It’s the economy, stupid: winning the sustainability debate

Christiana Figueres was the driving force behind the historic Paris accord on carbon emissions. But the former UN climate change chief's work is far from done, she tells mega.

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Christiana’s thoughts on a window ©mega/Natsuko Waki

Christiana Figueres is on a rare stopover at her home in central London after a five-week trip that took her to Chile, Hong Kong, Beijing, California and Brussels.

From the words she has scribbled onto on the windows-cum-whiteboard in her reception room – “2020”, “milestones”, “optimism” – it’s clear that the former UN climate chief and architect of the historic 2015 Paris agreement on global warming expects to be back on the campaign trail soon.

Since leaving her influential role at UN, the effervescent Costa Rican diplomat has arguably become an even more formidable force in the global drive to halt climate change.

Through the Mission 2020 programme she now heads, Figueres is aiming to persuade businesses, investors and policymakers across the world to slash carbon emissions. Key to the success of the crusade, she explains, are the economics of her case rather than the science.

“Decarbonising the stagnant global economy is the opportunity of the century to jumpstart growth. If we invest seriously in new technology, infrastructure and transport that are climate-resilient, the economy will thrive and create millions of jobs,” she says.

The numbers support her argument. The International Renewable Energy Agency estimates that investments in renewable power and energy efficiency would make the world economy USD19 trillion richer by 2050 and create 6 million jobs.

Decarbonising the stagnant global economy is the opportunity of the century to jumpstart growth.

It is telling that China, India and other emerging economies aspiring to Western standards of economic development have launched what are among the world’s boldest initiatives to adopt renewable energy. “None of them are doing this for altruistic purposes, to save the planet. It’s hard-nosed market forces driving them: reducing costs, improving efficiency, and achieving high returns on investments which are much safer.”

Three-year window

Figueres stresses that the next three years will be critical if humanity is to reverse climate change.

Why? It’s because should emissions continue to rise beyond 2020, or even remain level from that point, keeping the global thermostat from rising “well below 2 degrees”, which is central to the Paris accord, becomes almost impossible.

Hitting this deadline is also critical in meeting the UN Sustainable Development Goals (SDGs) – the organisation’s blueprint for a more resilient and sustainable world, by 2030.

carbon crunch

“The prospects of achieving some of the SDGs will be largely determined by 2020, or at least the cost of doing so. Obviously we can decarbonise at a much higher cost – financial and social – but what we’re trying to do is to find the path with the least cost and least disruption to the global economy,” Figueres says.

As well as advising governments and policymakers, she also seeks to persuade asset owners and wealthy families that investing in the transition to a low-carbon economy is an attractive opportunity – but only for the next three years.

“After that, it becomes a very urgent necessity which will not come at a low cost,” she says. “The risk of not acting on climate change is very serious while the reward for acting now is high. Asset-owners should ask themselves whether they want to be part of the problem or part of the solution – they can’t be both.”

Next gen and triple bottom line

Decarbonisation certainly requires enormous investments. The Organization for Economic Cooperation and Development estimates that investments in green infrastructure needs to double to an annual USD2 trillion – 2 per cent of global GDP – between 2012 and 2030 to make the transition to a low-carbon world.

“It doesn’t mean new money. Capital is there. It just needs to shift into something that is greener than it is now,” Figueres says.

One way to help plug this finance gap, she says, is to invest in green bonds – fixed income products linked to environmentally positive projects. Issued by organisations and companies such as the World Bank, City of Johannesburg and Apple, they raised more than USD80 billion from climate-conscious investors in 2016, double the amount of the year before but still a fraction of the overall fixed income market.

The burgeoning green bond market is beginning to attract climate-conscious younger investors.

“The next generation is very interested in impact investment and in moving their portfolios away from being decided exclusively by the bottom line,” says Figueres. “Now it’s about triple bottom line – profits, environment impact and social considerations – and creating corporations with purpose… We’re facing a big transition in corporate identity.”

While welcoming the financial industry’s adoption of environmental, social and governance standards in the building of investment portfolios, she feels there is still plenty more it can do.

It’s about triple bottom line... We’re facing a big transition in corporate identity.

“My concern about ESG is that it’s a nice to have: on page 67 of annual report, here’s one paragraph of what (a company is) doing on ESG. But that’s not going to cut it,” she says.

“It needs to go way beyond this. Carbon exposure and a shift from high to low carbon have to be on page one.”

Greener air travel and shipping

Figueres seems to be unfazed by the recent announcement by the US administration of its intent to withdraw from the Paris climate deal. “You have to differentiate between the White House and the US economy. The two big levers that are acting on decarbonisation are cities and corporations, and they are standing up. Even if the US decides to withdraw, that doesn’t change the course of the global economy.”

Indeed, since the White House announcement, more than 2,500 US cities, states, businesses and universities have signed a letter reaffirming their commitment to the Paris agreement’s goals.

What is more, efforts to reduce CO2 emissions are occurring outside of the Paris framework.

In October 2016, the UN International Civil Aviation Organization reached a preliminary agreement to reduce carbon emissions in the aviation sector, a fast-growing source of air pollution. The new ICAO framework, when implemented, will represent the first emissions cap on a global industry that does not noticeably increase costs for consumers. The International Maritime Organization is pursuing similar goals for shipping.

Impossible is not a fact – it’s an attitude. And we need to change our mental chip.

Figueres had been calling for such an agreement on aviation since she became the UN climate chief in 2010. It may be partly because she is painfully aware of her own impact to the environment, flying around the globe to attend various conferences. “My absolute cardinal sin is air flights,” she admits, adding however that she buys a carbon-offset scheme for passengers where available.

road

As for her other transport choices, Figueres used to own a Toyota Prius hybrid car but now takes a public transport. “Ownership of vehicles is becoming passé. The whole status symbol of owning a car is no longer compelling to the next gen. Tubes and busses make an extraordinary amount of sense.”

A lot on her plate, what does she consider as the main obstacle to the policies she advocates?

“The obstacle is here,” she says, pointing to her head. “We can change policies, make financial shifts and deploy technology if we decide we want to do so. Impossible is not a fact – it’s an attitude. And we need to change our mental chip. That’s what we are doing, by inviting everyone to realise that there is a huge opportunity here.”

Top image “Hokkaido Cape Notoro” © Masatoshi Konishi (Licensed under CC BY 4.0)