Tag Archives: Governance

Banks put a price on Earth’s life support

EMBARGOED until 0900 GMT on Friday 30 August Clean water, forests and other natural resources are being used unsustainably, so some of the world’s largest banks plan to cut credit for companies which rely on them but fail to value them. LONDON, 30 August – It is not easy to put a value on a forest, a clean river, or unpolluted air, but that is what a group of the world’s biggest banks is attempting to do. They have agreed that the way the present economic system uses and often destroys the environment without paying to do so is not sustainable. The banks are also concerned that some companies are using up natural resources so fast, with no thought for their own future, let alone that of the planet, that they will collapse. They want a way of warning them and ultimately withdrawing their credit unless the companies mend their ways. The 43 financial institutions, including the International Finance Corporation, the private sector arm of the World Bank, are setting up a working party as a consequence of the UN Conference on Sustainable Development in 2012, also known as the Rio+20 summit, when the initial 39 large banks signed a Natural Capital Declaration. The declaration defined natural capital as “the Earth’s natural assets (soil, air, water, flora and fauna), and the ecosystem services resulting from them, which make human life possible.” The document went on to say that the food, fibre, water, health, energy, climate security and other essential services provided by natural capital were worth trillions of dollars a year, but that they were not adequately valued.

Carrot and stick

“Despite being fundamental to our wellbeing, their daily use remains almost undetected within our economic system. Using natural capital in this way is not sustainable”, the declaration says. The bankers went on to acknowledge this was partly their fault because they had no way of valuing this natural capital, nor did they currently recognize the danger to the stability of some companies because of its destruction. They want governments to force companies to disclose their dependence on natural capital and the impact they have on it by disclosures in annual financial reports. They also want penalties for companies not doing so and tax incentives for those who protect natural capital as part of their business.

Mining and fracking
However, the bankers know that in order to value natural capital someone has to work out what it is worth in monetary terms. What value can you place on a hectare of forest for the clean air, rain collecting, carbon sequestration and foodstuffs it provides? Just as important, what is the economic loss if it is destroyed? Industries like mining and fracking are in the front line because their operations are already perceived to damage and use up clean water resources and to cause pollution. The banks involved in the project are not attempting to directly put a value on nature but rather are looking to assess how much they are set to lose by being exposed to clients that are too dependent or having too great an impact on nature, and if necessary withdrawing credit as a result. But all businesses, even the banks that control investments, have an impact on the natural environment, which generally they do not pay for and which does not appear in the accounts. So to turn their heady declaration of a year ago into something more tangible, the bankers have set up a high-powered working party to put a value on the natural world. Liesel Van Ast, project manager for the Natural Capital Declaration, is based at the Global Canopy Programme in Oxford, England. She is working with the UNEP Finance Initiative in Geneva to help the bankers set up a series of committees to implement the declaration.
No illusions

She said: “The bankers need to address how they will account for natural capital, explain to everyone why they need to do it and then tell them how to do it.” At the moment overuse of natural capital is not seen as a business risk, because everyone believes they can get out before the resources run out and the crash occurs. We are hoping to change that attitude and get companies to pay a price for overuse of natural capital.” No one has any illusions that the commitment by bankers to get natural capital accounted for on balance sheets, and then taken into account in the share price, interest on loans and cost of insurance is going to happen quickly. They have set themselves a target of 2020 to get an international system up and running and recognized by all governments signed up to the UN Framework Climate Change Convention. It may be slow and difficult work, but they believe this is vital to prevent the current economic system destroying the planet. – Climate News Network

EMBARGOED until 0900 GMT on Friday 30 August Clean water, forests and other natural resources are being used unsustainably, so some of the world’s largest banks plan to cut credit for companies which rely on them but fail to value them. LONDON, 30 August – It is not easy to put a value on a forest, a clean river, or unpolluted air, but that is what a group of the world’s biggest banks is attempting to do. They have agreed that the way the present economic system uses and often destroys the environment without paying to do so is not sustainable. The banks are also concerned that some companies are using up natural resources so fast, with no thought for their own future, let alone that of the planet, that they will collapse. They want a way of warning them and ultimately withdrawing their credit unless the companies mend their ways. The 43 financial institutions, including the International Finance Corporation, the private sector arm of the World Bank, are setting up a working party as a consequence of the UN Conference on Sustainable Development in 2012, also known as the Rio+20 summit, when the initial 39 large banks signed a Natural Capital Declaration. The declaration defined natural capital as “the Earth’s natural assets (soil, air, water, flora and fauna), and the ecosystem services resulting from them, which make human life possible.” The document went on to say that the food, fibre, water, health, energy, climate security and other essential services provided by natural capital were worth trillions of dollars a year, but that they were not adequately valued.

Carrot and stick

“Despite being fundamental to our wellbeing, their daily use remains almost undetected within our economic system. Using natural capital in this way is not sustainable”, the declaration says. The bankers went on to acknowledge this was partly their fault because they had no way of valuing this natural capital, nor did they currently recognize the danger to the stability of some companies because of its destruction. They want governments to force companies to disclose their dependence on natural capital and the impact they have on it by disclosures in annual financial reports. They also want penalties for companies not doing so and tax incentives for those who protect natural capital as part of their business.

Mining and fracking
However, the bankers know that in order to value natural capital someone has to work out what it is worth in monetary terms. What value can you place on a hectare of forest for the clean air, rain collecting, carbon sequestration and foodstuffs it provides? Just as important, what is the economic loss if it is destroyed? Industries like mining and fracking are in the front line because their operations are already perceived to damage and use up clean water resources and to cause pollution. The banks involved in the project are not attempting to directly put a value on nature but rather are looking to assess how much they are set to lose by being exposed to clients that are too dependent or having too great an impact on nature, and if necessary withdrawing credit as a result. But all businesses, even the banks that control investments, have an impact on the natural environment, which generally they do not pay for and which does not appear in the accounts. So to turn their heady declaration of a year ago into something more tangible, the bankers have set up a high-powered working party to put a value on the natural world. Liesel Van Ast, project manager for the Natural Capital Declaration, is based at the Global Canopy Programme in Oxford, England. She is working with the UNEP Finance Initiative in Geneva to help the bankers set up a series of committees to implement the declaration.
No illusions

She said: “The bankers need to address how they will account for natural capital, explain to everyone why they need to do it and then tell them how to do it.” At the moment overuse of natural capital is not seen as a business risk, because everyone believes they can get out before the resources run out and the crash occurs. We are hoping to change that attitude and get companies to pay a price for overuse of natural capital.” No one has any illusions that the commitment by bankers to get natural capital accounted for on balance sheets, and then taken into account in the share price, interest on loans and cost of insurance is going to happen quickly. They have set themselves a target of 2020 to get an international system up and running and recognized by all governments signed up to the UN Framework Climate Change Convention. It may be slow and difficult work, but they believe this is vital to prevent the current economic system destroying the planet. – Climate News Network

Who will regulate the researchers?

EMBARGOED until 1700 GMT on Thursday 14 March Debate continues over whether geoengineering could prove a practicable way of averting the worst impacts of climate change. If it is to do so, a huge research effort will be needed – and who will regulate that? LONDON, 14 March – Two US academics have raised a problem that might seem exquisitely academic: who governs research into geoengineering? Deliberate geoengineering of the planet’s systems to reduce the hazards of global warming has been tentatively on the global science horizon for more a decade – and there have been small-scale trials. The idea has supporters who argue that since there is no serious likelihood that humans will change their ways to reduce greenhouse gas emissions, so there had better be a Plan B, involving perhaps aerosols in the upper atmosphere to screen out sunlight, or spraying to increase low-level ocean cloud cover. There are opponents who argue that the existence of any Plan B could serve as an excuse for not reducing emissions, and thus be self-defeating. Another lobby asks: yes, but why not at least do research to see if such schemes could work at all? But Edward Parson of the Emmett Center on Climate Change and the Environment at the University of California, Los Angeles and David Keith of the Kennedy School of Government at Harvard University use a policy forum in the journal Science to address a different issue: if geoengineering really did reduce climate change risks faster than any other response, it might also have local effects that cause environmental harm, undermine emissions cuts and even trigger international conflict. “Geoengineering requires competent, prudent and legitimate governance”, they argue. “No such governance now exists beyond normal scientific review processes and national law, so geoengineering outside national territories – from small field research to operational deployment – falls under no international legal control.” They put two questions a governance system would need to address. If “large interventions” need more control than small ones, how is the boundary between large and small to be defined? And can scientific self-regulation control small-scale research – or does government have to step in, and if so, how?

Who will gain?

  Within these straightforward questions is a whole set of legal brainteasers. Could there be a slippery slope that slid from research to deployment? If so, must there be some control over all geoengineering research, all field research, or all ways in which the environment can be perturbed? Or should governance agreements target geoengineering research but not non-geoengineering research – “distinctions that could be hard to enforce and create incentives to avoid oversight by concealing an activity’s purpose”? And then there is another set of arguments: geoengineering would be just research, like any other, and should not need any special scrutiny, say some. But, the authors point out, a 2012 plan to spread 100 tonnes of iron dust over 10,000 square kilometres of ocean west of British Columbia to stimulate plankton growth was funded by indigenous Haida villagers interested in carbon credits and the restoration of a salmon fishery. It violated no international law, and was apparently begun without the knowledge of the Canadian authorities, but it caused a huge political storm. The authors warn: “Such controversies should be expected because the stark tension inherent in geoengineering’s dual prospect – large risk reduction and grave new risks – breeds polarization. “We thus expect both periodic recurrence of adventurers pushing reckless, scientifically weak projects and rejecting any control, and zealous opponents seeking to prohibit the entire domain of activities. As in so many conflicts, the extremes reinforce each other.” But the present deadlock, they point out, poses real threats to sound management of climate risk. Their argument goes far beyond academic niceties. They argue that if states fail to build co-operation and transparency while the stakes are low, the problem could become, during some future climate change crisis, as difficult and fraught as arms control, “or more so.” – Climate News Network

EMBARGOED until 1700 GMT on Thursday 14 March Debate continues over whether geoengineering could prove a practicable way of averting the worst impacts of climate change. If it is to do so, a huge research effort will be needed – and who will regulate that? LONDON, 14 March – Two US academics have raised a problem that might seem exquisitely academic: who governs research into geoengineering? Deliberate geoengineering of the planet’s systems to reduce the hazards of global warming has been tentatively on the global science horizon for more a decade – and there have been small-scale trials. The idea has supporters who argue that since there is no serious likelihood that humans will change their ways to reduce greenhouse gas emissions, so there had better be a Plan B, involving perhaps aerosols in the upper atmosphere to screen out sunlight, or spraying to increase low-level ocean cloud cover. There are opponents who argue that the existence of any Plan B could serve as an excuse for not reducing emissions, and thus be self-defeating. Another lobby asks: yes, but why not at least do research to see if such schemes could work at all? But Edward Parson of the Emmett Center on Climate Change and the Environment at the University of California, Los Angeles and David Keith of the Kennedy School of Government at Harvard University use a policy forum in the journal Science to address a different issue: if geoengineering really did reduce climate change risks faster than any other response, it might also have local effects that cause environmental harm, undermine emissions cuts and even trigger international conflict. “Geoengineering requires competent, prudent and legitimate governance”, they argue. “No such governance now exists beyond normal scientific review processes and national law, so geoengineering outside national territories – from small field research to operational deployment – falls under no international legal control.” They put two questions a governance system would need to address. If “large interventions” need more control than small ones, how is the boundary between large and small to be defined? And can scientific self-regulation control small-scale research – or does government have to step in, and if so, how?

Who will gain?

  Within these straightforward questions is a whole set of legal brainteasers. Could there be a slippery slope that slid from research to deployment? If so, must there be some control over all geoengineering research, all field research, or all ways in which the environment can be perturbed? Or should governance agreements target geoengineering research but not non-geoengineering research – “distinctions that could be hard to enforce and create incentives to avoid oversight by concealing an activity’s purpose”? And then there is another set of arguments: geoengineering would be just research, like any other, and should not need any special scrutiny, say some. But, the authors point out, a 2012 plan to spread 100 tonnes of iron dust over 10,000 square kilometres of ocean west of British Columbia to stimulate plankton growth was funded by indigenous Haida villagers interested in carbon credits and the restoration of a salmon fishery. It violated no international law, and was apparently begun without the knowledge of the Canadian authorities, but it caused a huge political storm. The authors warn: “Such controversies should be expected because the stark tension inherent in geoengineering’s dual prospect – large risk reduction and grave new risks – breeds polarization. “We thus expect both periodic recurrence of adventurers pushing reckless, scientifically weak projects and rejecting any control, and zealous opponents seeking to prohibit the entire domain of activities. As in so many conflicts, the extremes reinforce each other.” But the present deadlock, they point out, poses real threats to sound management of climate risk. Their argument goes far beyond academic niceties. They argue that if states fail to build co-operation and transparency while the stakes are low, the problem could become, during some future climate change crisis, as difficult and fraught as arms control, “or more so.” – Climate News Network

Global energy governance 'needs urgent reform'

EMBARGOED until 0001 GMT on Thursday 24 January
The world badly needs secure energy supplies and a stable climate. But the international mechanisms it has developed to regulate the way energy is exploited and shared belong to another era, analysts say.

LONDON, 24 January – Existing bodies overseeing the global energy sector are inadequate and have failed to adapt to widespread changes in energy supply and demand, says a new report. A shake-up of global energy institutions is urgently needed – and nothing short of a technology revolution is called for in order to tackle the twin challenges of rising energy demand and climate change mitigation.

The report, The Reform of Global Energy Governance, by Neil Hirst at the Grantham Institute for Climate Change at Imperial College, London and Antony Froggatt of the London-based think tank, Chatham House, outlines how the energy market has changed in recent years.

The most developed OECD countries traditionally made up the bulk of world energy demand but now account for less than 45% – a share which is continuing to decline. The developing nations are the new big players on the block.

China is now the world’s largest energy consumer and also its largest CO2 emitter. World oil demand, largely driven by the so-called Bric countries, increased by 24% between 1990 and 2009 and is set to go up by a further 12% by 2025.

These profound and far-reaching changes in the global energy scene are having a big impact not only on the way economies develop but on the climate. Yet the institutions which oversee an energy trade that is worth about $2.3 trillion per year – or 16% of all international trade –  belong to another era.

Different priorities

The main player in global energy governance, the International Energy Agency (IEA), does not even have the Bric countries as members, with institutional rules and structures standing in the way of any change. This, says the report,  is  “a serious problem.”

Profound differences persist between the OPEC countries, who are committed to production quotas, and the IEA countries, who value open energy markets above all else.

The energy scene is increasingly dominated by national oil companies who scramble round the world investing their dollars in energy resources. The oil market has become highly volatile and unstable.

Governments juggle with questions of security and cost of supply, the national and global environment,  economic growth and development, jobs, poverty eradication, import dependency, resource income, technological leadership and diplomatic relations.

“The collective outcome of these decisions determines, to a large extent, the rate and limits of global warming…” says the report.

Meanwhile “the shale gas revolution” that has taken place in the US has already had a significant effect on world energy markets. A “golden age of gas” is already under way.

The report’s authors point out that while gas can contribute positively to climate mitigation where it replaces coal, it’s by no means all good news on the climate front. “For instance, although the substitution of gas for coal in the US has reduced American carbon emissions, it may also be contributing to increased US coal exports and lower international coal prices.”

Avoiding disaster

Both energy provision and climate change are issues that can be addressed only at a global level, says the report.  A revolution not only in the way the energy market is run but in energy technology is needed. Low carbon development strategies have to be found.

“Only through a revolution in energy technology can we meet the increasing demand for energy services without a disastrous increase in energy-related CO2 emissions,” says the report.

“The world has changed, and global energy governance will also need to change to meet the energy policy challenges of today.” – Climate News Network

EMBARGOED until 0001 GMT on Thursday 24 January
The world badly needs secure energy supplies and a stable climate. But the international mechanisms it has developed to regulate the way energy is exploited and shared belong to another era, analysts say.

LONDON, 24 January – Existing bodies overseeing the global energy sector are inadequate and have failed to adapt to widespread changes in energy supply and demand, says a new report. A shake-up of global energy institutions is urgently needed – and nothing short of a technology revolution is called for in order to tackle the twin challenges of rising energy demand and climate change mitigation.

The report, The Reform of Global Energy Governance, by Neil Hirst at the Grantham Institute for Climate Change at Imperial College, London and Antony Froggatt of the London-based think tank, Chatham House, outlines how the energy market has changed in recent years.

The most developed OECD countries traditionally made up the bulk of world energy demand but now account for less than 45% – a share which is continuing to decline. The developing nations are the new big players on the block.

China is now the world’s largest energy consumer and also its largest CO2 emitter. World oil demand, largely driven by the so-called Bric countries, increased by 24% between 1990 and 2009 and is set to go up by a further 12% by 2025.

These profound and far-reaching changes in the global energy scene are having a big impact not only on the way economies develop but on the climate. Yet the institutions which oversee an energy trade that is worth about $2.3 trillion per year – or 16% of all international trade –  belong to another era.

Different priorities

The main player in global energy governance, the International Energy Agency (IEA), does not even have the Bric countries as members, with institutional rules and structures standing in the way of any change. This, says the report,  is  “a serious problem.”

Profound differences persist between the OPEC countries, who are committed to production quotas, and the IEA countries, who value open energy markets above all else.

The energy scene is increasingly dominated by national oil companies who scramble round the world investing their dollars in energy resources. The oil market has become highly volatile and unstable.

Governments juggle with questions of security and cost of supply, the national and global environment,  economic growth and development, jobs, poverty eradication, import dependency, resource income, technological leadership and diplomatic relations.

“The collective outcome of these decisions determines, to a large extent, the rate and limits of global warming…” says the report.

Meanwhile “the shale gas revolution” that has taken place in the US has already had a significant effect on world energy markets. A “golden age of gas” is already under way.

The report’s authors point out that while gas can contribute positively to climate mitigation where it replaces coal, it’s by no means all good news on the climate front. “For instance, although the substitution of gas for coal in the US has reduced American carbon emissions, it may also be contributing to increased US coal exports and lower international coal prices.”

Avoiding disaster

Both energy provision and climate change are issues that can be addressed only at a global level, says the report.  A revolution not only in the way the energy market is run but in energy technology is needed. Low carbon development strategies have to be found.

“Only through a revolution in energy technology can we meet the increasing demand for energy services without a disastrous increase in energy-related CO2 emissions,” says the report.

“The world has changed, and global energy governance will also need to change to meet the energy policy challenges of today.” – Climate News Network

Global energy governance ‘needs urgent reform’

EMBARGOED until 0001 GMT on Thursday 24 January The world badly needs secure energy supplies and a stable climate. But the international mechanisms it has developed to regulate the way energy is exploited and shared belong to another era, analysts say. LONDON, 24 January – Existing bodies overseeing the global energy sector are inadequate and have failed to adapt to widespread changes in energy supply and demand, says a new report. A shake-up of global energy institutions is urgently needed – and nothing short of a technology revolution is called for in order to tackle the twin challenges of rising energy demand and climate change mitigation. The report, The Reform of Global Energy Governance, by Neil Hirst at the Grantham Institute for Climate Change at Imperial College, London and Antony Froggatt of the London-based think tank, Chatham House, outlines how the energy market has changed in recent years. The most developed OECD countries traditionally made up the bulk of world energy demand but now account for less than 45% – a share which is continuing to decline. The developing nations are the new big players on the block. China is now the world’s largest energy consumer and also its largest CO2 emitter. World oil demand, largely driven by the so-called Bric countries, increased by 24% between 1990 and 2009 and is set to go up by a further 12% by 2025. These profound and far-reaching changes in the global energy scene are having a big impact not only on the way economies develop but on the climate. Yet the institutions which oversee an energy trade that is worth about $2.3 trillion per year – or 16% of all international trade –  belong to another era.

Different priorities

The main player in global energy governance, the International Energy Agency (IEA), does not even have the Bric countries as members, with institutional rules and structures standing in the way of any change. This, says the report,  is  “a serious problem.” Profound differences persist between the OPEC countries, who are committed to production quotas, and the IEA countries, who value open energy markets above all else. The energy scene is increasingly dominated by national oil companies who scramble round the world investing their dollars in energy resources. The oil market has become highly volatile and unstable. Governments juggle with questions of security and cost of supply, the national and global environment,  economic growth and development, jobs, poverty eradication, import dependency, resource income, technological leadership and diplomatic relations. “The collective outcome of these decisions determines, to a large extent, the rate and limits of global warming…” says the report. Meanwhile “the shale gas revolution” that has taken place in the US has already had a significant effect on world energy markets. A “golden age of gas” is already under way. The report’s authors point out that while gas can contribute positively to climate mitigation where it replaces coal, it’s by no means all good news on the climate front. “For instance, although the substitution of gas for coal in the US has reduced American carbon emissions, it may also be contributing to increased US coal exports and lower international coal prices.”

Avoiding disaster

Both energy provision and climate change are issues that can be addressed only at a global level, says the report.  A revolution not only in the way the energy market is run but in energy technology is needed. Low carbon development strategies have to be found. “Only through a revolution in energy technology can we meet the increasing demand for energy services without a disastrous increase in energy-related CO2 emissions,” says the report. “The world has changed, and global energy governance will also need to change to meet the energy policy challenges of today.” – Climate News Network

EMBARGOED until 0001 GMT on Thursday 24 January The world badly needs secure energy supplies and a stable climate. But the international mechanisms it has developed to regulate the way energy is exploited and shared belong to another era, analysts say. LONDON, 24 January – Existing bodies overseeing the global energy sector are inadequate and have failed to adapt to widespread changes in energy supply and demand, says a new report. A shake-up of global energy institutions is urgently needed – and nothing short of a technology revolution is called for in order to tackle the twin challenges of rising energy demand and climate change mitigation. The report, The Reform of Global Energy Governance, by Neil Hirst at the Grantham Institute for Climate Change at Imperial College, London and Antony Froggatt of the London-based think tank, Chatham House, outlines how the energy market has changed in recent years. The most developed OECD countries traditionally made up the bulk of world energy demand but now account for less than 45% – a share which is continuing to decline. The developing nations are the new big players on the block. China is now the world’s largest energy consumer and also its largest CO2 emitter. World oil demand, largely driven by the so-called Bric countries, increased by 24% between 1990 and 2009 and is set to go up by a further 12% by 2025. These profound and far-reaching changes in the global energy scene are having a big impact not only on the way economies develop but on the climate. Yet the institutions which oversee an energy trade that is worth about $2.3 trillion per year – or 16% of all international trade –  belong to another era.

Different priorities

The main player in global energy governance, the International Energy Agency (IEA), does not even have the Bric countries as members, with institutional rules and structures standing in the way of any change. This, says the report,  is  “a serious problem.” Profound differences persist between the OPEC countries, who are committed to production quotas, and the IEA countries, who value open energy markets above all else. The energy scene is increasingly dominated by national oil companies who scramble round the world investing their dollars in energy resources. The oil market has become highly volatile and unstable. Governments juggle with questions of security and cost of supply, the national and global environment,  economic growth and development, jobs, poverty eradication, import dependency, resource income, technological leadership and diplomatic relations. “The collective outcome of these decisions determines, to a large extent, the rate and limits of global warming…” says the report. Meanwhile “the shale gas revolution” that has taken place in the US has already had a significant effect on world energy markets. A “golden age of gas” is already under way. The report’s authors point out that while gas can contribute positively to climate mitigation where it replaces coal, it’s by no means all good news on the climate front. “For instance, although the substitution of gas for coal in the US has reduced American carbon emissions, it may also be contributing to increased US coal exports and lower international coal prices.”

Avoiding disaster

Both energy provision and climate change are issues that can be addressed only at a global level, says the report.  A revolution not only in the way the energy market is run but in energy technology is needed. Low carbon development strategies have to be found. “Only through a revolution in energy technology can we meet the increasing demand for energy services without a disastrous increase in energy-related CO2 emissions,” says the report. “The world has changed, and global energy governance will also need to change to meet the energy policy challenges of today.” – Climate News Network