THE BUSINESS OF

CLIMATE & THE CLIMATE

FOR BUSINESS

ICCC Coffee Morning June 5, 2014

Dr. Andrew Steer President & CEO

World Resources Institute

Apples and Socks

$180 billion Mitigation $100 billion Adaptation

$100 billion Copenhagen

$30 billion Fast Start

$95 billion Today’s Annual Flows

The Right Way to Look at It

$10 Trillion

$500 Billion How to finance the core..

.. And the increment

WRI’S CORPORATE PARTNERS

BUILDING OUR ECONOMIC CAPACITY: NEW

CLIMATE ECONOMY INTERNATIONAL COUNCIL

Co-Chair:

Felipe Calderón Dan Doctoroff Luisa

Diogo Minouche Shafik Co-Chair: Lord

Nicholas Stern

Ingrid Bonde Sharan Burrow Helen Clark

Kris Gopalakrishnan Chad Holliday Sri Mulyani Indrawati Ricardo Lagos Trevor Manuel

Paul Polman Zhu Levin

Takehiko Nakao

Chen Yuan Angel Gurría Jens Stoltenberg Michel M. Liès Annise Parker

(McKinsey 2010)

Estimated costs of abating global greenhouse gas emissions

Resource efficiency: Investment Dynamics

1990 2000 2010 2020 2030 2035

45

40

35

30

25

20

Global CO2 emissions need to peak and start falling soon

Source: World Energy Outlook 2012, IEA

450 Scenario

Efficient World

Scenario

New Policies

Scenario

Current Policies

Scenario

2. Directed technical change

Porter and van der Linde (1995): The innovation effect

… which can lead to

increased

competitiveness and

profitability.

(Strong Porter

hypothesis)

Policy promotes

innovation that

reduces the cost of

regulation

(Weak Porter

hypothesis)

OECD 2010

Index of innovation in climate change mitigation technologies (1990 = 1)

2. Directed technical change

Falling costs in solar PV

(US Department of Energy, 2011)

China leads on renewable energy Renewable energy installed capacity (excluding large hydro)

(Pew, 2012)

0

20

40

60

80

100

120

140

China UnitedStates

Germany Spain Italy Japan India France Brazil

Gig

aw

att

s

China U.S. Germany Spain Italy Japan India France Brazil

Images: Wikipedia, Flickr/The National Guard

“Risky Business” – June

1990

Source: IEA 2013; IMF 2013

SUBSIDIZING THE WRONG THING Fossil fuels vs. renewable energy

Fossil fuel

subsidies

Renewable energy

subsidies

$2t (including

externalities)

$500b $100b

1 SUSTAINABLE PALM

OIL: A NEW ERA?

Image: istockphoto

THE YEAR OF

CITIES: HOW

WILL THEY

GROW?

SUSTAINABLE

PALM OIL: A

NEW ERA?

RESTORATION:

A 2 BILLION

HECTARE

OPPORTUNITY?

0

5

10

15

20

25

0 5000 10000 15000 20000 25000 30000 35000 40000 45000

CO

2 e

mis

sio

ns

pe

rcap

ita

(met

ric

ton

s)

GDP per capita (PPP, constant 2005 international $)

USA

Australia

Ireland UK

Japan

France Greece

Korea Rep.

Malaysia

Mexico

Brazil

Thailand

China

India

Russia

High-carbon growth path

Low-carbon growth path

GREENING GROWTH

Through low-carbon cities

0 100 200 300 400 500

CHP

Coal fired

Natural gas CCGT

Nuclear

Small hydro

Large hydro

Geothermal - flash plant

Wind - onshore

Municipal solid waste

Landfill gas

Biomass - incineration

Geothermal - binary plant

Biomass - gasification

PV - c-Si tracking

PV - thin film

Biomass - anaerobic digestion

PV - c-Si

STEG - tower & heliostat w/storage

STEG - parabolic trough

Wind - offshore

Fuel cells

STEG - parabolic trough + storage

STEG - tower & heliostat

STEG - LFR

Marine - tidal

Marine - wave

LCOE BNEF EU Carbon Forecast Q1 2013 Central Scenario Q1 2012 Central Scenario

-24%

-4%

-

+17%

+5%

-

+14%

-29%

-1%

-

-

$1,058 +9%

$861 +10%

+2%

+9%

-

+3%

+1%

-10%

-28%

-

-

+6%

+2%

-14%

-

Coal Fired LCOE

Global Levelized Cost of Electricity Q1 2012 – Q1 2013 ($/mWH)

Technology cost: improving but still challenging

Source BNEF

Image: Flickr/RodrigoSolon

THIS?

OR THIS?

Image: Flikr/Andreas

CITIES IN THE LEAD

Image: istockphoto

1

Image: Wikimedia

TOWARD A CLIMATE DEAL?

We didn’t inherit this planet from our parents..…

…..we borrowed it from our children