James Murray reviews a year in which terrifying climate impacts wrestled with heartening green business breakthroughs
The default setting of business is optimism.
No one starts a company imagining the day bailiffs knock at the door.
No one goes to a job interview and asks about the redundancy package.
Optimism is doubly important to green businesses.
There is the standard commercial optimism the enterprise will prove a world-beating success. And then there is the environmentalists’ optimism that they might deliver world-saving success.
The past year has seen this optimism sorely tested. Not to breaking point – never to breaking point. But it has still been more brutally challenged than at any point in the decade BusinessGreen has been covering these issues.
The terrifying metrics have been repeated so often they risk losing potency, but there is no alternative but to keep facing up to them.
The story that should dominate every end of year round up from every media outlet on the planet came last month in the form of two reports released at the UN climate summit in Bonn.
The first confirmed atmospheric concentrations of carbon dioxide are at their highest levels in at least 800,000 years and possibly three to five million years.
As Dr Emily Shuckburgh of the British Antarctic Survey told the BusinessGreen Leaders’ Summit this autumn, the last time concentrations of greenhouse gas were as high as they are now sea levels were around 10 metres higher.
Up to two metres of sea level rise this century is now entirely plausible.
However, it was the second report that was the real kicker.
The Global Carbon Project predicted carbon emissions will rise this year after four years when flat emissions fuelled hopes global economic growth and carbon emissions had been decoupled.
There are reasons to hope this is just a blip. The data is preliminary and the primary driver of any increase appears to be lower than expected hydropower output in China, which in turn led to an uptick in coal use. But China remains firmly committed to curbing its coal use and recently confirmed plans for a national carbon market to help drive the switch to cleaner energy sources.
Economic growth and greenhouse gas emissions have not suddenly recoupled.
And yet, even if the estimates of rising emissions prove to be overly pessimistic one thing is clear: they are not falling, are they? And they need to – fast.
Again at our BusinessGreen Leaders’ Summit, M&S’s Mike Barry observed that if, as the world’s science academies insist, we need to ensure global emissions peak by 2020 before falling sharply we have just 1,000 days to save the world.
With each day, month, year that passes the climate crisis gets more daunting.
But for all the progress made by green businesses the lack of urgency amongst political and business elites, not to mention the general populus, remains as palpable as it is terrifying.
Alongside the scientific warnings came economic studies showing investment in clean energy is likely to fall this year.
Thankfully levels of renewables deployment keep rising because the fall in investment is largely a function of the near miraculous reductions in the cost of clean power.
But even taking these plummeting cost into account, overall investment should not be falling – the decarbonisation challenge is too urgent for us to take our time.
The hope remains that once the impacts of climate change become truly explicit a full spectrum response will follow.
But here too optimism and sea fronts took a battering in 2017.
To borrow Al Gore’s line, the newsreels have looked like a “nature hike through the Book of Revelation”.
Despite the lack of an El Nino effect, 2017 is set to be the second or third hottest year on record; hurricanes unprecedented in their power pummelled the US and Caribbean; the largest wildfires California has ever seen burned deep into the Northern Hemisphere winter; scientists warned the “Arctic shows no sign of returning to the reliably frozen region of recent past decades”; studies revealed an ‘ecological armageddon‘ amongst insect populations; droughts fuelled famine and insecurity across East Africa and the Middle East; the UN warned the number of chronically undernourished people has risen for the first time since the turn of the century due in large part to climate impacts. “Alarm bells we cannot ignore,” declared the UN – and yet we can and we do.
Good men and women sought to amplify these alarm bells. David Wallace Wells penned an epic examination of the long tail, unlikely but not impossible risks of full-blown climate breakdown that we all too easily ignore (and got attacked by people who should know better for his trouble). Bill McKibben continued his campaign to raise awareness of the “hot new world” we live in. Emily Shuckburgh teamed up with Tony Juniper and Prince of Wales to produce a beautiful little book that attempted to explain climate risks to new audiences. The peerless George Monbiot again and again highlighted the terrifying and credible environmental projections coming out of the scientific community. Eric Holthaus documented the ‘ice apocalypse’ that is underway at the planet’s poles.
Meanwhile, in the world of business and politics AXA CEO Thomas Buberl pointedly observed that a “+4C world is not insurable”. Mark Carney continued to warn of climate risk and the “tragedy of the horizon”. President Macron stepped seamlessly into the role of global climate leader with his campaign to “make our planet great again”.
One of the few upsides of the climate crisis is it has unleashed a wave of evocative writing and memorable sound bites. Although it’s not much compensation, to be honest. I’d settle for fewer great essays and a more habitable biosphere.
Faced with the litany of climate impacts and avalanche of warnings, David Powell of the New Economics Foundation asked “what is this pathology”? What is it in our psychological make up that allows societies to accept these realities and then fail to adequately respond to them? To essentially shrug off the credible risk of apocalypse?
Pathology is the right word and if it is not yet fully understood we do know the evidence of it is everywhere. Because if 2017 was bleak from an environmental perspective, the political climate felt little better.
2017 was the year when the world’s understanding of the most powerful man on the planet moved from ‘he’s not necessarily dangerous and racist, he just says dangerous and racist things’ to ‘he is dangerous and racist, but he’s not necessarily fascist, he just says fascist things’.
Who knows where we go next.
To watch a US administration that has been completely captured by climate sceptic ideologues responding to hurricanes and wildfires with barely literate hymns to coal power and Arctic drilling felt like a sick joke.
But this disconnect is everywhere.
Mark Campanale of the Carbon Tracker think tank told a story this year of a meeting with a group of fund managers in California, where he struggled to convince them of the climate-related risks in their portfolio even as they looked out the window of the skyscraper they were in and watched fires burn on the horizon.
In her MaddAddam trilogy, the novelist Margaret Atwood envisages a Church of PetrOleum that preaches about how “oil is holy throughout the Bible”. As the Trump administration releases a National Security Strategy that argues US leadership is “indispensable” in pushing back against an “anti-growth” and borderline immoral climate agenda, Atwood’s dystopian imaginings have never felt more prescient.
On this side of the Atlantic, the pathology is nowhere near as prevalent, but climate action has still been comprehensively overshadowed by the unending psychodrama that is Brexit.
There may well be good reasons to leave the EU and Brexit may yet be delivered in a way that averts national disaster. But watching the past year of ministerial mis-steps, botched elections, and Brussels-related monomania has only emphasised how Brexit remains a dire distraction from the real economic, social, and environmental challenges the UK faces.
When even one of the architects of the Vote Leave campaign has said he thought calling the referendum was a terrible idea and there were numerous other reforms the government should have pursued before addressing its relationship with the EU, it is hard to conclude the UK is engaged in anything other than an era-shaping bout of displacement activity – an exercise that could yet hand control of the government to a hard right cabal of climate sceptic, libertarian hacks.
But then again, we are hardly alone.
2017 has seen the forces of authoritarianism on the march – often with a battalion of climate scepticism on their right flank.
In Turkey, in Russia, in Hungary, in the US, even in Germany where support for the hard right effectively denied Merkel the opportunity to move forward with more ambitious decarbonisation plans, the kind of nationalist politics the West thought had been confined to the history books has enjoyed a shocking revival. As one observer put it on Twitter: “Nazis are bad. That is not an argument I was expecting to have to reprosecute”.
2017 was the year the political and cultural cold war that has been simmering since the 2008 financial crash broke into the open.
It is a battle progressive forces cannot duck away from, but it is also of grave concern that a time when international co-operation is desperately required to tackle the escalating climate threat the necessary geopolitical priority has become containing the spread of nationalist autocracy and avoiding the very real risk of a volatile and cornered US president turning trade wars into shooting wars.
The parallels with the 1930s may be imperfect, but at times they have felt fearfully relevant.
Faced with all this the one dominant question of the past year has been how to respond?
How do we get from ratcheting tensions and interlocking crises which are so reminiscent of the 1930s to a new green economic settlement and global low carbon infrastructure blitz to echo the 1950s and 1960s, only without going through any equivalent of the 1940s?
The truth is no-one has the answer.
Many of the people I speak to through my work at BusinessGreen are more worried than they have ever been.
On the record, the veneer of corporate optimism remains in place.
Off the record, for many the nagging sense that we are not making sufficient progress, that the risks are becoming ever more daunting is becoming harder to resist.
The green economy is chalking up more victories than ever before, but like an Escher Drawing the road ahead keeps getting steeper.
As a journalist I have no such professional constraints and few qualms about admitting how scared I become when considering the Himalayan environmental risks we face, which, inevitably, is most days.
When the most important thing in your life is two sons under the age of three and you have a good chance of living well into the second half of the century, the fact the worst climate impacts will not be felt for decades is little comfort.
Where then is the optimism to be found?
Was 2017 really that bleak?
Or are there countervailing forces mobilising against the elite-level indifference and vested interests that have acted a drag on green economic progress?
The good news – and there is good news – is that while they struggled to command headlines there were plenty of encouraging developments to pierce the gloom.
The best news came not in the form of the incremental environmental improvements made by thousands of businesses and governments around the world, but in the signs of inter-locking, economy-wide, systems level change that could yet provide a route to curbing global emissions during the 2020s.
More encouraging still, the pace at which these welcome developments are moving from well-meaning idea to global trend or technological breakthrough appears to be accelerating, even as public support for decarbonisation grows.
The Powering Past Coal Alliance provided one such example, moving from a concept cooked up by the British and Canadian government to a global push backed by over 50 countries, regions and businesses within a matter of months.
Similarly, the Taskforce for Climate-related Financial Disclosures (TCFD) has, in less than a year, moved from an academic exercise to a market-shaping endeavour fully endorsed by 225 global investors with more than $26.3tr in assets under management and 237 firms with a market capitalisation of $6.3tr. It is easy to see how within a few short years every listed company on the planet will face calls from shareholders to explain how they plan to adjust to a decarbonising economy and escalating climate risks.
The divestment trend has enjoyed a longer gestation period, but this year again saw significant breakthroughs. Arguably the three most powerful and influential investors in the world – Norway’s Sovereign Wealth Fund, the World Bank, and Blackrock – all took sizeable steps towards either ending investment in carbon intensive assets or engaging with companies to force them to come forward with climate strategies.
Many of the bellwether businesses that set global corporate norms refused to bow to the bully in the White House and quietly intensified their climate strategies. At the last count over 300 companies had committed to setting and meeting science-based emissions targets. Coupled with the RE100 initiative to source 100 per cent renewables, the EP100 initiative to double energy productivity, and the EV100 initiative to switch to electric fleets, this year saw the emergence of a viable blueprint to decarbonise multinational giants.
Crucially, we even began to see some of the oil and energy majors get in on the act. DONG Energy changed its name to Ørsted, because the ONG stood for oil and gas and it didn’t want to do that anymore. Shell opened its first electric vehicle charging stations and BP returned to the solar market. Only this week BHP Billiton said it was preparing to quit the World Coal Association over a stance on climate change the mining giant regarded as less than constructive.
These corporate trends formed a virtuous circle with similarly encouraging technological trends. Records for renewables costs and output were toppled. In the UK, the first day without coal power since the Industrial Revolution was recorded. The offshore wind industry delivered a previously unimaginable feat of engineering and economics, declaring it had halved the cost of the power it could deliver inside four years. Solar, wind, and energy storage costs kept falling and smart grid functionality continued to improve, making renewables the default option for new generation projects in a growing number of countries, even when grid balancing costs are considered.
In the field of transport, Volvo pledged to end the sale of conventional internal combustion engine cars, as auto giants around the world rushed to electrify their fleets in response to tightening air quality rules and mounting consumer interest. Elon Musk unveiled an electric truck that could conceivably transform global supply chains (and delivered the world’s largest battery storage project inside 100 days for good measure). Progress in green aviation and shipping industry continued to disappoint, but there were signs key players such as Airbus and Rolls Royce are finally starting to take decarbonisation seriously with fresh investments in the development of electric aircraft.
In many countries a third force also contributed to this virtuous circle, as two years on from the Paris Agreement governments began to strengthen the climate policy landscape.
Emmanuel Macron pulled off a shock election victory on a platform that prioritised bold climate action. The Chinese government continued to work on an emissions trading scheme that will dwarf the original European market, and the EU edged forward with plans for a new wave of post-2020 climate goals.
In the UK, an election that saw the ruling Conservative Party lose votes because of the perception it did not care about the environment sparked something of a green policy arms race. Now the talk in Westminster is of a Green Brexit, a plastic pollution crackdown, and an industrial and clean growth strategy centred on clean tech innovation, low carbon infrastructure, and green finance. The policy signals in support of green investment and corporate decarbonisation have never been stronger.
Meanwhile, 2017 has also emphasised how change is afoot amongst the public. Polls show how people under 40 are demanding ever more environmental action from political and business leaders. The lag time between the launch of a campaign – on plastic waste or air quality, for example – and it reaching the critical mass at which companies and governments have to respond is shortening all the time.
Globally, millennials’ frustration with a broken economic system that is degrading the planet and struggling to deliver on its promises is only going to grow. At the same time younger people’s willingness to engage with new business models and emerging value systems that place less emphasis on endless consumption is opening up fascinating new economic possibilities. Culturally, the #MeToo movement has powerfully demonstrated how toxic behaviours that have been tolerated for decades can quickly be called to account once a social tipping point is triggered.
All these trends have not yet added up to a tangible reduction in global emissions, but there are encouraging signs that one day soon they could.
A report from the World Resources Institute this year revealed 49 countries covering around 36 per cent of global emissions have already seen their carbon output peak. Separately, a report from IRENA explored how the national climate action plans put forward under the Paris Agreement are underselling the amount of renewable energy capacity many countries are planning to deploy. There are reasons to think that while we are not yet doing enough to avoid the worst climate change impacts, the proven viability of clean technologies and strengthening market forces mean we might be doing a bit better than we think.
Of course, the problem all these sources of green optimism face can be summed up in one word: politics. Both corporate politics and politics politics.
For every company pursuing a credible decarbonisation strategy there are many more staring at their shoes whenever the subject of climate action is brought up. I had lunch recently with a sustainability executive who admitted the failure to pick the lowest of low hanging fruit remained a source of constant frustration. The example they offered was LED lighting – an established technology that can deliver payback periods of less than two years, millions of pounds in savings, and millions more tonnes of emissions reductions. And yet a combination of chronic short termism, management incompetence, and the failure to prioritise climate action mean thousands of firms are deferring investment in a technology that could save them money.
The political sphere sees much the same phenomenon. Leaving aside the dysfunction of the Trump administration, around the world there are numerous well-meaning political leaders who are happy embracing climate action, but only up to the point where they face even the smallest amount of pushback from the media or vested interests.
This year the UK government unveiled a welcome and ambitious Clean Growth Strategy, but it was hamstrung by the failure to properly fund new energy efficiency programmes and the inability of the government to face down the handful of vocal media critics who loathe onshore wind and solar farms. Only this week the government put forward a diluted plan to improve the efficiency of the coldest private rental properties, weakening its emissions-saving ambition in order to keep landlords happy. Some days it feels like Theresa May might as well have done with it and just give Paul Dacre a seat at the cabinet table.
But if green business optimism has been tested in 2017 it has remained intact, and not just for professional and psychological reasons.
The chasm between the best and the worst of the past year is itself a source of hope, as well as fear. The hope is that while the forces of reactionary nationalism may be enjoying a good run they are at the same time fuelling a backlash, which, when it comes, will usher in a whole new era of progressive economics and values.
It is too early to say for sure, but it is possible the rise of Trumpism represents a final noxious belch for an entitled pollutocrat class of toxic masculinity that has dangerously stirred up a hornets’ nest of populist nationalism in order to defend its unsustainable interests. If this movement was to collapse under its own contradictions and corruptions, and a peaceful pushback could be engineered, then climate action and the green businesses that are driving it are perfectly positioned to build a new economic model that both tackles the environmental crisis and addresses the social challenges that gave rise to the new populists in the first place.
As 2017 draws to a close it is hard to tell whether we are approaching a turning point from which global climate action will rapidly accelerate, or are treading water as some terrifying political and climatic forces gain momentum.
If global greenhouse gas emissions really are rising again, if Trump’s world view does become normalised, if the bursting of the carbon bubble prompts petro-states to lash out in defence of their diminishing power, then there is no denying the outlook could get bleak, and fast.
But then again, as Bob Dylan once sang, “they say the darkest hour is right before the dawn”. As a New Year awaits the job of green businesses is to nurture their natural optimism, face down their opponents, and redouble efforts to build a genuinely sustainable economy as quickly as possible.
A brighter 2018 is not just possible, it’s essential.
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