LOCATION The Hong Kong University

SPEAKER Andrew Seaton, British Consul-General

EVENT Send-off Dinner of the Intensified Learning Opportunity Programme (ILOP)

DATE 27/05/2009

I am grateful for this opportunity to meet members of the Intensified Learning Opportunity Programme (ILOP).  I was looking at the prospectus for the programme and read that ILOP is “designed for students who aspire to and are committed to becoming visionary, responsible and responsive global citizens with strong integrity and commitment to society and life.”

An ambitious objective.  And an extremely worthwhile objective.  I warmly congratulate all the students on the programme and all those involved in making it such a success.

Globalisation is a word that has achieved enormous prominence over the past ten years.  At the moment it could be argued that we are seeing some of the downsides of globalisation with the very clear demonstration of the connectedness of all our economies.

In some respects this is not a new idea.  The 17th century English poet, John Donne wrote of the idea that all mankind is interconnected when he wrote “no man is an island, entire of itself, every man is a piece of the continent”.

But clearly developments over the last few decades have given this idea of globally interconnectedness – globalisation - a much greater sense of immediacy and reality.

Globalisation is not just about companies competing in an open seamless world.  Increasingly it will be about individuals competing globally as employers are increasingly able to look to an international talent pool.

The programme you are undertaking and the overseas placements you are about to embark on this summer will be enormously valuable in equipping you to compete internationally.

But of course the programme is not just about personal development.  It is also about global citizenship and global goals such as equality, justice, democracy and sustainable development.

This last point brings me to the main theme of my remarks. Because if there is one issue which is facing the global community and which is by definition the most global of issues, it is that of climate change.

It is particularly appropriate to be discussing climate change with a university – and university student-audience. As the British Prime Minister said: “the climate change crisis is the product of many generations, but overcoming it must be the great project of this generation. Young people around the world will take forward this debate in the following critical decades.”

The Debate

I will start with some quotes from different sides of the debate.  In the UK, Lord Lawson, the former Chancellor of the Exchequer, has written of: “The new religion of global warming – the Da Vinci Code of environmentalism.  It is a great story and a best-seller. It contains a grain of truth, and a mountain of nonsense.”

And in lighter vein there is the Bob Hope quote: “ I do not like all this fresh air.  I am from Los Angeles.  I don’t trust air I can’t see.”  

But there are voices on the other side of the debate too, arguing that we are underestimating the scale of the problems, and overestimating our ability to do anything about them.  Prominent amongst these is James Lovelock who describes the current efforts to stabilise the world’s carbon dioxide and temperature rise as “self-deluding nonsense”. He has been quoted in The Guardian that 80% of humans will perish by 2100.

A Climate Change Consensus?

But there is, despite this, an emerging scientific consensus.

For example, the Chinese Academy of Science (CAS) and the Royal Society in Britain have signed a statement on the global response to climate change. It states that “there is now strong evidence that significant global warming is occurring”.  Virtually every other major national science academy, has expressed the same or similar views. The American Association for the Advancement of Science has stated that "The scientific evidence is clear. Global climate change is caused by human activities...and it is a growing threat to society."

The consensus is that we are seeing a rise in global temperatures; that this is caused by the unprecedented rise in carbon dioxide in the atmosphere we are currently experiencing; and that this rise in carbon dioxide is not part of a natural cycle but is driven by human activity, in particular by our burning of fossil fuels.

Of course in one sense what we are witnessing is the result of an enormously positive story.  Part of the increase in emissions is driven by a very rapidly rising population: from 1800 to 1900 the world’s population grew from 1 billion to 1.6 billion.  But in the next century, from 1900-2000, the population grew four times to six billion.  Estimates are that it will increase to around nine billion by the middle of this century.  And this growth has reflected massively beneficial, economic development and prosperity.  But we now need to deal with the consequences.

The question is, can the rise in temperatures be stabilised? At what level? How?

The point at which warming becomes dangerous is not certain.  But the current consensus is that a 2ºC increase in temperature is the limit we can safely tolerate. How do we achieve this?  It would require stabilising the amount of carbon dioxide in the atmosphere at between 450-490 parts per million (we are currently at around 380).  And to achieve that target would require that by 2050 we need to reduce global emissions of carbon by between 50% and 85% of the year 2000 level.  

And what might happen if we do not do this?  Scientists believe there is a 50% chance that the earth could face a 5ºC rise in average temperatures by 2050.  That may not sound much.  But we are not talking here about the difference between Hong Kong and London or between Shenzhen and Harbin.  It would be transformational.  It is the difference between the modern climate and the ice age.  

There would be an increase in extreme weather events, floods, droughts, hurricanes; there could be melting of the polar ice sheets, causing sea levels to rise. This would endanger millions of people living in coastal regions. But in parallel many people in other regions will face water shortages.  One estimate suggests that more than a billion people would suffer water shortages in the 2080s.  There would be a rising number of people at risk from hunger, with entire regions experiencing major declines in crop yields. Many animal and plant species would face extinction.

And Hong Kong would not be spared. Within 25 years, the sea level along the coast of Guangdong Province is expected to rise by 30 cm.

Climate Change as a Global Security Issue

But there is also growing recognition that climate change represents not just an environment threat, but a fundamental threat to our security: a threat to our food supplies, contributing to regional and local conflict driven by competition for resources – whether energy, water or food.

Is it really remote to think of countries fighting not about politics but about water?  Or people fleeing not political persecution but environmental catastrophe?

To help avert this, what this requires is a fundamental transition from a global economy dependent on coal, oil and gas, to a low-carbon economy. This will not be easy…

The Economics of Climate Change

Nor will it be cheap.  But it will be cheaper than not tackling it.

Eminent economist Lord Nick Stern estimates that the cost of unchecked climate change - the ‘doing nothing’ option - would costs the world up to 20% of GDP.  To put it another way, the world becomes a fifth poorer. But he estimates that if we do tackle climate change now, the costs of doing so will be much lower; in the region of 1-2%.

His key message is that the costs of action are far less than the costs of delay; that we cannot afford not to act; and so the earlier we act, the easier and less expensive our task is.

2009

This is a crucial year in this process.

First as the Kyoto Protocol comes to an end in 2012 we need a new global framework for tackling climate change.

Nations are meeting in Copenhagen this December to try to agree a new successor global deal, to reduce global emissions of carbon.

The UK has committed to reducing its greenhouse gas emissions by (potentially) up to 80% by 2050.

In that context, the second crucial change this year has got to be President Obama. He has revolutionized US policy on climate change. This means other countries can’t hide behind America any more.

Thirdly, this year we are seeing the full impact of the global economic crisis.  

So how can we tackle the economic crisis and climate change? One way is to ensure that our national stimulus plans are “green”. A low-carbon recovery.  And we are seeing evidence of this.

The Climate Change Opportunity

In the US, President Obama has pledged to create five million new jobs by investing $150bn over the next 10 years to build a clean energy future. Japan has a goal of increasing green business to $1tn by 2015, with an increase of over 600,000 new jobs.

China is doing this too: in its stimulus plan announced last November, 350bn RMB out of the total 4 trillion RMB was allocated to the ecological and environmental improvements.

This shows that it is important not to just look at the costs of climate change. But also at the opportunities. Globally, it is estimated that environmental industries- will be worth $700 billion by 2010.  That is equal to the size of the global aerospace industry.

A few examples

• Between 2008-2012 global use of wind power is forecast to grow by nearly 400%.
• Over the same period the use of solar power is set to double.
• In the vehicle industry, the use of hybrid and other energy-efficient technologies is a major area of competition between the car companies and their supply chains.
• London is already a global hub for carbon trading; in 2007 nearly 60% of credits from the Kyoto Mechanisms were bought by UK buyers. Already in the UK there are some 400,000 jobs in low-carbon industries.  So, alongside blue collar jobs and white collar jobs, we are now talking about green collar jobs.

China

More widely, China is one of the keys to a successful global outcome on climate change.  It is potentially the economic success story of the 21st century.  It has had record GDP growth for the last 30 years.  But against what backdrop?  It is dependent on coal for 70% of its energy consumption.  It has the 20 most polluted cities in the world. It is now the world’s largest emitter of carbon above the US.

But China has introduced many important climate change mitigation policies. These include policies to make China more energy efficient, including through greater use of renewable and nuclear energy.

They are improving the energy efficiency in the country’s 1000 largest energy consuming enterprises.

China is increasing the proportion of renewable energy to 15% by 2020. It will also increase the use of nuclear energy and natural gas, aiming to quadruple installed nuclear capacity by 2020.

The UK is working closely with China on climate change. Through our UK-China partnership on climate change, we have been collaborating with China on all aspects of mitigation and adaptation.  As an example, we are working with the European Commission on a demonstration carbon capture and storage coal-fired power project in China.

Hong Kong

What does this all mean for Hong Kong?  As you can see, the switch to a low carbon economy presents great economic and business opportunities. Hong Kong can lead this part of the world in demonstrating the feasibility and opportunities of low carbon growth.

The government recognises this too. In his Policy Address in October, the Chief Executive, Donald Tsang spoke of Hong Kong promoting a low carbon economy.  In the recent budget the Financial Secretary, John Tsang, allocated millions of dollars to improving energy efficiency in government buildings, carbon audits and developing infrastructure for electric cars.  

As a financial centre it can also take advantage of investment opportunities in carbon trading, in financing new clean technologies, such as carbon capture and storage and renewables.

Hong Kong has always been about embracing innovation.  Now there is a major new area of business opportunity developing in this low carbon area.

To conclude,

Low Carbon Transformation

The international discussions are setting the framework for a major economic transformation in the coming decades: the move to a low carbon economy.  2009 will be a crucial year in the process. This is a transformation which would take the carbon emissions out of the global energy sector by 2050.

This is not incremental or marginal change. It is profound and transformational change in our economies, and radical change in our homes.  Potentially on the scale of the IT revolution of the 80/90s.

So what would this low carbon economy actually look like? It means no use of coal or gas without carbon capture and storage. It means widespread use of renewable energy, probably greater use of nuclear energy.  It means much more effective action on deforestation (which accounts for 20% of global carbon emissions). It means energy efficient technologies.  In our factories, offices, homes.  And in our universities and schools. It means zero-carbon cars, trains and planes.

We must not underestimate the scale and urgency of the challenge. But neither should we underestimate our ability to transform.

Also it needs enthusiasm, commitment and a sense of global citizenship.  Qualities that are at the heart of the ILOP programme.  

So as you take up your internship this summer, as part of your development as global citizens, and then when you return to Hong Kong, I hope that this challenge will be firmly on your agenda.

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