The first two keynote IPCC reports looked at the causes and the impacts of man-made climate change. The third in the series, published today, looks at mitigation – what we can do to help prevent or alleviate the worst of the damage. This is where abstract notions meet the practical reality of hard choices; for politicians, for businesses, for consumers and for citizens.
Doing nothing is not a realistic policy choice. But nor can we in Western Europe simply lecture the rest of the world on what it can or should do without offering some practical assistance, and without acknowledging the very different starting points of their future economic development.
The plain truth is that Europe and North America are enjoying the fruits of an industrial revolution which took place more than 70 or even 150 years ago. Germany’s economic miracle in the 1950s and Britain’s rapid development in the 1870s came at a huge environmental and social cost.
Heavy pollution, thick chemical fogs and the destruction of natural resources were all direct consequences of rapid economic growth.
At the same time, significant wealth was created. Average living standards increased, as too did life expectancy, health outcomes, education and welfare. Economic growth has done more to alleviate poverty globally than any other policy intervention. Growth brings jobs, security, respect for institutions and the rule of law. It has raised living standards more than could have been imagined even just 30 or 40 years ago.
But many countries do not yet have the living standards that we in Europe and elsewhere take for granted. Basic access to health, education, sanitation and clean water. Grid connectivity and affordable transportation. Electricity for heating or air-conditioning and well-paid secure jobs that bring family security.
We cannot deny fundamental social rights to any people. Nor can we close down our dirty manufacturing industry at home, simply to rebuild it abroad whilst taking credit for reducing our own CO2 emissions. We need to step back and look at these issues from a global perspective.
Today’s IPCC Report is an important contribution to the debate. It draws attention to the global nature of the problem and the responsibilities we all must face up to, even if we don’t immediately recognise it at home. There are cities in India and elsewhere with 4 or 5 million motorcycles and what seem like only 1 million exhaust silencers. Switching to an electric car in Europe may give us each an agreeable ethical glow but will do little or nothing to solve the fundamental problem.
We must offer partnership, share technologies and invest real money. Carbon capture and storage (CCS), sustainable infrastructure and renewable energy must form the core of future economic growth. With Asia’s population set to increase by 650m over the next 25 years, a solution to the problem of global warming must equally require global investment in people and technology.
It is time to lift our eyes to the horizon. Not just to imagine a better world for all of us, but to use our investment capital wisely to make it happen.
This research document is issued by ThomasLloyd Global Asset Management GmbH, Hanauer Landstraße 291b, 60314 Frankfurt am Main. The information contained herein is proprietary and is intended only for use by the recipient and may not be reproduced, distributed or used for any other purposes. This document includes future-oriented statements, which are based on current estimates, forecasts, and expectations. These statements include risks and uncertainties, since many factors affect the estimates, forecasts, and expectations. Actual results and development may therefore vary from the current assumptions. Past performance does not guarantee and is not indicative of future results. There can be no assurances that the countries, the markets, or the sectors will perform as expected. The information contained herein has been compiled to the best of our knowledge, and is subject to change without notice. No liability is accepted for the accuracy of the details at any other time. The information contained herein is not complete and does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any conclusion in our research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. This document is not intended to be, nor should it be construed or used as, an offer to sell or to solicit any offer to invest in any investment vehicle. In no case should these materials be considered as a recommendation to buy respectively, sell securities, futures contracts nor any other form of financial instrument. By receipt of this document, you declare your agreement with the preceding terms.