Ed Davey – 2014 Speech to Climate Group

Below is the text of the speech made by Ed Davey, the Secretary of State for Energy and Climate Change, at King’s Place in London on 28th April 2014.

Introduction

It’s great to be here with you today to help mark the Climate Group’s 10th anniversary.

Over the last ten years you have demonstrated a unique ability to bring together businesses and government officials;

At all levels and from all corners of the globe;

To help unleash the economic opportunities presented by the low-carbon revolution.

And there can be no doubt about the need for bold action to tackle climate change.

The latest reports from the International Panel on Climate Change makes the situation crystal clear.

The science is unequivocal.

Without radical reductions in greenhouse gas emissions, the world is set to be potentially 4 degrees hotter than today.

And the latest reports are also clear on the consequences of that scenario.

Not just the physical consequences – lack of arable land, shortages of water, extreme weather.

But the social and economic consequences too.

Of course there are always uncertainties when it comes to economic prediction but the long-term economic impacts of climate change are likely to make the problems we have encountered over the last few years look mild in comparison.

So the debate cannot be about if carbon emissions are reduced, it has to be about how.

Because that is what all logic dictates – scientific logic and commercial logic.

The voice of business on climate change

Because this debate cannot be confined to the realm of science.

Or even the realm of politics – government regulation and international negotiations.

It must take place in the business community too.

Because you are the engine of our global society.

Without the active support of business, we cannot bring about the low-carbon revolution that we need to manage and limit the consequences of climate change.

Only by working together can we provide confidence and credibility for the market mechanisms required to reduce emissions.

Carbon-pricing, carbon-trading, encouraging low-carbon innovation.

And only by working together can we harness the social and economic benefits of going green.

Jobs for our citizens.

Profits for our businesses.

Revenues for Governments.

Growth for our economies.

Development for our societies.

The voice of business in this debate is critical.

We have a year or so leading to the end of 2015 to get the international politics aligned to make Paris a success.

Politicians will have to make balanced choices.

To meet their responsibility to look after the interests of those they directly represent, while trying to work for the greater good.

Political results are rarely clean and neat.

But it is much easier to come to a reasonable and workable position if those who create wealth, provide jobs and drive innovation are demanding bold action.

Business and climate risk

I know how difficult it is for businesses to make long term commercial decisions when there is so much uncertainty about how the international climate change policy framework will play out.

And there will always be those with a vested interest in the status quo who argue against change.

As the IPCC report itself points out, “Given loss aversion, the potential negative consequences of moving away from the current state of affairs are weighted much more heavily than the potential gains, often leading the decision maker not to take action.”

But we have to overcome this status quo bias.

Because for a business to gamble that climate change won’t happen just doesn’t make commercial sense.

No boardroom worth its salt can avoid making the long-term risk assessments climate change threats require, faced with the scientific evidence.

And that shouldn’t be some worthy annual report from the sustainability team, however helpful that might be.

Climate change needs to be mainstreamed into core business risk management processes.

How will climate change affect my business and my customers?

How do we mitigate the negative consequences?

And what options will provide my business with the greatest net benefit from a low-carbon economy?

Because as the Climate Group has consistently demonstrated, there is a huge business opportunity ready for those who grasp the green mantle.

Green growth

It isn’t just the higher productivity that can be gained by going green.

Things like lowering energy use or embracing new sustainable techniques.

There is a booming low-carbon market to take advantage of.

The global low carbon and environmental business market is worth around €4 trillion a year.

And it is expected to grow at over 4% a year for the foreseeable future.

Europe as a whole has carved out a 22% leading share of this global market.

Worth over €900 billion a year.

Supported by the far-sighted regulatory framework put in place by the EU and its member states.

We in the UK are a leading player in supporting low-carbon business.

Our ground breaking 2008 Climate Change Act, the product of a wide and welcome political consensus, commits to achieve at least an 80% cut in carbon emissions by 2050.

With 5 year carbon budgets to help us stay on track.

And through the 2013 Energy Act, we are putting in place one of the first low-carbon electricity markets in the world.

With a long-term political and financial framework to provide predictability and confidence for business investment.

Just last week, I announced the first eight contracts issued under the new regime.

Which will provide £12 billion of private sector investment in new renewable energy projects.

Too often, we are told that those who go low-carbon first will sacrifice their competitiveness.

But Europe and the UK are far from alone in embracing the opportunity green growth has to offer.

Global clean energy investments have grown sixfold since 2004 to nearly €195bn a year.

As you will hear from the Chinese ambassador later today, China is investing over a trillion dollars in its green economy over the coming years.

When I was in China at the end of last year, at almost every meeting I went to, the concept of a new ecological civilization was being discussed.

The enthusiasm with which this is being embraced in China gives me great hope.

And after years of appearing to stand apart, the United States, under the Obama Administration, is once again helping to drive this process.

The US recently became the world’s largest investor in low carbon energy research & development.

For the planet, this is encouraging, suggesting that the world’s two largest polluters have a growing stake in a low carbon-future.

So I have growing confidence that the international community can come together to set the global framework businesses and investors need.

This isn’t just about the big players, or national governments.

As today’s event will show, action is being taken to change the facts on the ground from the bottom to the top.

Local neighbourhoods coming together.

Cities going green.

All parts of civil society working to make the low-carbon transition possible.

Conclusion

But as I said at the beginning.

Without the engine of the business community, the low-carbon revolution cannot be achieved.

So I whole-heartedly support the Climate Group’s ‘We Mean Business’ campaign.

Powerful voices speaking up for climate action.

Backing new business models.

Supporting innovation.

Embracing low-carbon solutions.

And taking them to a booming market place.

None of this is going to be easy.

The year ahead to Paris in 2015 will be challenging.

And achieving an ambitious and workable international agreement is going to take courage from all who lead.

And we will have to sustain this low-carbon transition over decades if it is to have a lasting effect.

But we can and must hold the course.

The UK Government, negotiating as part of the EU, will be a strong voice for ambitious action.

At Ban Ki Moon’s summit in September we have an early opportunity to show we mean business.

Lets take it.