A viewpoint on the outcome and implications of the Durban Climate Change Conference 2011
By Jochen Hauff and Matthias Kannegiesser
The 2011 UN Conference on Climate Change in Durban, South Africa ended on Sunday, December 11 with the near fatigue of the international negotiators. The core outcome of the final negotiations marathon, the “Durban Platform,” met with very mixed reviews: From “breakthrough” and “watershed” to “disappointment” and “meager results.” The following viewpoint offers a perspective of what was achieved, what was not, and what the implications are for all of us.
The most notable achievement of the 17th Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) was that all countries including United States, China and India agreed to enter a negotiation process towards legally binding GHG (Greenhouse Gas) emission reduction targets. This is indeed a breakthrough in the 20 year history of international environmental negotiations since the Rio Summit in 1992. This “Durban Platform for Enhanced Action”¹ thus provides for the possibility that a truly global and legally binding approach of industrialized and developing countries can still be forged to address global climate change.
Also, a clear roadmap for the continued negotiations has been agreed upon, stipulating 2015 the year by which the agreement on global targets should be adopted. It would then enter into force upon national ratification by 2020, at the latest. Until then, the validity of the Kyoto Protocol is to be extended until at least 2017, safeguarding the international framework for the functioning of Kyoto flexibility mechanisms such as the Clean Development Mechanism.
A further important step forward is the decision to launch the Green Climate Fund, a proposed annual financing mechanism of 100 billion USD for climate change mitigation and adaptation investment. To put this in perspective: global “clean energy” investment in 2010 amounted to roughly 200 billion USD², so the Green Climate Funds’ target would make up a very significant share of the global investment volume. Furthermore, it would be highly likely to significantly boost the share of clean energy investment in developing countries, thus opening markets that are currently only receiving a fraction of the global investment flow.
The key deficiency of the Durban results is lack of speed. The inexorable march of global climate change will not wait until complex international agreements are forged and ratified. Scientists expect that global emissions have to be stabilized by 2015 and start to decrease already by the year 2020 in order to limit global warming to the 2° Celsius target that was agreed upon at COP 15 in Copenhagen.³ Expert projections assert that with existing commitments, global mean temperature will increase by 3.5° Celsius.4 So, given what science is telling us, likelihood is high that the political process agreed upon in Durban will result in “too little too late,” hence catastrophic levels of climate change will become unavoidable at this rate of progress.
Of course, the now-acknowledged willingness to negotiate a binding deal does not in any way mean that such an agreement will actually be adopted in 2015, let alone that it will be ratified by member states by 2020. The Canadian announcement of December 12th to drop out of the Kyoto Protocol is clear testimony to the very real possibility that no agreement will be reached as national interests dominate decision making. Hence, while the Durban agreement ensures that talks will continue, it cannot provide any certainty that these talks will produce even belated results.
So what follows for all of us? In our view, these results are nothing less than a call to action for us – as corporations, consumers and cities. Durban has confirmed that the political process will neither provide the necessary speed nor the certainty that necessary actions to mitigate catastrophic rates of climate change will be taken in due time. Since the risk of climate change is real, we need to find appropriate measures to mitigate the risk. And we think there are plenty of ways and many promising developments already underway:
- Consumers have never been better informed than they are today. This enables them to make better decisions and accelerate product innovation by “pulling” ever more sustainable products or by refusing to buy from non-sustainable companies. Combining this “customer energy” with an awareness of sustainability challenges that politics fails to address in time can have a significant impact on climate change. By making explicit what certain products and services cause in terms of carbon footprint, consumers have the necessary information in hand. Combining this with the options to reduce and/or offset the induced carbon footprint can make consumers active agents to implement climate protection, effective immediately.
- More and more Corporations have understood that sustainability and climate change related issues within them are among the top priorities that companies need to address strategically and communicate pro-actively: at the end of 2011, over 5500 international corporations had a corporate sustainability or corporate social responsibility report in place, up from 2500 only five years earlier despite the financial crisis. Among top-ranking, publically traded companies such as the FTSE 100, penetration of corporate responsibility reporting was over 90% in 20105. Sustainability KPIs, governance structure and processes have thus become integral to standard corporate organization, and most such companies are actively managing and reporting GHG emissions. Also thanks to the Durban results, there will be a continuous policy discussion and likelihood that restrictive GHG reduction policies will impact corporations globally, thus supporting the rationale that such efforts are not “nice to have” policy but an emerging “must have.” But corporate action is not only compliance driven, it is increasingly also customer driven: In the consumer goods sector, for example, carbon and/or energy-related sustainability commitments are a significant trend among leading players worldwide although most companies are not directly subject to carbon regulation. In the automotive sector, most companies are racing to develop electric vehicles, with their inherent efficiency gains and ability to switch to “green” energy, as consumers are expected to demand these in the future. The utility sector is increasingly embracing the notion that renewable energies, backed by strong public and political will, can replace a significant share of current fossil-fired capacities. Renewables will also play an increasing role in self-consumption by off-the-grid energy consumers as distributed energy systems become competitive.
- With more than 50% of world population living in Cities, their role and potential impact on climate change will grow. It is in cities where many innovative, efficient concepts from energy-positive buildings to public and electric transport to advanced water conservation efforts will be implemented. Also cities, more than nations, compete with each other and increasingly seek to differentiate themselves. Mayors and city administrations have discovered sustainability as a key attraction, advertising their city as a desirable place for citizens to live and as a productive, innovative environment where corporations can find talent, partners and customers. Hence cities close the loop among other key actors in implementing climate protection.
In conclusion, we would argue that the Durban results should be interpreted by everyone concerned with climate change as an urgent call for action, rather than a defeat. The positive news is that a political process will continue to exist and thus provide continued momentum to the debate. But it is now also clearer than ever before that politically negotiated treaties will no longer be able to prevent catastrophic rates of climate change from happening. Instead, consumers, corporations and cities can and must leverage the existing means at hand to pick up speed and deliver tangible results.
Jochen Hauff is Director of Renewable Energy & Sustainability and can be reached at Jochen.Hauff@atkearney.com. Matthias Kannegiesser is an Associate Consultant and can be reached at Matthias.Kannegiesser@atkearney.com. Both are based in the Berlin office of A.T. Kearney, a global management consulting firm.
The views expressed in this paper are those of the authors and do not necessarily represent the views of A.T. Kearney or its Global Policy Business Policy Council. Nor are these views meant to suggest specific investments or investment strategies. They are an expression of opinion.
Oxfam “Hungry for Climate Action” table in Durban via Oxfam International
1 See final text: “Establishment of an AdHoc Working Group on the Durban Platform for Enhanced Action.”
Unedited version, available at www.unfccc.int
2 Compare the PEW’s 2011 report: Who’s winning the clean energy race?
3 Compare the IPCCs Forth Assessment Report available at www.ipcc.ch
4 Compare, for example, www.climateactiontracker.org
5 Compare the statistics section at www.corporateregister.com