E3G

The impact of climate change on business

By Tom Burke

This has important implications for business.

Business is the bridge across that gap. Because only the business community can develop and deploy the technologies, products and services that are going to be needed to make the transition to a low carbon economy and thus to resolve the climate dilemma. But business is not going to be able to do it in time and to scale without a supportive public policy context.

On one side of this bridge lies a landscape of risk. On the other side is a vista of opportunity. Policies that are tentative and timid will mean that the business response is driven much more by risk avoidance than by opportunity seeking. Policies that are bold and sustained will tilt the balance towards opportunity rather than risk.

Let me give you just one example, not yet very widely recognised, of the scale of opportunity that making our energy system carbon neutral by 2050 will mean. To achieve that goal we have to take all of the gas out of domestic and commercial heating and cooling. That means a massive opportunity for the makers of electrical appliances. Absolutely staggering opportunity for them. And a massive opportunity for electricity generators because we will become more dependent on electricity. But you don’t have to think very long to work out we are not going to be able to sequester carbon from millions and millions of domestic boilers. We are going to have to find some way of pulling all that together.

The biggest constraint on the private sector investment necessary, and available, to make the rapid transition to a low carbon economy will be a lack of confidence in the willingness and ability of governments to muster the political will to provide the regulatory certainty and counterpart public investment necessary to harness the full potential of business to drive change and innovation.

I think that brings us neatly to the purpose of this meeting in a way. Kevin Rudd referred to this challenge as a moral challenge. And I think he is absolutely right to do so. I was in Cambridge last Sunday night listening to vice-president Gore make exactly the same point. At its heart, this really is a moral challenge. Most people interpret this to mean only that we must all take personal responsibility for our own personal carbon footprint. It certainly does means that. I think it also has a far more profound meaning.

Climate change is a bad problem that is getting worse. For the moment, it remains a manageable problem. But it is now clear that in the very future, it is going to make a transition into an unmanageable problem unless we act decisively. Bad as it is, climate change is a problem that is well within the envelope of our technical and economic competence to solve. If we fail to solve it, it will be because we have failed to muster the political will to apply the knowledge and resources we have to tackling the problem. That would be a moral failure on a scale unmatched in history.

Some people have compared the magnitude and complexity of climate change to the Cold War and argued that we need to mobilise our energies and resources on a similar scale if we are to defeat it. I prefer another reference from history. Winston Churchill, looking at the threat to civilisation posed by Adolf Hitler warned of the gathering storm.

He was talking about a threat that might have affected the lives of millions of people. Climate change is a threat that we know now with great certainty will undermine the prosperity and security of many billions of people. Churchill once remarked that ‘If something be not done, it will do itself, and in a way that pleases no-one’. We will be roundly, and rightly, condemned by our children if we allow the climate to do itself. They will condemn us for our feckless disregard of their future.

Thank you very much.