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BUSINESS & CLIMATE SUMMIT 2016
News

This article first appeared on The Climate Group website on 29 June 2016, which can be found here.

UK Government Still Committed to Strong, Clean Energy Economy Despite EU Referendum

29 June, 2016

LONDON: Former Prime Minister of Mexico Felipe Calderon, Amber Rudd, MP for Hastings & Rye and Secretary of State for Energy and Climate Change, UK Government, and Antonio Simoes, Chief Executive, HSBC, agree global low carbon growth and a climate resilient future is still within reach despite economic uncertainty – with the UK MP affirming “however we choose to leave the EU, let me be clear: we remain committed to dealing with climate change.”

Opening the second day of the Business & Climate Summit, brought to you by The Climate Group, Felipe Calderón, Former President of Mexico and Chair of the Global Commission on the Economy and Climate, looked firstly to the post-Paris landscape the public and private sector finds itself in. “Now is the time to make real things happen on the ground. Now is the time to get the job done and move from ambition to action.”

Describing the priorities of such action as “the first is to launch economic growth, the second is to deliver on the Sustainable Development Goals and the third is to make progress on the climate action as we agreed in Paris”, Felipe Calderón said the most effective way to tackle all three is sustainable infrastructure. By investing 1% GDP in infrastructure, he said advanced economies will achieve a 1.5% increase in GDP in four years, with even greater growth in developing countries.

LOW CARBON CAPITAL

While the capital exists to kick-start low carbon infrastructure globally, Felipe Calderón underlined several ways supportive policy can unlock private investment, including increasing the budget for innovative research and development, boosting clean energy and putting a price on carbon. “Hundreds of companies are using internal carbon pricing but we need to make it universal”, he explained – because policies that encourage new business models and finance mechanisms will have a positive impact on local regions and cities too. “We have to improve government ability to attract investment and provide a roadmap to shift the trillions we need into the low carbon economy.”

Ending his speech by spotlighting the importance of shifting funds toward lower carbon infrastructure, the former President stated firmly: “Infrastructure will either be the pillar on which we base our development and prosperity, or it will lock us into a high carbon path and therefore will become the gravestone that marks the failure of our civilization. Investing in sustainable infrastructure is not just one potential pathway. It is the only growth story of the future.”

But however it is delivered, Antonio Simoes, Chief Executive, HSBC, said climate action must be implemented urgently, given 2016’s record global temperatures and PPM. “This is a race against time to deliver what we promised in Paris.”

The Chief Executive said the leadership demonstrated at COP21 must be continued, owing to the clear signals it gave to the public and private sector that “we as companies and investors need to move.” But it isn’t just a minority of movers: “Major investors are becoming increasingly active and demanding change in this space. Investors are the ones now demanding sustainability. Large energy companies and high carbon businesses in general are responding by allocating finance to greener and more sustainable operations.”

Antonio Simoes suggested a common standard to help investors quantify the risk and measure an accurate cost of climate. “But to get from niche to mainstream we need policy support.” However, he said that six months on from Paris we are “much closer” to implementing terms than we were in December.

“There is clear willingness on the part of businesses and investors to change and adapt their business models; this is all extremely possible. We now need to manage the transition and move from niche to mainstream.” The CEO concluded: “We at HSBC stand ready to play our role. Together I have no doubt we can unlock those trillions and finance the transition to a low carbon economy.”

BREXIT AND GREEN UK

But with the Summit taking place in London’s Guildhall, the EU referendum was a clear point for discussion and the audience were keen to hear directly from Amber Rudd, MP for Hastings & Rye and Secretary of State for Energy and Climate Change, UK Government. She started: “The decision to leave the EU is of historic significance. To be clear, Britain will leave the EU. The decision of the British people was clear. The key challenge now, as the Prime Minister and the Chancellor have stressed, is to work towards a settlement that is in the best interests of Britain.

“As a Government, we are fully committed to delivering the best outcome for the British people – and that includes delivering the secure, affordable, clean energy our families and business need. That commitment has not changed. Climate change has not been downgraded as a threat. It remains one of the most serious long-term risks to our economic and national security.”

Amber Rudd MP, who led the British diplomats at COP21, pointed out that the nation’s efforts were “central” to delivering the Paris Agreement, and those efforts will not be curbed despite leaving the EU. “The UK will not step back from that international leadership. We must not turn our back on Europe or the world. Our relationships with the United States, China, India, Japan and other European countries will stand us in strong stead as we deliver on the promises made in Paris. At the heart of that commitment is the Climate Change Act.

“So while I think the UK’s role in dealing with a warming planet may have been made harder by the decision last Thursday, our commitment to dealing with it has not gone away. Its success has inspired countries across the world, and its structure [of 5-yearly cycles] inspired a core part of the Paris deal.”

She also added that the UK Government will be announcing the outcome of the 5th Carbon Budget tomorrow.

On the UK’s attractiveness as clean energy market, Amber Rudd MP highlighted that investment in renewables has increased by 42% since 2010, and in 2014, 30% of all of Europe’s renewable energy investment took place in the UK – adding that annual support for renewables is expected to double during the next four years to more than £10 billion.

She concluded: “As the Prime Minister said, we will work towards the best deal possible for Britain. Securing our energy supply, keeping bills low and building a low carbon energy infrastructure: the challenges remain the same. Our commitment also remains the same. As investors and businesses, you can be confident we remain committed to building a secure, affordable low carbon infrastructure fit for the 21st Century.”