Managing Sustainability in a Changing Climate

“Never have so few asked so much of so many”

Presented by Chris WalkerSt. John’s University November 17, 2009

Managing Sustainability in a changing climate

OverviewSo few…..

The depressing field of climatology and the imperative to act  So much…

The magnitude of the problemThe magnitude of the solution

 Of so many…What is being done…?The need for US leadership - Where is the US going, anticipation for

US national actionOutlook for CopenhagenChina and IndiaExamples of corporate action

Innovation Investment, growth potential

2

The Few

3

Key Trends• One year ago…so 2008…. Politics has shifted - not if but when on carbon constraints in the US and globally

>Imperatives driving action:

1.Climate Science (we can not afford to wait);

2.Growth in emissions – deep cuts required… 80% in Developed nations; 60% Global emissions by 2050.

3.Political Process - More policies are in place – but the gap remains large with what needs to be done

• Domestic – sea change from Bush to Obama;

• Int’l - need for a successor to Kyoto to be negotiated in Copenhagen in December 2009

Climate Change and NYC

Northeast Climate Impacts Assessment (NECIA)

Asked so much -

Economics - The Magnitude of the ProblemEmissions intensity of world economy (per

unit gross global product, GGP) needs to be 75% lower by mid-century

Costs of Inaction – Business as Usual: Decrease of 5-20% in consumption income over the next 50 years.

Cost of Action – 550 parts per million CO2: 1% of annual global GDP for the next 50 years.

“Climate Change is the greatest and widest-ranging market failure the world has ever seen”- Nicholas Stern

0.51.1

0.3

1.41.8

1.0

450 ppm 400 ppm550 ppm

0.2

2.1

3.3

2.5

Defence spending

Insurance spending

Oil price increase

(USD +30/bbl)

Global foreign

Aid

Comparables % of global GDP 2005Total cost of abatement*% of global GDP 2030

20552005

14

7

Billion of Tons of Carbon Emitted per Year

1955

0

Currently

pro

ject

ed

path

Flat path

Historical emissions

1.9

2105

14 GtC/y

7 GtC/y

Seven “wedges” - A “wedge” is a strategy to reduce carbon emissions that grows in 50 years

from zero to 1.0 GtC/yr.

Magnitude of the Solution

O

Socolow & Pacala: Stabilization Wedges

Energy Efficiency

Decarbonized Electricity

Fuel Displacement by Low-Carbon Electricity

Forests & Soils

Decarbonized Fuels

Stabilization Triangle

2004 2054

7 GtC/y

14 GtC/y

Fill the Stabilization Triangle with Seven Wedges

Methane Management

Magnitude of the Solution

Slide 10

The Carbon Cost Curve or what do we do first...

Greenhouse Gas emissions by sector

Of the Many

13

Regional Initiatives

State Emissions Are Significant…

Based on 2001 emissions

China in 07

What will US Congress do?The Senate is the key power in the climate debate…• Pass domestic legislation - House majority + 60 Senators• Ratify international agreements – 67 Senators

Proxy = Lieberman-Warner Climate Security Act of 2008 : Vote to proceed by State (Blue : Yea-Yea, Red: Nay-Nay; Gray: Yea-Nay)

Managing Expectations on the Road to Copenhagen

16

Largest CO2 emittors

Per-capita fossil-fuel CO2 emissions

Managing the problem….

The reaction….Business is: • Speaking Out – US CAP (Fortune 500 call for US legislation

• Business Council Survey: 40% CEOs believe global warming may be most serious policy challenge

• Acting –Companies servicing low carbon economy revenue hit $300bn last year according to HSBC Climate Index – Google launched ‘Google RE<C initiative to develop clean,

alternative sources of energy (stands for ‘Renewable Energy Cheaper than Coal’)

– Carbon Down Profits Up – 33 companies have documented financial benefits totally US$9.3 billion

• Carbon Disclosure Project (institutional investors

More evidence of Business reactionYou know its serious when the Lawyers and Accountants get involved…..

There are now an estimated 2,340 lobbyists on climate change – an Increase of more than 300% in five years.

Climate as a corporate board risk management issue Reporting - “material events and uncertainties” Shareholder resolutions about carbon disclosure Liability

21

Climate Litigation: Filings

1

21 1 1 1 1

4

1

6

8

38

31

17

0

5

10

15

20

25

30

35

40

1989 1994 1995 1997 1999 2001 2002 2003 2004 2005 2006 2007 2008

Year

Nu

mb

er

of

Cases

22

The Insurance Industry: Natural catastrophe losses have increasedInsured losses 1970-2008 (Property and business interruption losses)

Slide 23

High Density= 210 Rooftops

Residential Flood CoverFreeport (13,819)2705 policiesRockville Centre (9,421)104 policiesBaldwin (2,718)19 policies

Concentration of Risk

source: NHC, Google earth

Natural catastrophe losses have increased

Tesla MotorsEnergy

InnovationsAmyris

Biotechnologies

Pacific Ethanol

NanosolarNanosys

MicrosoftSun

Microsystems

GoogleeBay

PayPalHewlett Packard

The Greening of Silicon Valley

Information Technology - 1990’s

Green Technology -

2008

Global New Clean Energy Investment

25Source: New Energy Finance

Global Carbon Trading Markets

If we don’t act we will need to adapt….if possible