Paul Gilding

When we focus on news that reinforces our environmental challenges, of which there’s no shortage, we forget just how exciting the opportunities in fixing them are and how fast these solutions are now accelerating. Every story about melting icecaps or raging floods brings a smarter, cleaner world closer. My favourite example at the moment is electric cars. While they had a bad start, we are now on the verge of the breakthrough we’ve been waiting for, with around 30 models coming into the market from the major car companies and new start-ups over the next 3 years.

If we get this right, it’s hard to overstate the significance of the upside. This is a real game changer for our transport and energy systems. Forget any old ideas you have about niche markets, limited range and slow cars. There are some very exciting cars on the way and some business concepts that could change not just personal transport but the whole electricity sector. How will this unfold?

Imagine for example not charging your car overnight, but pulling into a “battery change station” where a machine simply takes out your battery pack and replaces it with a fully charged one, all in a few minutes, while you go and pick up a coffee. The batteries will have been charged by 100% renewable energy and you will have a contract that guarantees the price you pay, eliminating fears of petrol price rises. That’s the vision now being implemented across a number of countries by the very well funded Better Place and its founder Shai Aggasi as you can read here.

But it gets even better. You could also have a car that plugs into the grid when you’re not driving it. This means when the power is cheap because demand is low you will be able to charge your car and when there is high demand and power is expensive you can sell it back to the grid and make a profit. So your car effectively becomes a power station and you become a mini power company! An additional benefit of this is that the car fleet acts as a giant battery, enabling storage of intermittent renewables like solar PV and wind power.

By the way, they are also dramatically cheaper to run because electricity is so efficient at energy conversion. If you want some more details on the numbers take a look at this excellent summary by Andrew Simpson from Curtin University.

If you’re worried these electric cars will be boring to drive then take a look at Tesla Motors who are producing the Tesla Roadster that will go from 0 – 100kh/h in 4 seconds. Who said greenies don’t know how to have fun!

This is all in addition to the clean cites, no air pollution and countless new jobs created as we build the infrastructure for this transport and energy revolution.

Heard all this before and wondering if its real? Warren Buffet certainly thinks its is. He invested US$230 million in Chinese electric car company BYD in 2008 and his 10% stake is now worth close to $2 billion. China plans to put a million electric cars on the road by 2012 so BYD is looking like delivering on its name for its owners (BYD stands for Build Your Dream!).

As a transition this dramatic takes off in a market, it’s hard to tell where it will head but in any outcome the implications for consumers, business and markets are certainly profound.  Alan Kohler makes an interesting argument in his investment newsletter The Eureka Report as to why all cars will be electric within 20 years. He points out that when people come to believe that the electric car is going to be the clear winner, they will suddenly realise their old petrol car will have close to zero resale value within a few years. At that point there will be a rush to go electric, to avoid the inevitable price collapse in second hand petrol cars. This will of course be self-reinforcing when it takes off.

Of course we can’t be sure which technologies, business models and companies will succeed. What we can now safely accept however is that with so many people and so much money focused on making this work, the time has clearly arrived when the internal combustion engine is heading for a rapid sunset.

Let you mind run over the implications of that for the oil industry and peak oil….

So next time you read about a melting glacier, remember how much fun driving into the future is going to be.

Throughout my 35 years in sustainability it has always seemed odd that while so-called economic rationalism reigned over our political, economic and business worlds, rational thought wasn’t applied to issues like climate change. The risks were always clear, as defined by rational science, while a logical analysis of the economics showed acting early was cheaper than acting late. Yet a strange kind of religious and ideological zealotry took hold, as otherwise sensible, educated people ignored rational thought. It was a failure of reason.

While Copenhagen failed to deliver any agreement however, it may well mark a return to rational thought and with it some profound shifts in markets, politics and our approach to sustainability. Perhaps historians will mark this point and refer to the world BC and AC – Before Copenhagen and After Copenhagen.

What will historians say changed at the end of 2009? And if we could read their conclusions now, would it change our present responses – not as historians but as the creators of that history? Perhaps they will write something like this:

The old world ended at Copenhagen. It was the moment a critical mass of people came to accept that the old way of doing things was finished. They started to prepare for a new world, and for the shift to the war footing that would deliver it.

While Copenhagen failed to deliver action on reducing emissions, it delivered a very clear outcome. It shattered assumptions that had previously framed the debate and so provided an historic shift in the approach to the issue.

For a start it was the end of the debate about the science. Copenhagen marked the victory of reason over ideological and religious zealotry.

The debates continued on the detail and that was of course a healthy part of the process. There is always uncertainty in science and such debates test the strength of assumptions. But After Copenhagen there was a critical mass of powerful and influential people who accepted that despite the uncertainties, it was time to act. They kept debating 1 vs 2 degrees of warming and levels of CO2 at 350 vs 450ppm but they stopped debating the rules of physics and chemistry. They knew if you increase the thickness of the atmosphere’s blanket the world gets warmer. While many remained frustrated at the lack of action despite this acceptance, this was a critical turning point because the mathematics of what accepting the science meant for the economy were profound.

It was also the end of any chance of a measured and careful transition. That moment probably passed in 2000 but it was firmly dead and buried with the lack of an agreement in 2009. With actual emissions reduction now years away, the lags in the climate system dictated that a crisis driven, war like response was now inevitable, even with the high 2 degree target. As a result, assumptions about the pace of change and the process by which it would be delivered were finished. It was clear After Copenhagen that when the change came, the pace would be rapid, the process chaotic and the transformation radical.

This meant the level of national economic and company business risk posed by delay was now much greater than the risk posed by the change itself. As a result, business came on board at Copenhagen, now seriously worried that delay would lead to such rapid change, their companies faced catastrophic commercial risk.

Perhaps the shift of greatest historical significance was that it was now clear the pursuit of global consensus was an illusion. The major powers had played along with the UN process because the complexity of reaching consensus gave them an excuse to avoid action. They could profess support for a global deal, knowing it wouldn’t happen. But once there was a danger of it becoming real, they dropped that idea like a hot potato. There was nothing in history to suggest they were ever going to let large numbers of small, poor countries help determine the rules. As history shows, those with power don’t give it up lightly.

Instead they started the process of forming what was to become the Coalition of the Cooling, a group of powerful nations and their friends who had sufficient economic and political muscle to define the inevitable economic transition. If power was going to shift away from the sole superpower, it was in the interests of both the US and the group of large emerging powers to form a new club to guide the future. With the addition of their various allies, the future could then be negotiated with 10 people in the room. China had arrived.

What those in power missed until much later though was the strength of public concern and as a result the rising influence of civil society. Tens of thousands of advocates had gone to Copenhagen, assuming their intellectual and political contribution would help leaders get the right outcome. They left angry at the failure of world leaders but determined to force change from the bottom up.

The combination of civil society, particularly the youth movement, along with the simple mathematics of climate science, led to what most investors missed completely until it was too late.

After Copenhagen, coal was finished.

It was surprising so many missed this because the data was clear for all to see. Investment in clean energy outstripped investments in fossil fuel energy every year from 2008 on. More importantly, once 2 degrees was accepted as the maximum target, it was all over for coal. There just wasn’t any room in the remaining carbon budget for coal to keep growing. So once the world’s powers decided the science was in, coal was out.

This was the case anyway and would have unfolded over the decades to come, but when civil society decided to give up on the direct political process and focus all of its attention on coal, sentiment shifted quite rapidly.

It was of course technically illogical to focus just on coal, after all it was only 20% of global greenhouse gas emissions. But it was already clear the market would kill off oil, with electric cars and / or peak oil. All the alternative NGO campaign targets were too complex and missed the key ingredients : a powerful enemy that can be demonized, a simple NO campaign and definable physical targets to focus on. The movement had learnt the dangers of diffusion by putting so much into Copenhagen for so little tangible result.

So the group with nothing to lose, the Angry Islanders joined with the youth driven movement Our Climate Our Time and directed its powerful emotional message entirely onto coal.

Campaigns erupted everywhere – targeting every coal mine, every coal company and every coal train and ship. It was a market smart campaign with investors targeted as owners, banks as lenders and coal executives as climate criminals. It took a few years to build momentum but once the US and China jointly announced a ban on new coal plants, the house of cards came tumbling down. The valuation of coal companies collapsed, under the combined weight of public disdain, regulatory threat and shrinking market, with alternative technologies now competing on price. With investors running scared having seen their coal investments drop 75% in value over a month of carnage, the industry went into terminal decline, confined to the margins thereafter.

The litigation against directors and fund managers however, carried on for a decade more. Regulators took action against directors who hadn’t explained the key risks to investors. Shareholders asked why these risks weren’t obvious to directors given the science and why they were misled about the commercial potential of CCS.

So back to the present as we head into 2010.

Who knows how the future will actually unfold, but some parts of the above are clear. The focus on Copenhagen failed to deliver for the global climate movement. It was always going to, as I argued in my last column, but even I didn’t think it would fail quite so spectacularly. So a shift in focus is inevitable for climate campaigners. We don’t know where it will shift to, but we’ll find out in 2010.

The business community are the biggest losers from Copenhagen. Despite their really serious focus and coordinated calls for action leading up to Copenhagen, they now face heightened risk of discontinuous change. The lack of a regulatory result, combined with the political acceptance of the need for even stronger action than before, creates a huge gulf between present reality and the inevitable future. That gap will close at some point and do so suddenly. For companies determining their business strategies this poses massive risk. It makes the coal scenario painted above far from fanciful. Markets are driven by sentiment and sudden sentiment shifts are now inevitable. The challenge is working out where and when they will strike. I’d certainly be nervous if I was a coal executive or investor.

For policy makers it’s back to the drawing board. With no genuine global agreement anytime soon, perhaps they will abandon trading schemes and revert to the much simpler approach of national carbon taxes and bilateral deals, following the trade model. Meanwhile all but the lowest carbon economies now face ever increasing risk from delay. When the global market shift gets momentum, being stranded with high per capita carbon emissions could be competitive disaster for nations that are slow to act.

On personal level, part of the challenge is dealing with despair and frustration. Community activists, corporate leaders, policy makers and scientists have put so much effort into action on climate change, for little result. Sure we’ve seen great progress in understanding and have many new allies on board but negligible action to even delay the now inevitable crisis. The climate responds to emissions not to political accords.

So take a moment to grieve for the lost opportunity, shed a tear like Bill McKibben did and say thanks to all those who have thrown their all at it.

We have led the horse to water but it’s not yet thirsty enough to drink.

But don’t stay there. We don’t have time for despair. We now have to move on to the new world, the one After Copenhagen. So after some Christmas rest and reflection, decide what you’re going to do and get back to work. We have a civilisation to save.

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There will probably be some kind of agreement at Copenhagen. It’s hard to imagine all those world leaders walking away without one. However I’m not spending anytime at all wondering what the result will be. Why? Because it just doesn’t matter.

You see we’re not ready to fix climate change, not yet. We have not accepted the scale of the problem. Nor have we established the political conditions necessary to fix the problem when we do. However Copenhagen does signify the shift between two eras and if you watch carefully you can see the new world emerging. That is the interesting thing happening at Copenhagen.

But before I move on to that, let me go back, because most of you are probably stuck on my statement that the result at Copenhagen doesn’t matter. Isn’t this the most important meeting in history? Surely failure here will set us back a decade? Surely having a global agreement of any type would be an important first step? No, no and no. Here’s why.

Firstly, it was always going to be a failure because the pass mark set in this important test for civilisation is actually at a level that indicates failure. The correct pass mark is simple. We need to deliver a safe climate; a climate in which we can have a reasonable chance of running an economy that can feed, house and clothe 7 – 9 billion people. As my favourite climate strategist Winston Churchill said:

“It is no use saying, ‘We are doing our best.’ You have got to succeed in doing what is necessary.”

The science is very straightforward on what is necessary. The 450ppm CO2 concentration limit, which is the best possible result Copenhagen is aiming for, would give us a 50% chance of not passing 2 degrees of warming. Even reaching 2 degrees would almost certainly see the loss of the Great Barrier Reef, the melting of most of the world’s sea-ice, a number of island countries ceasing to exist and shifts in climate and water supplies that will lead to war, refugees and global food crises. This is all considered to be relatively manageable! The logic of that conclusion aside, what we also know is that going beyond 2 degrees takes us into system breakdown territory and quite possibility into unmanageable consequences. We then risk civilisation’s collapse.

So the best we can possibly hope for in Copenhagen is a target of 450ppm, which gives us a 50% chance of widespread global ecological damage, geopolitical instability and massive human suffering – that would be the good result under that plan. The other 50% chance is of a civilisation-threatening crisis. So 450ppm is failure, pure and simple. And besides the likelihood of a strong global agreement to a 450ppm target is miniscule anyway. We’re not even ready for that level of failure.

Nevertheless, Copenhagen is fascinating because all the ingredients for change are emerging and can be clearly observed. As I argued in the One Degree War paper I wrote with Jorgen Randers, we will soon wake up to what is needed and get to work. Here’s my top 4 trends we’re seeing in Copenhagen that tell us where we’ll go when we are ready.

No one is in charge. The US no longer rules the world. China knows it and Obama knows it. While it remains the world’s dominant military power, you can’t shoot CO2 emissions, making that power useless against this problem. China is on the rise and this week a China/US deal is the likely first step if we’re to have any deal at all.  That however is just the beginning of a massive geopolitical power shift, because China and the US are only 50% of global emissions. We are moving to a world we’re we act together or go down together. There is no alternative that will work and that is a seriously transformational and beneficial shift.

Angry Islanders. Like a scene from the 1976 movie Network, a group of island states is yelling at the world “We’re mad as hell and we’re not going to take it any more”. They’ve woken up to the reality their countries are literally underwater at around 450ppm. They are angry, articulate and thanks to the modern connected world we’re going to hear a lot more from them. This is the world’s conscience and they’re telling us loud and clear “your cars and coal are killing my country.” It’s like an invisible army slowing destroying them, every building, every farm, every business. The significance here is not the islanders but the idea : those who caused the pollution will be held to account by the victims of it. This means global justice is firmly on the table.

The science won, the sceptics lost. Despite the media’s fascination with the scientific debate no-one with any power or sense is questioning the science any more. In the end facts rule and that’s why the Angry Islanders are saying 350ppm is the right target. We should now completely ignore the sceptics and let them whip themselves into a frenzy of self-delusion as they fade into being crazy old men (yes men, how many prominent women sceptics have you heard from?)

A dot com boom on steroids with military support. Winning or losing is a choice and China is now clearly winning the green energy race. The USA is shifting on climate because they know they’re losing and they hate that. India is chasing China’s tail and South Korea and many others are closing in. This will be an exciting time as governments increasingly panic about the targets they have agreed to and act to mobilise the market like never before. HSBC says this will be a $2 trillion per annum market by 2020.

So whether we get a political agreement in Copenhagen or not just doesn’t matter. But if you want to see the future then take good look for a taste of what’s to come. You see we will, certainly and inevitably, wake up. Not yet, but soon. Then the fun really begins.

Amidst the noise of the day-to-day debates, we have lost sight of the simple logic of the advice coming from the world’s top climate scientists. Despite the uncertainties in the details, the science carries one underlying message from which we can draw only one rational conclusion.

It is time to declare a global emergency and mobilise all available resources, political will and human ingenuity towards one task – to reduce the risk of catastrophic climate change to an acceptable level.

Today, we are releasing a paper detailing our response to this conclusion. ‘The One Degree War Plan’ began to take form a few years ago, the product of a challenging conversation between myself and Professor Jorgen Randers. Jorgen, a lifelong advocate for action on sustainability, rose to prominence in 1972 as one of the original authors of the Club of Rome’s famous “Limits to Growth”, the bestselling environmental book of all time – over 30 million copies in 37 different languages.

Jorgen and I had both accepted the scientific reality and were discussing the question it posed – what would a rational response to the climate science look like? If you stripped away all the politics and debate and took a fresh look, what would be the logical action plan?

In 2008, after many more such conversations, we decided that we needed to articulate our answer to that question, in detail and on paper.

We started by considering what the science meant, in human terms.  This was the simple part, as the peer-reviewed climate science is very clear on the level of risk. There is a high degree of certainty that humanity will face severe disruption to the global economy and society, with widespread economic damage, geopolitical instability and human suffering. Perhaps more importantly, there is a lower but still material risk of catastrophic collapse and tipping points being past that would see the effective collapse of our current civilisation and economy. Once this was understood, we could begin to consider what a logical response to this level of risk would be.

But before we got there, we made another initial but fundamental conclusion: that the momentum in the climate system is now so great that the world will, before long, wake up to a threat of this magnitude. It will recognise that despite the remaining uncertainties, we cannot afford to risk the collapse of the global economy and civilisation. Thus an appropriate response – one that recognises the science and the true scale of the risk – will occur.

When this emergency response is designed, we concluded it would need to aim to bring warming below 1 degree, and therefore, CO2e concentrations below 350ppm. Anything less would leave civilisation at too great a risk of catastrophe, and would therefore be irrational. Our remaining task was then to develop a plan of action that was capable of achieving this outcome.

The attached paper is the result. It has taken over a year of development and research, including considerable feedback from colleagues and modelling by C-Roads, the climate simulator developed by MIT, the Sustainability Institute and Ventana Systems.

We were actually surprised by the outcome of our work, which showed that not only is One Degree and 350ppm possible, it is surprisingly achievable and practical. It certainly requires that we act very soon and that we act with a level of determination and commitment not seen since WWII, but it can be achieved. In recognition of this comparison, we called our paper The One Degree War Plan.  It is a plan that shows what humanity can achieve – and we believe will achieve – when it develops a rational response to the climate threat.

We are releasing our paper for public reaction and comment, because we recognise that this is not an intellectual exercise. A response like the One Degree War Plan, if it is to be implemented, is going to require years of development by global experts across many disciplines. It will also require strong public support globally if our political leaders are to have the courage to adopt such an approach.  This in turn will only happen if many millions of people engage and decide that, in the end, we are a rational species and this is the way forward we consciously choose to take.

Building a robust plan and the support to implement it is of course an enormous task. So we think now is a good time to start.

We encourage you to consider this paper, to circulate it amongst your networks and to help us together build the courage we need to face reality.

Click here to download the full paper

Regular readers may be a little surprised by this column. I am regularly arguing that the science shows we are inevitably approaching, or may have past, a tipping point where widespread, rolling ecological and economic crises take hold.

But there’s another critical tipping point, of a very different character – where the world’s political and business leaders turn firmly towards action. Here’s the surprise – I think we may be at this tipping point already.

Scientists have become increasingly alarmed in recent years, as climate change reality has raced ahead of the political response. They point to countless examples of accelerating feedbacks, such as the reduction in the ocean’s ability to absorb CO2 and rapid Arctic melting.

While they regularly point these out to our political masters, many of them express despair at the slow response.

So on what basis do I think the global political system has started to turn?

I think we have recently seen a number of developments that, taken together, indicate a profound shift is under way. When such a shift takes hold, it will rapidly accelerate – with significant implications for campaign and business strategy in this area over the years ahead.

The most significant and encouraging shift is what Tom Friedman in his recent NYT column called the shift from Red China to Green China. The Chinese leadership has for many years been talking about the need to act on climate but has in recent months shown serious potential to lead on this issue.

The rationale for them to do so is certainly there. As they have reeled under the negative economic and social impacts of pollution, China has accepted that the growth model followed by Western capitalism cannot work for them. Will they now pursue clean energy so vigorously they will dominate this new global market? Could climate even provide the issue on which China can manifest its global leadership ambitions?

I increasingly think the answer to both questions is likely to be yes, with far reaching economic and geopolitical implications. There is a good summary of recent developments and this potential for leadership, including China’s potential to see its emissions peak by 2030 in the article “Peaking Duck” by the Centre for American Progress’ Julian L. Wong.

Another important indicator is the recognition in the US political debate that the strength of the Chinese response is an economic threat to the US. The fear is growing that the resistance to change in the US may leave that economy floundering in what will be the largest economic transformation in history. As argued by Tom Friedman in the column referred to earlier, while America is currently strong on innovation, research ultimately follows the market. Friedman pointed out that “America’s premier solar equipment maker, Applied Materials, is about to open the world’s largest privately funded solar research facility — in Xian, China.”

The goal posts are also shifting in the science. An increasing number of scientists are coming to the view that the global CO2 target should be closer to 350ppm rather than 450ppm. In recent months we’ve seen this get global credence in response to the 350.org campaign, with eminent figures like the climate economist Nicholas Stern and the IPCC Chair Pachauri coming out in personal support of the 350 target. They would both be well aware that such a target would require cuts far more dramatic than anything on the table now.  With such a goal, the task becomes the elimination of net CO2 emissions from the economy rather than their reduction.

At a deeper level, Stern also lent his considerable intellectual weight to the debate on economic growth, stating what was previously heresy – that economic growth itself must now be questioned. He recently put the case that there were probably only 20 years left for further economic growth before the earth was full.

Equally important as these scientific and political developments are shifts in the business community. While debates are raging in Western economies including in the US, Japan and Australia on climate policy, there are signs of a profound underlying shift emerging in corporate attitudes. Symbolising this in the United States is the rapid withdrawal of major companies from the US Chamber of Commerce over their lobbying against action to regulate greenhouse gases. In recent weeks, major corporates such as PG&E and Apple have resigned, Nike has quit the Board of the organisation and GE and Johnson & Johnson have both publicly distanced themselves from the Chamber’s anti-climate action lobbying efforts.

Another example was a recent initiative by Cambridge Program for Sustainability Leadership’s Corporate Leaders Group, with 500 companies signing on to the Copenhagen Communiqué which endorsed strong action on climate by the world’s governments including keeping warning below 2 degrees and urging early action. “There is nothing to be gained by delay”, the communiqué states.

Many other countries previously in the background on the global climate debate like Indonesia (which is the world’s 3^rd largest net emitter due to its extensive deforestation) recently announced its intention to cut emissions by 26% by 2020 compared to Business As Usual and by 41% if they get international financial support to go further. They also believe they can turn their forests into a net carbon sink by 2030.

And of course there is a storm of grassroots campaigning erupting around the world in the lead up to Copenhagen with campaigns like 350.org and many others.

Many of you will have the correct response that these are all only words – that we are yet to see action of real substance. That’s certainly true. Words are early signs, not conclusive evidence. But I think I can smell it now, and when these things do turn, they do so remarkably quickly – as we saw when governments responded to the recent financial crisis.

Of course this does not mean we can relax and it will all be OK! The climate system is now rapidly descending into crisis and the consequences will be felt for decades even with strong action now. What it does indicate however is that we will not be the proverbial boiling frogs who just sit here passively as the system collapses around us. It is only early signs of the turn, but it gives us an indication of what’s coming.

So we mustn’t back off, not even a little bit, with the pressure being applied to the system to encourage change. But we should perhaps reconsider tactics.

I think some of our energy should be focused for example on developing an emergency plan to fix the climate. The science clearly lays out what a stable climate looks like and it requires the elimination of net CO2 emissions from the economy within decades. Any rational analysis says this is going to require the equivalent of a war plan to achieve it. In future columns I’ll be saying a great deal more on that topic.

But for now, take a look around. The world is turning our way and while the crisis is still coming, the crisis response may not be as far behind it as we thought.