More coordinated effort, investment needed to achieve climate goals

Singapore

THE message is clear: the world is making an effort to save the planet, but a lot more work - and a lot more coordination of such efforts is going to be required if climate goals are to be attained.

The United Nations' (UN) Intergovernmental Panel on Climate Change (IPCC) said earlier this month that global greenhouse gas (GHG) emissions need to peak before 2025 at the latest and be reduced by 43 per cent by 2030, if the world hopes to keep global warming to around 1.5 deg C.

This will involve a substantial reduction in fossil-fuel use, widespread electrification, improved energy efficiency, and the use of alternative fuels such as hydrogen.

"It's an unbelievable task," said Nick Nuttall, former communications director and spokesperson for the UN Environment Programme and the United Nations Framework Convention on Climate Change, during a recent discussion he moderated on the IPCC's report.

"But the scientists say we can do it if we want to - it's going to require a lot of systems change, right across every area of society: the way we consume, the way we produce food, the way we construct and manage our buildings, and so on."

A key component of such efforts, Nuttall pointed out, will be the issue of investment. "The IPCC calculated that investment flows need to increase by three times by 2030 to get the world on track to net-zero."

It's an issue which also stood out to Sandeep Biswas, Asia Pacific lead (Energy and Process Industries), and Global lead of Energy (Oil & Gas), at global management consulting firm Kearney. "We need much more capital for solving the climate challenge; public and private finance flows for fossil fuels are still greater than those for climate adaptation and mitigation.

"It is still unclear how this huge transition will be funded, especially in developing countries," he added.

Kelley Kizzier, vice president for Global Climate, at nonprofit advocacy group Environmental Defense Fund, said: "We need tools that drive private-sector finance to developing countries - that's where the majority of emissions will be by the end of this decade."

She believes carbon markets can help: "We know from several reports, including this (IPCC) one, that public finance won't be enough. If we get it right, carbon markets can drive private capital to the countries and sectors that need it most."

She cited the example of the Lowering Emissions by Accelerating Forest finance (Leaf) Coalition, which succeeded last year in mobilising US$1 billion in financing for countries and states committed to protecting forests and reducing deforestation - kicking off the largest-ever public-private effort in this area. But, she stressed, "we need all the tools in the box - as is clear in the Leaf example, companies have to complement, not replace, their efforts to reduce their own supply-chain emissions when they buy carbon credits."

Paul Tan, partner & head of Litigation for Southeast Asia (Cavenagh Law LLP), Clifford Chance Asia, agrees - pointing out that global emissions have still not been significantly reduced, despite the urgent calls for climate change reform. "In fact, emissions have grown 12 per cent since 2010. Although the rate of increase has slowed, from 2.1 per cent in the previous decade to 1.3 per cent this decade (2010-present), this still puts us on track to rising global temperatures."

He believes that, while governments could be more ambitious, groundswell support for polluting companies and industries to reform - potentially through more activist shareholder action - would really change the dynamics.

"Shell's directors are potentially facing personal liability by shareholders, alleging that they had not adequately prepared for a low-carbon economy. Such action, if it became more widespread, could force companies to adopt more ambitious climate-transition plans," Tan said.

Yvonne Zhang, Risk Advisory Climate & Sustainability leader at professional services firm Deloitte Southeast Asia, also believes that comprehensive stakeholder engagement can be the difference between success and failure.

"An equitable transition is only possible with the intentional engagement of stakeholders, and good governance is key to ensuring that mitigation and adaptation efforts are effective and sustained.

"This report calls out the 'light greening' efforts of companies and policymakers as insufficient, as change does not occur out of convenience. Corporates and policymakers need to implement big changes that anticipate the changing models of behaviour, geopolitical uncertainty and business norms. Extensive stakeholder engagement would be a key success factor, to fully explore the synergies and trade-offs, and to ensure that dynamic solutions are not developed with tunnel vision," she added.

Picking up on Zhang's point, Brian Ho - Climate & Sustainability Assurance leader at Deloitte Southeast Asia - noted that the focus on demand-side policies is a new inclusion in the IPCC's reports.

He remarked that the panel's decision to devote a chapter to such policies - that is, those that influence lifestyle and behavioural habits through a combination of socio-cultural, infrastructural and technological changes - marks a significant departure from the usual focus on supply-side policies, which include the need to burn less coal and switching to renewable energy from oil and gas.

Zhang and Ho are also appreciative of the holistic approach taken by the IPCC, with Zhang recognising that emissions reductions have to be accompanied by sociocultural changes and policy-level instruments to be realised.

Ho said there is a critical need for policymakers and governments to make sustainable choices the default, for example, switching to plant-based of low-carbon diets, creating circular economies and sharing economies.

"Such demand-side mitigation measures can result in a 40-70 per cent reduction in GHG emissions by 2050 and, crucially, are 'consistent with improving basic wellbeing for all', creating a world with less waste, and better nutrition and health."

Such issues were recently addressed in a paper, "Habits to save our habitat: Using the psychology of habits to promote sustainability", published in Behavioral Science & Policy journal. The authors noted that eco-friendly behaviours have not grown in tandem with the awareness about climate and environmental issues, and suggested that this is partly due to the difficulty of changing unsustainable habits.

They said governments and businesses can close this gap through interventions that:

1) reduce friction on desirable behaviours, such as having more convenient recycling, and increase friction on undesirable ones, such as having low-speed or traffic-free zones to make driving more difficult;

2) leverage simple action cues at key points of decision, such as giving sustainability kits to new homeowners;

3) deploy strategic, subtle financial incentives and disincentives, such as real-time access to congestion charges and energy consumption in homes.

Ho believes these are areas Singapore could also look into, as it works towards building a fairer, healthier and more sustainable economy and world.

"Singapore has taken a good first step with the Singapore Green Plan 2030 that represents a whole-of-government approach to sustainability. For instance, the raising of carbon tax from 2023-2030, which provides an important regulatory signal to industries.

"However, more effort can be placed on studying what policies would be effective in changing people's lifestyles and behaviours: such as subsidising electric cars and creating more cycling lanes for commuting, or promoting plant-based diets over meat consumption by taxing meat and dairy, as Western countries have done."

He believes that, while this may cost some sectors, such as the meat suppliers, it would be hugely beneficial in lowering public health costs. "There is a need to reframe acting on climate change so that it is not a narrative of cost, but one of extraordinary opportunity and economic growth."

Biswas believes that Asian governments in general could aid such efforts by better communicating the risks associated with climate change and the associated actions to its citizens.

"Most reports - such as the IPCC one - tend to be very technical; there is a need to simplify the narrative so that society at large is able to better understand and then act on the message."

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