Bjorn Stigson, President of the World Business Council for Sustainable Development, BOAO, Hong Kong, November 20, 2005.
Energy & Asia’s Sustainable Development
Asia needs economic growth to alleviate poverty in the region. This requires more energy. However, the fast growing energy demand represents a crucial challenge for Asia as well as for the global society. We need to significantly invest in and adjust our energy systems to avoid severe long term impacts on our climate and environment, and to maintain security of the energy supply.
So what can we do to address these challenges considering both the inertia of the climate system and the long haul nature of technological change? We see four areas of action.
- Energy efficiency,
- Technology Development,
- Carbon capture and storage and,
- Urban Infrastructure and Transportation
Let me comment briefly on these.
1. Energy efficiency is an obvious win-win proposition for society, for the economy and for the environment. It will be driven by high energy prices, concerns over energy security as well as over climate change. But government regulations also have an important role to stimulate energy efficiency, e.g. via building codes or performance standards on products.
2. In this world where Technology Development for energy is very important I want to note the ironic present situation; that apart from some isolated cases the overall government support to R&D on energy systems has decreased substantially in later years. This is a trend that must be reversed. We need to substantially increase R&D for future energy systems if we are going to manage a transition from the present fossil fuel based system into a more diversified and low carbon energy supply. This should include nuclear power, hydro power and renewables.
3. Carbon Capture and Storage is an important bridge from the present fossil fuel based energy systems, to a low carbon future. This is especially important for Asia as this region is the biggest global user of coal.
4. It is difficult to see how we will cope with the number of challenges for energy supply without taking a fresh look at Urban Infrastructure and Transportation. The WBCSD Mobility Report 2030, launched in July last year, has as a main conclusion that the present way in which we transport goods and services will not be sustainable looking 25 years into the future. There is no silver bullet to solve this problem. Instead it will take actions on many fronts including vehicle and fuel technology. Our Mobility 2030 report pointed to a bigger potential for biofuels than we had earlier anticipated.
Partnerships are needed
No part of society can address these challenges that I have talked about on their own. To succeed, we need new and innovative partnerships between governments, business and other parts of society.
The recent partnerships established on governmental level, such as the Asia – Pacific Partnership for Clean Development and the EU - China Partnership on Climate Change are interesting examples of this.
To enable actions by business we need a global framework of realistic and quantifiable long-term objectives that can guide business actions. In the words of the UK Environment Minister, Elliot Morley, the government approach to frameworks needs to be Long, Loud and Legal.
We live in a carbon-constrained world and in the future carbon emissions will carry a cost in some form that factor into investment calculations. In certain regions, notably the European Union, this is already the case for part of the economy. Market based mechanisms, such as emission trading schemes and the Clean Development Mechanism, have the potential to stimulate industry actions and make it possible to invest where we get the most impact for our money. However the CDM has so far failed to live up to expectations due to too bureaucratic procedures for its implementation.
The WBCSD takes an active role in defining sustainable solutions for our energy future, and we have formed an Energy and Climate Focus Area to tackle these issues and propose solutions. My colleague on this panel, Mr Wang Jiming, is a member of the core team of this Focus Area.
Last year the WBCSD presented our first report on Facts & Trends to 2050 on Energy and Climate report, through which we are trying to make the debate more fact based and less emotional. We are now finalizing a more detailed report to be presented at the COP11 inMontreal next month.
It might be suitable to end with the Chinese proverb “If you do not change direction you will end up where you are going”. And the “Business as usual” scenario is not going to take us to a sustainable energy future.