Tackling climate change in a time of crisis
Speech by Commissioner Hedegaard
Harvard University, 3 March 2013
Good afternoon and thank you for inviting me. What an amazing programme!
The last time I was here at Harvard, politicians in this country could not - or did not - use the "dirty word" climate. Now the situation has changed. Climate played a prominent role in both the President's Inauguration Speech and State of the Union address. And recent media coverage also shows that, indeed, the Times They are a-Changin'.
And for good reasons. You’ve had the hottest year on record by a full degree Fahrenheit, the worst drought since the 1930s, and of course Hurricane Sandy, the second most costly storm in US history.
In fact, the past two years have seen no fewer than 25 extreme weather events here that have each caused a billion dollars or more in damage, according to the National Oceanic and Atmospheric Administration.
These events are part of a pattern of more frequent and more severe extreme weather worldwide.
What we see fits with the scientific community’s projections of what a warming world will be like - except that their projections are actually becoming reality even faster than they themselves expected.
As President Obama has said, we can either believe that these events were just a coincidence, or we can choose to believe in the overwhelming judgment of science and act before it’s too late.
The European Union is firmly in the latter camp. We base ourselves on the scientific consensus - and that in turn demands urgent action to prevent climate change reaching dangerous levels.
Because, despite what some television news channels and radio talkshow hosts want people to believe, there really is no serious split among climatologists. Survey after survey has found that the massive majority of climate experts consider that climate change is real and is caused by greenhouse gas emissions from human activities.
If you consulted ten mechanics, and eight or nine of them said your car wasn't safe to drive, wouldn't you take their advice? I would.
So it is frankly hard to comprehend why there are apparently still many politicians here who choose to ignore the scientific consensus and block action. A consensus to which this country's own scientists have made crucial contributions, by the way.
So: Global warming is a fact. Each of the past three decades has been warmer than the previous one. The global temperature has been higher than the 20th century average every year since as far back as 1976. Of the 14 warmest years on record since 1880, 12 have been since the year 2000.
Therefore: to prevent dangerous climate change, the international community has agreed we must keep warming below 2° Celsius, or 3.6° Fahrenheit. This is technically feasible and it is economically affordable. But the window of opportunity is closing fast. The longer we delay the more expensive and difficult it will become.
The International Energy Agency has repeatedly warned that, without much stronger action, we are in danger of locking ourselves into a high-carbon energy system that will make it impossible to stay below two degrees. A raft of recent studies, for instance from the World Bank, shows beyond any doubts that the current level of global action is not enough to prevent warming of at least three or four degrees over the coming decades.
Even with an average global temperature of around 0.8°C higher than the level in pre-industrial times, we are already seeing adverse impacts of the kind I have just mentioned. And these will become more severe the higher the temperature rises.
This is why stronger national action, as well as an ambitious international agreement with all major economies on board, is so necessary and so urgent.
In the European Union we have succeeded in cutting our greenhouse gas emissions by almost 18% from 1990 levels while at the same time increasing our GDP by 48%.
The economic crisis has of course contributed to this reduction, but emissions were already on a clear downward path before that.
We have achieved this by putting in place a raft of policy measures like our cap-and-trade system, improvements in energy efficiency, increases in renewable energy and restrictions on fluorinated gases, standards for appliances, cars, building codes etc. Not because Europeans love regulations more than Americans, but because there is a recognition that as much as you need the market to deliver cost-efficient solutions, you can't leave long-term problems like climate change to be solved by the free market alone.
The market tends to look for short term gains. That is okay. But it typically gives no value to protecting public goods like a stable climate or a healthy environment. That's where we need politics and politicians that dare to think also for the long term.
This is what I call responsible capitalism. Governments must govern when it's required. And I speak not as one of those "European socialists" but as a politician from the centre-right of the spectrum.
I've seen what strong policy action can achieve in my own country, Denmark.
At the time of the OPEC oil embargo in the early 1970s we imported 99% of our oil. It was an expensive lesson in the risks of being dependent on others for our energy supplies – and we have learned from it.
Energy independence became the goal of successive governments and we introduced a whole battery of regulatory measures to achieve it. Innovative companies responded by providing solutions and Denmark rapidly became a pioneer in wind power. Our policy goals drove the development of a world-class industry.
Today over 40% of our electricity is generated from renewable sources, and just over 30% from wind. Danish firms account for a quarter of wind turbine sales worldwide. We are 100 % self-sufficient in energy supply and energy technology accounts for 11% of our total exports.
The U.S. is also reducing emissions – you are more than half way to reaching a 17% reduction compared to 2005. That is good, although it only amounts to around 7% if we measure from the internationally acknowledged 1990 baseline.
Shale gas accounts for a substantial part of this reduction and as a bridging technology, shale gas is okay. But the key question for the new administration must be: What's next? The EU is considering targets for 2030 - and, no, that is not because we don't have anything else to think of in Brussels!
It is because this is about our future economy. Where will our jobs and growth come from? How to bring down energy costs? The cheapest energy is the one we don't use. And energy efficiency means local jobs. As resource prices continue to climb, renewables and resource efficient technologies will no doubt see growing demand worldwide.
Should WE keep a competitive edge here – or should we give it away? This was the exact point the President made in the State of the Union: China does it, and so must we. Or we will lose out on this opportunity. We must force ourselves to innovate.
And the pressure on resources will continue to increase: According to the UN, we will need 50% more food, 45% more energy and 30% more water by 2030. Who will provide the solutions?
And investing in innovation in this field works. You can see it in a number of American States. And we can see it in our statistics: In the space of just five years, Europe’s renewables sector is estimated to have created more than 300,000 jobs. By the end of the decade the net gain is expected to be around 410,000. And our goal of improving energy efficiency by 20% is forecast to create 400,000 additional jobs in that sector too in the next few years. Despite the economic crisis this sector has proved resilient.
But tackling climate change costs, some argue. Yes, but so does continuing business as usual! In Davos, the head of the IMF Christine Lagarde, President Kim of the World Bank and Angel Gurria from the OECD – three of the world's absolute economic leaders – made this argument more forcefully than I have heard in a long time. And I have to say that I was really amazed to hear that Congress scrapped all posts related to building resilience and preventing future catastrophes after Superstorm Sandy. So you pay for the damage, but not for avoiding the same costs next time!? THAT is short-termism.
Europe has learnt some lessons:
First, it helps to set targets.
Second, we need pricing that more accurately reflects real environmental costs, like carbon pricing, so that our economic choices are sustainable.
Third, we need regulations.
And finally, we need to go 'beyond GDP'. By that I mean we need to supplement GDP with other measures of human progress that give a broader picture of what we are doing to our planet. The "externalities" must be accounted for! There we need to work together.
Mr Chair, President Obama’s renewed commitment to climate action gives me encouragement that Europe and US can work more closely together in tackling climate change. Also internationally. Let me point to three key areas where I believe our efforts should be focused.
First, the global agreement that is to be adopted in 2015.
To be effective, the global deal has to get all major economies on board – This has been a common EU/US priority. Here US leadership is crucial. The world cannot afford to have one of the big players on the side-line. We cannot afford a stalemate between major economies.
Europe and America agree that the ‘firewall’ between developed and developing countries needs to be replaced by a more differentiated system that reflects the world of the 21st century rather than the 20th and each country’s responsibilities and capabilities. Let’s work together to make this happen and to build consensus on other aspects of the global deal.
A good starting point - by the way – is aviation. The EU is of the firm view that anyone who can afford a flight ticket, regardless of whether they come from a developed country or a developing country, can also afford to pay for the pollution. And here the US ought to be on our side.
The second focus for transatlantic cooperation should be finding ways to step up the ambition of emission reductions before the future global agreement enters force in 2020 - through concrete actions.
If we are to have a fair chance of staying below two degrees of warming without excessive cost, global emissions have to peak by the end of this decade at the latest. But current pledges fall well short of being able to deliver this. Much more action is needed.
Europe and the US should work together to achieve this, both under the so-called Durban Platform and by mobilising other fora like the G8, the G20, the Major Economies Forum and the Climate and Clean Air Coalition.
We would welcome more focussed and more consistent US leadership in these processes.
There needs to be a focus on getting pledges from countries that have not made them yet, and on raising those pledges that are already on the table. All of us need to do more. But we also believe one of the most effective ways forward is to work in partnership with those who are ready to take bold steps with us in areas like improving energy efficiency, access to sustainable energy for all, increasing renewable energy, phasing down HFC gases etc.
We are already working closely with the US on HFCs in the Climate and Clean Air Coalition and this is a good start. We’d like to see this cooperation extended to other areas and the ambition level raised to a global scale.
The third key area for cooperation should be phasing out fossil fuel subsidies, as G20 and other leaders have committed to do. It is high time to start making this happen because it will also bring down emissions.
We welcome the US’s recommitment to subsidy reform through the G20. I believe the World Bank and others have provided the ammunition. Now: let's agree to start acting.
Ladies and gentlemen, I first visited your country, as a very young parliamentarian back in 1984, when President Reagan was still in power. First the trip brought me here to Boston and next down to San Antonio in Texas, and I came to love the United States of America with all its diversity. For me it has been strange often to have found US and EU on different sides when it comes to tackling the climate challenge.
I hope that the strong new signals from your President will mean that we'll be able to pull things forward more jointly in the years to come. And remember we can bail out banks, we can bail out states but no one can bail out the planet if we don’t get our act together.