2014: Welcome to the year of ambition?

As we close 2013, a global deal on climate change is still the answer, says Richard Gledhill.

We may never know if climate change was a factor in this year's storms in the UK, but one thing is for sure: we are currently doing too little, too late to address climate change. If we don't resolve the lack of leadership and ambition soon, we could well be seeing a lot more extreme weather, and even more frightening manifestations of dangerous climate change - water and food scarcity, inundation of coastal cities, pandemics, mass migration and social unrest - by the second half of this century.

December 2015 in Paris has been billed as the watershed moment for climate change, when a global deal will be signed at the 21st Conference of the Parties to the UN Framework Convention on Climate Change. But 2014 is really the critical year for future climate policy and action.

In my final blog as head of climate change at PwC - I'm retiring, from PwC at least - I map the crucial milestones to a global deal in the coming year, and explore what more could be done to ratchet up the level of leadership and ambition in international climate policy.

The body of evidence

The ‘climate’ we talk about in UNFCCC negotiations is not just some weather construct. It’s what underpins our economic, business and consumer outlook.

Lord Stern threw down the gauntlet in 2006, in his influential report on "The Economics of Climate Change". Much of this remains true today. Some of it even understates the challenge. But his apocalyptic view of the future wasn't an easy sell, with much of the world economy on its knees after the financial crisis. So he and others are now trying a different tack - essentially, that low carbon is good, rather than just that high carbon is bad. And for the most part, I buy that.

But the reality is we are already in uncharted territory. In 2013, CO2 levels in the atmosphere passed the 400 ppm mark, certainly the highest level since records began, and probably the highest in the past several million years. And, despite the slowdown in the global economy, CO2 levels are still going up at a frightening rate

Stern's view of a high carbon future was painted in even starker terms by the World Bank in their "Turn down the heat" series, which analysed what a 4 degrees Celsius warmer world might look like. It is not a future I want for my children's children. But on current performance, this is an all too credible scenario.

PwC’s own analysis for the Low Carbon Economy Index  shows that the rate of progress – and ambition - to decarbonise the global economy falls far short of what is needed. Today the reduction required in emissions linked to economic output is an unprecedented 6.0% per annum.  But the five year trend is of only 0.7% per annum, and even during the UK ‘dash for gas’ and the switch to nuclear in France, the annual decarbonisation rates were only 3-4%.

We will have used up the IPCC’s budget for carbon emissions for the rest of the century within 21 years. In practical terms, to now achieve what the IPCC deems the ‘safe’ amounts of carbon in the atmosphere to limit the extreme impacts of climate change would require halving carbon intensity within the next ten years, and reducing it to one-tenth of today’s levels by 2050. By 2100, the global energy system would need to be virtually zero-carbon.

As a NASA scientist described it recently, we are a “society that has inadvertently chosen the double-black diamond run without having learned to ski first.” (Not that skiing will necessarily be feasible, in much of Europe at least, if we don't crack climate change. But that's probably a subject for another blog).

Emissions still coupled to growth

Meanwhile, economists at PwC anticipate that 13 economies will grow faster than China in 2014, and Sub-Saharan Africa will grow faster than global GDP for the 14th year in a row.

According to the same analysis, advanced economies including the US, Australia, Japan, and the EuroZone will “get their mojo back” with an expected contribution of about 40% to global GDP growth and help expand the global economy by 3.5% in 2014.

The concern has to be, that without a global deal, with the mojo, comes more emissions.  We have a largely pedestrian speed of progress on investment in low carbon energy technologies. The result, highlighted by the IEA, is that today's share of fossil fuels in the global mix is the same as it was 25 years ago.  Even with a strong rise in renewables predicted by the agency, that share will only reduce from 82% today to around 75% in 2035.

The climate negotiations  

Seasoned COP-watchers are increasingly frustrated by the lack of ambition in the UNFCCC climate negotiations. Although negotiators delivered some small victories in Warsaw, too much of the talks were still preoccupied with process.  

Of course we expect there will be a deal in Paris. But whether it will be a watershed or just a wash-out is far from certain at this stage in the negotiations.

There is a very real risk that deliberate stalling by some countries and the lack of ambition among others, will drive a 'lowest common denominator', 'path of least resistance' deal, which will do little to shift the trajectory of emissions, or the pathway to dangerous climate change.

Putting wind in the policy makers' sails

This could all change if a quorum of global leaders - leaders of business and civil society as well as politicians - are prepared to stand up and be counted. Which is why 2014 is so important.

The biggest date in the climate calendar is Ban Ki-moon's Climate Summit in September 2014, when world leaders meet in New York to help build consensus for an ambitious global deal. 

Leaders may not want to show their hands on pledges for emission reductions or finance, more than a year ahead of Paris. But they do need to show up, and show leadership. If they do, this could dramatically change the tempo and ambition of the UNFCCC talks.

More immediately there is an important meeting for business leaders and investors, as well as political leaders, at Davos in January. Climate change is back at the top of the agenda at the World Economic Forum, with a whole day dedicated to it at the 2014 meeting. It is great to see this focus, but it can't be just another talking shop. Business leaders and investors need to move beyond their (and my) usual mantra of 'business needs certainty'.

We need to raise the stakes - how about 'Business can't live with a 4 degree world'? But CEOs and investors need to show ambition and leadership too, with their own commitments to action.

Of course their focus is on priorities such as growth, costs, resilience and reputation, not on climate change and IPCC scenarios. But what’s increasingly apparent to many, is that climate change will impact each of these issues.

Beyond these set piece meetings, there is a need to mobilise public opinion behind the climate talks. Not just the short-lived media frenzy we had around Copenhagen, but a clear articulation of how climate change is important for lives and livelihoods, for jobs and growth. And it needs to be an attractive vision – not just the nightmare scenario.

We have seen the power of social media in other political contexts. We need to bring this to bear on climate change, communicating the science, and the political imperative, to a much wider audience. Scientists, the media, business, NGOs and even movie stars and musicians all have a role to play here.

A legacy we can live with?

Earlier this year we celebrated the 50th anniversary of the March on Washington for Jobs and Freedom in  August 1963, and the giant steps in civil rights in the US and elsewhere that followed this watershed moment in social history.

Fifty years from now, how will we view progress in addressing one of this generation's biggest challenges - climate change? Will our  children's children be gearing up for a celebration of a historic global deal on climate that secured the future, safe from the extremes of dangerous climate change? Or will they be asking: "how did they let this happen", as they contemplate the frightening prospect of 4 degrees C warmer world?

In the wash up after the failed COP in Copenhagen, I made a pact with myself. I wanted to see a global deal on climate change before I retired. Well, the time's run out for me at PwC. But a global deal is still the answer. So maybe I'll just have to keep on working a little bit longer....

With my best wishes for a happy (and ambitious) New Year,


Richard Gledhill, led the PwC UK Sustainability & Climate Change team’s work on climate change for more than 10 years. He retired on 31 December 2013 after a 38 year career with the firm.

From 2014, Celine Herweijer will lead PwC UK’s work on climate change and international development, Jon Williams will lead on climate change and the private sector and Jonathan Grant will lead on climate policy and carbon markets.

A shorter version of this blog appears on BusinessGreen.