The conversation on climate change has changed dramatically in the recent months as more and more evidence mounts that it is a present rather than future threat. The governments of the world converged at COP21 last December and reached an agreement to move towards a more sustainable mode of behavior in everything that we do. The negotiations then and there made politicians realize that fighting climate change is smart economic policy. They sent an important signal to businesses that hadn’t yet priced in the consequences of avoiding climate change, that no matter what industry they’re in, it will effect them.
The Bloomberg Future of Energy Summit held last week in New York City was different to any other year. It’s theme was ‘The Age Of Plenty’, alluding to the fact that we are in an era of abundant supply resulting in intense competition.
As the human and economic cost of fossil fuels become more apparent, the price of coal and oil are plummeting. And as technologies develop and more investment is funnelled into clean energies, renewables companies race for market share. Michael Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies opened the conference of executives from both sides of the energy industry with a startling fact.
“Climate risks effects every industry and virtually the entire US equity market”. This statement, in front of a historically capitalist industry, brings climate change from an outlier position of ‘what we should do’ to an interested party’s position of ‘what we must do’ in order to survive. He alluded to education as a key agent of change. “The more businesses know, the better they’ll be able to mitigate against and the more we learn from each other, the faster progress will be”.
More than 5000 peer reviewed studies on climate change have been conducted in the last thirty years and each year has been warmer than the last. That’s thirty years of evidence that unless we change our behavior, we will inflict irreversible harm to infrastructure, health and life as we know it.
John Kerry, US Secretary of State and a vocal advocate on climate issues took his place on stage and cited a recent study that found if sea levels keep rising at the current rate, Manhattan could be under water by the year 2100. This may seem scary but irrelevant to you or I, as it will not be in our life time but these steady changes have massive short term implications that are already being felt across the world – food shortages, stronger storms, disease outbreaks and collapsing ecosystems.
These are the risks of inaction, but we must also focus on what has been done. Kerry highlighted that “There are already huge changes in the energy industry, $33 billion has been invested in renewables to date”. The realization that a transition to clean energy is good business sense has resulted in economies of scale for businesses, not to mention the thousands of jobs that have been and will continue to be created in this entirely new industry.
Another source of hope from Kerry’s perspective was that “Last year, for the first time, more of the world’s money was spent fostering renewable energy technologies than fossil fuel plants”, demonstrating a clear acceleration of the movement. There has also been a surge in renewables investment in emerging markets, otherwise known as “global growth markets”. This is significant, as the actions of emerging powerhouses like China make an impact across the world.
It is clear that the the future of energy will be the largest undertaking of public private partnership the world has ever seen. It’s the role of governments to facilitate the transition. They can provide the cap ex and put the incentives and frameworks in place to simplify the move towards clean energy but the stakeholders of industry themselves also have a responsibility. They must innovate, appropriately allocate their resources and commit to being part of this crucial change.
As the world warms with each year, the question remains will we get there fast enough. Secretary of State John Kerry closed the conference with John Eddison’s three essentials to achieving: Hard work, stick with it and common sense. Add Horyou’s values of positivity and solidarity and, collectively, we can move towards a cleaner, greener society.
Written by Dearbhla Gavin