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Living the Durban Durbar

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CLIMATE CONFERENCE 2011
AP

Here's a funny thing. It was possible to stay perfectly busy at the climate talks without going anywhere near the actual talks. This was not about sitting around gossiping over a cup of coffee, although there seemed to be plenty of that going on. Nor was it about dressing up as a polar bear or a lump of coal and waving placards outside.

There was a bit of that, though not as much as you might expect. Instead, it turned out that the climate talks provided the pretext for a great gathering of academics, business people, NGOs and activists. Between them, they staffed numerous stalls and organised innumerable side-events, on everything from climate justice and human rights, through to financing models for public-private partnerships in renewable energy. All we needed was the King-Emperor, and this could have turned into an imperial durbar. Perhaps we did have a King-Emperor, Lord Nick Stern maybe, or an Empress - Angelina Jolie was in Durban. There you have it: the Durban Durbar.

A great deal could be learned by spending time in the exhibition halls and hotel seminar rooms, some positive and some undoubtedly challenging.

On the positive side, there is a tide washing up the beach and lapping at the door of the climate negotiations - certainly figuratively and quite possibly literally. How many years, I wonder, before the UNFCCC has to stop organising its meetings in places threatened by rising sea levels - Copenhagen, Cancun, Durban, and next year Doha. What price a COP in somewhere high and relatively safe, like Quito or Kathmandu!

The positive news is that a sense of urgency is building to deal with climate change. That's not surprising from likes of the Maldives and other members of the Climate Vulnerability Forum, including Bangladesh and the Pacific islands. Their land, sometimes their very existence, is threatened. It is becoming hard to look their ministers in the eye, when so little progress is being made on a global deal.

More surprising, perhaps, is the level of energy found in private sector fora, where new technologies and business models are being rolled out, especially but not only in renewable energy. 'Grid parity' is the buzzword, meaning supply to the grid at a price competitive with coal, gas, or liquid fuels. That's already happening with wind in Brazil, for example, and will happen soon with solar - in Brazil, but also in India and other countries. South Africa has launched an impressive Renewables Initiative , designed to deliver 3.7 GW in the first round. The cost of solar has fallen remarkably, driven mainly by over-supply of silicon wafers, but also by technical change and economies of scale. As one person observed: 'by the end of this decade, we will never need to build another coal-fired power station'. Maybe. The advocates of carbon capture and storage have not yet gone quiet.

There is definitely a sense of exuberance in the private sector. Actually, it verges on irrational exuberance, in Alan Greenspan's famous phrase. Ask them, as I did, whether the market is so bullish that they can manage without Government support, and they are quick to retreat. Private sector exuberance, it appears, is built on subsidy, tax breaks and regulatory padding. Fair enough. These are infant industries. They need TLC - not tender loving care, though that would not go amiss, but regulatory frameworks which are transparent, long-lasting and certain. It doesn't help, for example, as the current furore in the UK demonstrates, when feed-in tariffs are reduced drastically and with very little notice. Nor does it seem obviously a sensible idea to set up an emissions trading scheme, and then give polluting companies tax breaks when they find the cost too high. Would it not have been better to spend the money on supporting innovation?

The politics of regulation aside, though, it is clear that the private sector has 'got it'. Dealing with climate change will require long-term transformation of the global economy, a new industrial revolution. At best, this will be a national project, as in Korea, Denmark and a few developing countries, like Rwanda. Electricity supply will be one of the drivers, but there will be many others: lighting, bio-technology, transport, town planning, telecommunications.

Revolutions on this scale, we know, are highly disruptive - indeed business leaders speak approvingly of 'disruptive innovation' and, citing the economist Joseph Schumpeter, of 'creative destruction'. Who will be the winners in the race to secure competitive advantage in the new global economy and who will be the losers? Will we wake up in 50 years to discover we have saved the planet, but in so doing have left behind the countries which failed to innovate and the populations who did not have access to the technologies, skills and finance needed to transform their prospects?

Public policy will be crucial in managing these risks. For example, it is remarkable how easily 'renewable energy' elides into 'renewable electricity'. The poor expend large amounts of their own energy in walking to water points or markets, in tilling their fields, and in processing crops. Their demand is not only for renewable electricity to power lighting in the home, but equally for modern transport services and for less drudgery on the farm.

Governments will need to address these challenges, and be strategic in the next round of support to renewables.

While all this is going on - disruption here, destruction there, hopefully balanced by enough innovation and enough creation to prevent industrial and social collapse - the world will continue to warm. Few now believe that holding global warming to two degrees is possible. The evidence is already growing of increased extreme weather events, whether floods in Pakistan or Australia, storms in Central America, or fires in Siberia. There is a direct line of causality between these events and shocks to the global economy, for example in the form of higher food prices . And there is evidence enough that high food prices were a trigger of political upheaval in the Arab states. Is the Arab Spring the first modern example of climate change causing revolution?

If so, we have cause for concern, because current climatic extremes provide merely a foretaste of what may come. The recent report by the IPCC on extreme weather events makes this clear. The number and scale of disasters, their economic cost and the humanitarian case load have all been rising. However, not all of these are weather-related (think the China and Haiti earthquakes, for example). Furthermore, of those that are weather-related, not all are the result of climate change. When population grows, and when people find themselves living in shanty towns on hillsides or on floodplains, vulnerability also rises to plain, old-fashioned weather. That is why planning for climate-related threats cannot be treated in isolation from overall disaster risk reduction and management.

Looking to the future, environmental change is likely to be as disruptive as industrial change, and to require public action on an equally ambitious scale. Take a simple example. In Kenya, Uganda and Rwanda, coffee and tea are major cash crops, the source of livelihood for millions of small farms and landless families, and important sources of foreign exchange. If temperatures rise by two degrees, the current ecological niches in which these crops are grown are no longer as viable, requiring either a search for new crops, or major re-engineering of current crops. In Kenya, for example, it is estimated that tea will no longer be grown in Nandi or Kericho, and that the area of Kenya suitable for the crop will fall by nearly half. Kericho has a famous hotel called the Kericho Tea Hotel. Perhaps it will have to be renamed the Hot Water Hotel, because there is no tea?

Agricultural planners have a mountain to climb in coming to terms with change on this scale. At present, the focus of 'climate smart agriculture' is on local adaptation - more tree planting, for example, or minimum tillage to retain organic matter in the soil. This is a necessary approach, but incomplete. It risks confusing climate smart agriculture with the familiar domain of sustainable agriculture. Longer term structural changes will be required. For example, what will the agricultural sector in developing countries look like, when traditional crops have shifted upwards by 500m (often, by the way, into protected mountain areas). How will agricultural supply chains respond when oil costs $US 150 per barrel, making fertiliser and long-distance transport much more expensive? What will happen to export crops when there is a carbon tax on bunker fuel for ships and jet fuel for planes? This requires a new way of thinking about the impact of climate change.

The threads begin to come together here, and point the way for political leaders and their policy staff. Climate compatible development is about mitigation and adaptation - and much more. It is also about shaping industrial and social change on a global scale. No country can afford to be isolated from the transformational change that will inevitably take place, driven by climate change itself, but also by responses to it. Countries may think they can sit tight and focus on adaptation: build dykes here, construct hurricane shelters there, plant some trees, promote sustainable agriculture. Not so. Disruptive innovation in the global economy will change markets, destroying some industries, creating others, and everywhere reshaping the foundations of competitive advantage. The Koreans are right, and the Danes, and the Rwandans. This needs to be a national project, initiated perhaps by Ministries of the Environment, but led from the top and reaching deep into every corner of government. Climate change is a threat. But it is also a challenge to leadership, an opportunity to build a more productive, more inclusive and more sustainable society. That would be something to celebrate, and worth a Durbar.