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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Elements of a good post-Kyoto agreement. What could business deliver if these elements were adopted? Björn Stigson, WBCSD President Ny-Ålesund Symposium 2009 June 10, 2009 Svalbard
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Society EconomyEnvironment The World in Transition to Sustainability 2
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 The Future Society: A Growth Story © 2008 POPULATION REFERENCE BUREAU Source: United Nations Population Division, World Population Prospects: The 2006 Revision. World Population (in Billions): 1950-2050 3
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Development: The Poverty Challenge 4 Income poverty: Over 2 billion people live on less than $2/day Energy poverty: 1.6 billion people today without access to electricity Mobility poverty: 900 million people without access to transport Water poverty: 1.8 million deaths per year due to lack of sanitation, poor hygiene and unsafe drinking water. Sanitation poverty: 2.5 billion people without access to hygienic sanitation
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 The Future Society: Shifting Fortunes % Share of GDP From The Economist print edition. “Wrestling for influence.” July 3rd 2008. Emerging Economies more than half of Global GDP 5
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 The Future Society: Urban 6 47% urban 60% urban 3.2 3.3 2.9 5.0 197020002030 (Billions of inhabitants) 36% urban 1.3 2.4 urban rural 70% urban 2.8 6.4 2050 Source: United Nations, World Urbanization Prospects: The 2007 Revision
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Mindsets Priorities Equity Shared vision Values Society EconomyEnvironment 7 The World in Transition to Sustainability
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Solutions Markets Regulations Infrastructure Technology Institutions Financing Mindsets Priorities Equity Shared vision Values Society EconomyEnvironment The World in Transition to Sustainability 8 Efficiency
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Geography Local Regional National Global Solutions Markets Regulations Infrastructure Technology Institutions Financing Mindsets Priorities Equity Shared vision Values Society Economy Environment Efficiency Transition to a Low Carbon Economy
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 IEA’s World Energy Outlook 2008 Current energy trends are patently unsustainable – socially, environmentally, economically. To avoid “abrupt and irreversible” climate change we need a major decarbonization of the world’s energy system. 10
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Global emissions scenarios 11 Source: IEA. ETP 2008
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Reductions in energy-related CO 2 emissions in the climate policy scenarios 12 Source: IEA. WEO 2008. Presentation by Dr. Fatih Birol
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Actual energy use Energy efficiency improvements Actual energy use Energy efficiency improvements Hypothetical energy use without energy efficiency improvements Source: Energy Use in the New Millennium (IEA, 2007) Energy Efficiency
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Low price of energy due electricity and fuel subsidies Absence of performance standards or lack of regulatory incentives Lack of environmental awareness Lack of information about: –Potential savings –Options –Expected life cycle cost Fragmented value chains and lack of cooperation between parties involved Barriers to energy efficiency
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Existing technology Technology deployment –Key for energy efficiency and short/medium term emission reductions Technology transfer to developing countries –Lack of understanding of how technology diffusion happens –Lack of capacity/capability to absorb technology –Intellectual Property Rights (IPRs) – an issue?
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 New technology Technology development –Need for huge increase of R&D funding to achieve technical breakthroughs for key technologies –CCS –Next generation of nuclear –Renewables –This will require a new public-private partnership Technology acceptance? –Nuclear –Big hydro –Biofuels
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Key objective: Establish a price for carbon Carbon market doubled from 2007 to 2008 –Total value in 2008: 126 BUSD –Allowances and derivatives under EU ETS: 92 BUSD –Secondary market for CERs: 26 BUSD Clean Development Mechanism (CDM)? –Re-design or complement with new, dedicated, flexible market mechanisms? 17 Carbon markets
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 A global carbon market? Cap & trade established in the EU and debated in US, Japan & Australia How to link national carbon markets? 18 Carbon markets
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Major opportunity for companies to provide systems solutions, products, and services for “smart” and resource efficient infrastructure: Buildings Transport Energy Water Communications Waste Infrastructure 19
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Final energy use by sector in the Baseline, ACT Map and BLUE Map scenarios 20 Source: IEA. Energy Technology Perspectives 2008
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 First phase: Facts & Trends Report published 2007 Second phase: A plan for transformation of the building sector and a roadmap for reduced energy use in buildings. –Launched in April Next step An EEB Manifesto to mobilize all WBCSD members for EEB actions Energy Efficiency in Buildings (EEB) Project 21
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 “Energy Efficiency in Buildings: Transforming the market” Key conclusions: –Market forces alone will not achieve what is required. Too few incentives and too little awareness and desire to change. –Current policies are insufficient 22
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Project recommendations summary A holistic approach 1.Strengthen codes and labeling 2.Incentivize energy efficient investments 3.Encourage integrated design approaches 4.Develop and use advanced technology to enable energy saving behavior 5.Develop work force capacity 6.Mobilize for an energy aware culture 23
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 What will it cost to realize the EEB objectives? Objective 2050: –50% reduced energy use in buildings in the six “EEB regions” Costs –150 BUSD net investments/year to reduce energy use by 40% with payback time of less than 5 years –A further 150 BUSD net investments/year to reduce energy use by an additional 12% with payback time of 5-10 years 24
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Launched Power to Change: A business contribution to a low-carbon electricity future at COP 14 in Poznan Outlines a roadmap of sector specific national and international policy recommendations to address climate change. Electricity Utilities Project 25
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 CO 2 reduction within the power generation sector by contributing factor based on ACT Map and BLUE Map scenarios 26 GtCO 2 reduction to 2050
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Initiated in 2000, 18 leading cement companies Represent some 60% of global cement manufacturing outside of China However, 50% of global cement production is in China Cement Sustainability Initiative 27
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Model reviewed by IEA, LBNL and RITE Comparison of scenario outputs: CO 2 emissions projections Emissions increase in all cases from 2005-2030 Impacts occur late in the scenarios, if at all Only ‘Global caps’ ‘Global goals’ & ‘a sectoral approach’ show impact on emissions Cement demand forecast from International Cement Review and JP Morgan
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 20% of global carbon emissions come from cutting down forests. Reducing and/or preventing deforestation is an important climate mitigation option. Under CDM, developing countries can implement afforestation and reforestation project activities. –But avoided deforestations is not eligible for carbon credit. Sustainable Forest Products Industry 29
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Finance I 85% of global investment flows come from the private sector 30
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Finance II 31 Figure source: World Bank (2007). An investment framework for clean energy and development. Original source: IEA and PricewaterhouseCoopers. Financing the electricity needs of the developing world through 2010
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Finance III Actions to increase financial flows to developing countries –Reform of the Clean Development Mechanism –Establishment of new market mechanisms –Increased ODA 32
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 GHG Protocol – a tool for implementation 33 Tool for measuring & reporting GHG emissions developed with WRI since 1998 MOU with ISO Activities Capacity building programs in China (ongoing), Brazil (August 2008) Multi-stakeholder process to develop new supply chain accounting guidance and standards: business, government, academics and organizations
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Advocacy: UNFCCC process 34 COP14 – Poznan (Dec 2008) –Business Day –Business Ministerial Breakfast –Side events Yvo de Boer "A new framework must make business sense if it is to succeed." "What policies do you, as Business, want to see in a new global framework?”
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Towards a Low Carbon Economy 35 WBCSD Low-carbon Economy report launched at Bonn UNFCCC Meeting in March 2009
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 Climate Change – A transformational challenge for society A society that emits 50% less GHG emissions by 2050 will look very different Major impacts on lifestyles, consumption patterns and infrastructures are likely The transformation will not be easy There will be winners and losers 36
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 A World in Transition to Sustainability The world cannot succeed without Business as a committed solution provider to sustainable societies and ecosystems. Business cannot succeed in societies that fail. 37
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Ny-Ålesund Symposium, Svalbard – June 10, 2009 www.wbcsd.org
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