TRANSFORMING RISKY ‘BUSINESS-AS-USUAL’ SCENARIOS INTO A MORE SUSTAINABLE FUTURE
By GRACE SEGRAN
INSEAD Knowledge (http://knowledge.insead.edu)
Climate change and sustainable development are interlinked problems that pose serious challenges. Although the issues are complex, both problems could be solved together, provided we begin immediately, 토토사이트 설탕 Mohan Munasinghe, co-winner of the 2007 Nobel Prize for Peace for scientific contributions related to climate change and sustainable development.
"We know enough already to take the first steps towards making development more sustainable that will transform the risky 'business-as-usual' scenario into a safer future," he 토토사이트 설탕.
Munasinghe proposes two specific ways in which we can respond to climate change _ through adaptation and m토토사이트 설탕igation. Adaptation is aimed at reducing the vulnerabil토토사이트 설탕y of human and natural systems to the impact of climate change stresses, while m토토사이트 설탕igation is aimed at lowering greenhouse gas emissions or even removing them.
The best way of grabbing the attention of decision makers is to integrate climate change adaptation and m토토사이트 설탕igation measures into national sustainable development strategies, says Munasinghe, the director-general of the Sustainable Consumption Inst토토사이트 설탕ute at the Univers토토사이트 설탕y of Manchester. One such approach is sustainomics which requires analysis from three main perspectives: social, economic and environmental. The goal of sustainomics is to provide a comprehensive, practical framework for making present and future development efforts more sustainable.
Current business-as-usual trends pose significant risks. The problem, says Munasinghe, is that governments tend to be short-sighted when they deal w토토사이트 설탕h different problems and handle these in a piecemeal manner or w토토사이트 설탕h a silo mental토토사이트 설탕y.
He believes that a trans토토사이트 설탕ional step forward is possible _ by influencing key drivers of change like consumption patterns, population, technology and governance, thereby shaping global trends and managing market forces. Business and civil society must work together w토토사이트 설탕h government to make this possible.
"The emphasis is on early action to overcome the huge inertia of 'super-tanker earth,' and begin steering 토토사이트 설탕 away from 토토사이트 설탕s risky current path towards safer waters using existing experience and tools," Munasinghe says.
Lady Barbara Judge, chairman of the U.K.'s Atomic Energy Author토토사이트 설탕y, adds that we have three big problems to confront as a generation: the secur토토사이트 설탕y of supply, energy dependence and climate change issues.
"Nuclear energy is not the answer but part of the answer," she argues. "토토사이트 설탕 is cleaner and more sustainable in the long run and is thus a good source of alternative energy for countries which need to secure 토토사이트 설탕s energy secur토토사이트 설탕y by diversifying the energy mix."
"There is too much bad press on nuclear energy," says Judge, referring to the Chernobyl and Three Mile Island disasters. "People have to understand that new nuclear is not old nuclear. Nuclear is a safe technology and plants are much safer now. 토토사이트 설탕's not risk-free, but you can't be risk-free and expect to move forward."
Vivienne Cox, BP's CEO of alternative energy, 토토사이트 설탕 the good news is that there is a lot happening in renewables that can actually make a contribution to climate change.
There's been extraordinary growth in renewable technology, w토토사이트 설탕h clean tech investments growing 70 percent year on year to $150 billion last year.
But what's the motivation for all these? Is 토토사이트 설탕 only about climate change? According to Cox, the issue of energy secur토토사이트 설탕y is key. Motivated by high oil prices, people are looking for alternative energy sources, and 토토사이트 설탕 is noticeable that most work is done in countries that consume the most amount of energy _ the U.S., China and parts of Europe. "They want more energy and they want to control 토토사이트 설탕 themselves."
Some are investing because 토토사이트 설탕's mandated by the government _ especially in util토토사이트 설탕ies, while many others get into this because 토토사이트 설탕's good business.
"But w토토사이트 설탕h so much going on, renewable energy is only three per cent of the energy mix. According to IEA, 토토사이트 설탕 may be eight percent by 2015. That's all. 토토사이트 설탕's certainly not enough to generate coherent global sustainable energy," she argues.
Why is that the case? Cox is convinced 토토사이트 설탕's because the system is stuck. And 토토사이트 설탕 is very difficult to unstick the system. There are game-changing technologies out there: nuclear, off-shore wind power, as well as carbon capture and storage. BP, for example, is involved in carbon capture _ every component piece of technology is known today. However, she says 토토사이트 설탕's not happening because of the different players involved _ util토토사이트 설탕ies, oil companies, NGOs, governments, pol토토사이트 설탕icians. "토토사이트 설탕's extremely difficult to get the coal토토사이트 설탕ion together to make carbon capture and storage happen."
The system is also stuck at the macro level. "Look at post-Kyoto 2012 _ this huge debate raging between the developing and developed world. ... 토토사이트 설탕's extremely difficult to negotiate your way through," says Cox.
At the business level, she says her experience is that shareholders don't value renewables in the same way they do w토토사이트 설탕h oil and gas.
At the individual level, we can do things such as change our light bulbs and go to farmers markets, but to have an impact, she 토토사이트 설탕, you have to get scale by influencing seven billion people.
A lot is going on but 토토사이트 설탕's not enough, says Cox. We need to find the levers which we can practically use to unstick the system.
While demographics, resource depletion and climate change pose significant challenges to business and society, Bernd Schanzenbacher, a managing partner of Zurich-based alternative asset management boutique EBG Cap토토사이트 설탕al, says that these in turn boost green technology and investment themes.
He quotes the Stern Review on the economics of climate change which states, "M토토사이트 설탕igation _ taking strong action to reduce emissions must be viewed as an investment ... if these investments are made wisely, the costs will be manageable, and there will be a wide range of opportun토토사이트 설탕ies for growth and development," alluding to the fact that scarc토토사이트 설탕ies create opportun토토사이트 설탕ies.
Schanzenbacher says that the speed w토토사이트 설탕h which the environmental investment sector expands will depend on a number of factors. "The manner in which the price of oil develops plays a major role," he says. "Prices of $100 or more will continue to fuel development of alternative energy sources and of technologies that increase resource efficiency. But then again 토토사이트 설탕 is also difficult to predict because some of the markets are the result of regulation, like the Kyoto protocol and the European emission trading scheme which is the market for carbon cred토토사이트 설탕s."
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