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With or Without a Global Treaty, Businesses Must Take the Lead on Climate Change

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The private sector must assume the mantle on climate change in the absence of a global agreement, whatever transpires at the UN Climate Summit in New York this month and other upcoming high-level climate change meetings.

 

Renewed attention to climate change by China, the United States and the European Union is creating space for business to engage in a new operating environment in which governments are creating frameworks for innovation and international financial institutions are increasingly funding climate change projects.

“Creating a stable framework has helped our businesses create the solutions we need to combat climate change,” said Rasmus Helveg Petersen, Minister of Climate, Energy and Building of Denmark. “The transition from black to green economies will only be achieved when businesses can make decisions. We need to recognize the need for profitability when we do our regulatory work.”

Xie Zhenhua, Vice-Chairman, National Development and Reform Commission, People’s Republic of China, and China’s lead negotiator on climate change at the United Nations, called on businesses and governments to respond to the climate change challenge. “We need to find a circular pathway to development,” he said. “Businesses need profit, but they need to find a way to achieve common prosperity. If we can do that, we can respond to the climate change challenge and turn the world into a more beautiful place.”

The Inter-American Development Bank has devoted 22% of its total lending towards climate change related issues, said Luis Alberto Moreno, President, Inter-American Development Bank, Washington DC; World Economic Forum Foundation Board Member. “There is huge innovation taking place in the private sector around solutions. This is happening in the absence of a global agreement. This is the most exciting part of what we are seeing today.”

Many businesses through their supply chains and manufacturing processes are using technology to reduce their emissions to reduce costs. Others are technology pioneers, breaking new ground in the fight against climate change. Mark Herrema, Co-Founder and Chief Executive Officer, Newlight Technologies, USA, said: “What is missing is something to bridge the gap between what we need to address [in terms of climate change] and people who ask why they cannot use carbon to growth their businesses,” he said. “Industry is taking climate change into their own hands and sequestering carbon.”

Feike Sijbesma, Chief Executive Officer and Chairman of the Managing Board, Royal DSM, Netherlands, said the public and private sectors must work together but that business must take the lead. “Mother Earth is not helped by targets and good intentions, but real innovations to change things,” he said. “We in the private sector cannot hide ourselves behind the lesser progress made in public debates.”

Panellists, with the exception of Herrema, were optimistic about the potential for a global agreement on emissions reduction in Paris in December 2015. Petersen said: “We are all committed to reaching an agreement in Paris. This is where the work begins, not where it ends.” Moreno said that the absence of an agreement is “terrible for humanity”, but he remains optimistic. Xie pointed out that during negotiations with various governments he has heard no opposition to an agreement. Herrema noted that in his community, it is assumed there will be no agreement. “We have to fix the problem, assuming this is the case,” he said.

Xie chastised the European Union for its unstable carbon market. The price of carbon has plummeted since the EU Emissions Trade Scheme was launched, purportedly as the core of the international carbon market. Its cap-and-trade system offers businesses quotas, which Xie claimed acts as a deterrent. “Businesses have no incentive to reduce their emissions and that is why the market is so low,” he said. “In Paris we need to set a robust global reduction target for 2030. If this is done, there can be an international market for carbon.”

Xie pointed out that the stability of the carbon market has a direct effect on climate change negotiations. “Stable and long-term emission targets are needed so businesses can see the prospects of the carbon market,” he added.

Referring to carbon credit derivatives, Sijbesma advocated for more market control of carbon trading. “The private sector doesn’t know what to base future investments on. The carbon market should not be a new toy in the hands of the financial world to speculate and trade upon,” he said.

The session comes 10 days before the UN Climate Summit in New York, which aims to drive action towards achieving an accord on climate change at the end of 2015. China and the United States have renewed their attention on climate change recently, with commitments to reduce carbon intensity, improve energy efficiency and clean energy generation.

The UN Secretary-General and the Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC) have invited the World Economic Forum to advance public–private collaboration to deliver climate solutions. More than 200 business leaders together with heads of international institutions and non-governmental organizations took part in an unprecedented number of climate change sessions at the Forum’s Annual Meeting 2014 in Davos-Klosters. The Forum has taken this dialogue further to drive action on several key areas of focus of the UN Climate Summit in New York, which starts on 23 September 2014. Progress on this will be shared at the summit.

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At COP24, countries agree concrete way forward to bring the Paris climate deal to life

MD Staff

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After two weeks of crunch negotiations – with overtime – the almost 200 parties gathered in Katowice, Poland, for the United Nations COP24 two-week climate change conference, adopted on Saturday a “robust” set of implementing guidelines for the landmark 2015 Paris Agreement, aimed at keeping global warming well below 2°C compared to pre-industrial levels.

Following several sleepless nights, cheers and applause welcomed the COP24 President, Michal Kurtyka, as he opened the conference’s closing plenary meeting, which had been postponed close to a dozen times.

He thanked the hundreds of delegates in the room for their “patience”, noting that the last night “was a long night”. General laughter followed when the room’s big screens showed a delegate yawning whole-heartedly; the meeting had been set to wrap up on Friday.

“Katowice has shown once more the resilience of the Paris Agreement – our solid roadmap for climate action,” said Patricia Espinosa, who heads the UN Framework Convention on Climate Change  (UNFCCC) secretariat and who was speaking on behalf of António Guterres, the UN Secretary-General.

Mr. Guterres, who has made addressing the impacts of climate change one of the top priorities of his term as UN Secretary-General, came three times to Katowice in the past two weeks to support the negotiations but, given the repeated delays, was forced to leave before the closing plenary, due to prior engagements.

The adopted guidelines package, called the “rulebook” by some, is designed to encourage greater climate action ambition and benefit people from all walks of life, especially the most vulnerable.

Trust and climate action financing

One of the key components of the ‘Katowice package’ is a detailed transparency framework, meant to promote trust among nations regarding the fact that they are all doing their part in addressing climate change. It sets out how countries will provide information about their national action plans, including the reduction of greenhouse gas emissions, as well as mitigation and adaptation measures.

An agreement was reached on how to uniformly count greenhouse gas emissions and if poorer countries feel they cannot meet the standards set, they can explain why and present a plan to build up their capacity in that regard.

On the thorny question of financing from developed countries in support of climate action in developing countries, the document sets a way to decide on new, more ambitious targets from 2025 onwards, from the current commitment to mobilize US$100 billion per year as of 2020.

Another notable achievement of these negotiations is that nations agreed on how to collectively assess the effectiveness of climate action in 2023, and how to monitor and report progress on the development and transfer of technology.

“The guidelines that delegations have been working on day and night are balanced and clearly reflect how responsibilities are distributed amongst the world’s nations,” said Ms. Espinosa in a press statement. “They incorporate the fact that countries have different capabilities and economic and social realities at home, while providing the foundation for ever increasing ambition.”

“While some details will need to be finalised and improved over time, the system is to the largest part place,” she added.

Article 6: the one major matter nations couldn’t find consensus on

Ultimately, the negotiations tripped on one key issue which will be back on the table at the next UN climate change conference, COP25, set to take place in Chile. This is the matter known in specialized circles as “Article 6,” regarding the so-called “market mechanisms” which allow countries to meet a part of their domestic mitigation goals.

This is done for example through “carbon markets” –  or “carbon trading”, which enables countries to trade their emissions allowances. The Paris Agreement recognizes the need for global rules on this matter to safeguard the integrity of all countries’ efforts and ensure that each tonne of emissions released into the atmosphere is accounted for.

“From the beginning of the COP, it very quickly became clear that this was one area that still required much work and that the details to operationalize this part of the Paris Agreement had not yet been sufficiently explored”, explained Ms. Espinosa, noting that the majority of countries were willing to agree and include the guidelines on market mechanisms but that “unfortunately, in the end, the differences could not be overcome”.

Other key COP24 achievements

In addition to the political negotiations among Member States on the Paris guidelines, over the past two weeks, the hallways of COP24 buzzed with close to 28,000 participants having lively exchanges, sharing innovative ideas, attending cultural events, and building partnerships for cross-sectoral and collaborative efforts.

Many encouraging announcements, especially on financial commitments for climate action, were made: Germany and Norway pledged that they would double their contributions to the Green Climate Fund, established to enable developing countries to act;  the World Bank also announced it would increase its commitment to climate action after 2021 to $200 billion; the climate Adaptation Fund received a total of $129 million.

The private sector overall, showed strong engagement. Among the highlights of this COP, two major industries – the sports and the fashion worlds – joined the movement to align their business practices with the goals of the Paris Agreement, through the launch of the Sports for Climate Action Framework, and the Fashion Industry Charter for Climate Action.

Many more commitments were made, and concrete, inspiring actions were taken.

“From now on, my five priorities will be: ambition, ambition, ambition, ambition and ambition,” said Patricia Espinosa on behalf of UN chief António Guterres at the closing planery. “Ambition in mitigation. Ambition in adaptation. Ambition in finance. Ambition in technical cooperation and capacity building. Ambition in technological innovation.”

To achieve this, the UN Secretary-General is convening a Climate Summit on 23 September, at UN Headquarters in New York, to engage Governments at the highest levels.

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EU plays instrumental role in making the Paris Agreement operational

MD Staff

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The UN climate conference (COP24) in Katowice, Poland, concluded today with the adoption of a clear rulebook to make the Paris Agreement on climate change work in practice across the world. The completion of the rulebook was the EU’s top objective in these negotiations.

The Paris rulebook will enable the Parties to the Paris Agreement to implement, track and progressively enhance their contributions to tackling climate change, in order to meet the Agreement’s long-term goals.

Commissioner for Climate Action and Energy Miguel Arias Cañete said: “In Europe, and working united as Europeans, we have reached a balanced deal on the rules to turn the Paris Agreement into action.The EU played an instrumental role in reaching this outcome, working with allies from both developed and developing countries and with major economies, in particular China, to raise ambition and strengthen global efforts to fight climate change. We have responded to the urgency of science by acknowledging positively the IPCC special report on global warming of 1.5°C. This was a key ask for the EU and its allies. The Paris rulebook is fundamental for enabling and encouraging climate action at all levels worldwide – and success here also means success for multilateralism and the rules-based global order. The EU will continue to lead by turning our commitments into concrete action, leaving no one behind in the transition to a climate-neutral future; and inspiring other countries to make this necessary transition. I would like to thank Minister Kurtyka and the Polish COP Presidency for a job well done, and to Minister Köstinger and her team from the Austrian Presidency for helping the EU stay united and leading.”

EU action

The EU’s nationally determined contribution (NDC) under the Paris Agreement is to reduce greenhouse gas (GHG) emissions by at least 40% by 2030 compared to 1990, under its wider 2030 climate and energy framework. All key legislation for implementing the 2030 emissions target has already been adopted, including the increased EU’s 2030 targets on renewable energy and energy efficiency – which if fully implemented could lead to an EU GHG emissions cut of some 45% by 2030, the Commission has estimated – as well as the modernisation of the EU Emissions Trading System and 2030 targets for all Member States to cut emissions in sectors such as transport, buildings, agriculture and waste.

Back in November 2016 – just before the Paris Agreement entered into force – the Commission presented the Clean Energy for All Europeans Package, aimed at setting the most advanced regulatory framework that will make the European energy sector more secure, more market-oriented and more sustainable.
We acknowledge that this transition is going to be more difficult for some regions than others – notably those regions, where the economy is based on coal production.
The Commission, together with these legislative proposals, outlined a special initiative to work with coal and carbon-intensive regions in transition so that they can also benefit from the clean energy transition. The clean energy transition is a transition for all Europeans and its socio-economic impacts must be carefully managed.

EU ambition also goes beyond 2030. Following the invitation by the EU leaders, the Commission on 28 November presented a strategic long-term vision for a prosperous, modern, competitive and climate-neutral European economy by 2050.

The strategic vision, which follows wide stakeholder consultation and takes into account the recent IPCC special report on 1.5°C, is an ambitious vision for ensuring a prosperous, modern, competitive and secure economy, providing sustainable growth and jobs and improving the quality of life of EU citizens.

The strategic vision, which the Commission presented to global partners at COP24, will kick-start an EU-wide debate which should allow the EU to adopt a long-term strategy and submit it to the UNFCCC by 2020. To this end, the European Council invites the Council to work on the elements outlined in the Communication.

The EU also remains committed to the collective global goal to mobilise USD 100 billion a year by 2020 and through to 2025 to finance climate action in developing countries, from a variety of public and private sources. In 2017, the EU, its Member States and the European Investment Bank together provided a total EUR 20.4 billion in climate finance, around a 50% increase from 2012.

Key outcomes

The Paris Agreement rulebook contains detailed rules and guidelines for implementing the landmark global accord adopted in 2015, covering all key areas including transparency, finance, mitigation and adaptation.

Key COP24 outcomes include:

  • The first ever universal system for the Parties to track and report progress in climate action, which provides flexibilities to those countries that genuinely need it. This will inspire all Parties to improve their practices over time and communicate the progress made in clear and comparable terms.
  • A good, consensual outcome on adaptation issues. The Parties now have guidance and a registry to communicate their actions as regards to adapting to the impacts of climate change.
  • As to the global stocktake process, the next moment to review collective action, which the EU considered vital for the Paris Agreement, the result provides a solid basis for further elaboration on the details of the process. The global stocktake will invite Parties to regularly review progress and the level of ambition based on the latest available science.
  • Finally, with the decisions on finance and technology, there is now a solid package that the EU trusts will provide reassurances to our partners on our commitment to continued global solidarity and support.

Background

The 24th Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) – ‘COP24′ – took place from 2-14 December in Katowice, Poland, presided over by the Polish government. It brought together ministers and government officials, as well as a wide range of stakeholder representatives.

The Paris Agreement, adopted in December 2015, sets out a global action plan to put the world on track to avoid dangerous climate change by limiting global warming to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature rise to 1.5°C. It entered into force on 4 November 2016. 195 UNFCCC Parties have signed the Agreement and 184 have now ratified it.

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Cleaning up couture: What’s in your jeans?

MD Staff

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Today you made a decision that could change the face of the planet. You decided what to wear.

When was the last time you looked in your wardrobe and couldn’t find anything suitable?

Screen stars on Netflix wear stunning but different couture in every episode. Celebrities boast cutting edge design, always pictured in a new outfit. Are you keeping up? Don’t worry. The latest news is that you don’t have to.

If you listen to Deputy Mayor of Paris—and Parisians would know—Antoinette Guhl, as stated in the report A New Textiles Economy: “Circular is the new black! We need a fashion industry based on three principles: clean, fair and good.”

Our clothing is an expression of individuality. We use it to make ourselves unique as well as provide comfort and protection. But the environmental cost of our clothes is adding up.

The industry’s environmental footprint is immense. It extends beyond the use of raw materials. Combined, the global apparel and footwear industries account for an estimated 8 percent of the world´s greenhouse gas emissions.

Lifecycle assessments show—taking cotton production, manufacture, transport and washing into account— it takes 3,781 litres of water to make one pair of jeans. The process equates to around 33.4 kilogrammes of carbon equivalent emitted, like driving 111 kilometres or watching 246 hours of TV on a big screen.

Even just washing our clothes releases plastic microfibres and other pollutants into the environment, contaminating our oceans and drinking water. Around 20 per cent of global industrial water pollution is from dyeing and textile treatment.

Yet globally, the industry wields considerable power. It is worth US$1.3 trillion, employing around 300 million people along the value chain.

UN Environment’s Llorenç Milà i Canals, Head of the Life Cycle Initiative, said fashion presents a massive opportunity to create a cleaner future.

But steps must be taken to involve everyone involved in the value chain to address environmental hotspots; define and take bold action on them.

“All actors must play their part in redefining the way value is generated and kept within the apparel sector, moving away from disposable apparel to a sector that generates and sustains value for society without polluting the environment,” he said.

As consumers, this means buying less. Some studies estimate that the average garment is worn ten times before being discarded. Demand for clothing is projected to rise two per cent a year—but the number of times we wear them has dropped one third compared to the early 2000s.

This waste costs money and the value of natural resources. Of the total fibre input used for clothing, 87 per cent is incinerated or sent to landfill. Overall, one garbage truck of textiles is landfilled or incinerated every second.

There are steps we can all take today. Like checking materials are durable and keeping them for longer. Reducing the amount of clothes we buy, reusing and buying second hand items and recycling. Wash them less and smarter: use concentrated liquid soap rather than powdered detergent, which is abrasive and washes more fibers into water.

But while our attitude towards our clothing needs a rethink, so too does the way in which our clothes are produced. Collectively, on a large scale, reducing our environmental footprint requires cutting resource consumption and designing pollution out of clothing altogether.

The fashion industry is starting to take note.

A Pulse survey of decision makers from all industry segments confirms that sustainability is climbing up corporate agendas. Of executives polled, more than half said sustainability informed their strategy—up from last year.

Innovative new technology can play a part in cutting resource use. Cotton and recycled polyester still put a strain on the environment, so finding and developing new sustainable materials is key to reducing natural resource consumption.

In the meantime, developing countries—with a nascent textile industry —have an opportunity to build circular models into production from the start. They can set the bar high for the rest of the world to follow suit.

Ultimately, the key to a sustainable future lies in radically rethinking the way we consume and use clothing, and disrupting current business models. That means buying less. And it means putting pressure on our fashion industry to design a more responsible product.

UN Environment

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