initiatives rather than venture out alone.
