COP15: Cold, Flat and Crowded (by Karl)

After spending another six hours on Tuesday waiting in a handful of lines while doing calisthenics to fight the near-freezing temperatures, we are thrilled to announce that we actually made into the conference! Unfortunately, I use the term “we” quite loosely. That is because only five out of ten people in our group were permitted to enter – the UNFCCC had issued required “secondary passes” to control the number of entrants, and we only received five of these. I could spend the rest of this blog writing about how dysfunctional the conference has been and questioning how the UN is in a position to broker a deal among hundreds of countries when it can’t effectively manage a two-week conference, but I won’t. And why not? Because Thomas Friedman was far too entertaining yesterday.

The Climate Consortium Denmark hosted a panel focusing, in part, on what the role of government is in a green growth economy. The panel featured the renowned author, Thomas Friedman, as well as The Danish Minister for Economic and Business Affairs, Lene Espersen, and the CEO of the international shipping company Maersk, Nils Smedegaard Andersen. What was refreshing about the group as a whole is that all three of them wholeheartedly agreed that the government should put a price on carbon emissions. This was especially surprising coming from the CEO of Maersk who claimed that such policy would only encourage his company to further lower costs and innovate while distancing themselves from their competition. I simply didn’t expect to hear this from the CEO of the largest shipping container company in the world.

As for Thomas Friedman’s comments, if you have read his book “Hot, Flat and Crowded”, you probably wouldn’t have gotten anything out of the panel. That said, he made several points throughout his talk that seemed to resonate with both the audience and the other panelists. One comment of particular interest was how China is going green not simply from an economic perspective, but out of necessity. Given the country’s huge population growth, high level of air pollution and dwindling water reserves, human survival in China is certainly more at risk than, say, that of the United States. According to Friedman, “they get it.” And as an American citizen, this worries him. Friedman wants America to be the country that develops the new and innovative technologies that will mitigate climate change and keep America at the forefront of economic dominance. But he doesn’t appear confident that this will happen. Issues surrounding the environment are much more immediate to the Chinese than they are to the United States, and American citizens continue to be more focused on their immediate needs (i.e. health care reform). China is in a position to “clean our clocks,” something that I don’t necessarily disagree with.

The other point that Friedman made that solicited a round of applause from the audience was his rant about price signals. His point was simple, but effective (and very animated). Fifteen years ago, people (some, anyway) were willing to pay $2,000 to own a cell phone. Why? Because it changed their lives and made life more convenient. Are individuals willing to pay a similar price premium to put solar panels on their rooves? No way. That is because solar panels do not change a person’s life. They deliver the same thing that a electric utility delivers: electrons. As such, the only way that people are going to pay for solar-generated electrons is if they are relatively cheaper. And the only way to do this is by instituting a price signal: either make solar cheaper by offering incentives, or make fossil fuel more expensive by placing a price on carbon. This might be an obvious point, but it is truly critical to climate change policy. People’s behavior won’t change unless doing so saves them money.

The second panel that we attended was sponsored by ICLEI and featured a handful of federal, state, and local elected officials. They included Nancy Sutley, Chair White House Council on Environmental Quality; Jim Boyle, Governor Wisconsin; Michael Bloomberg, Mayor New York City; and Patrick Hays, Mayor North Little Rock. In general, the panel sounded like a handful of political pitches (Bloomberg 2012, anyone?). In particular, Sutley looked and sounded like she was making a speech to Congress, constantly looking down at her notes and thanking a variety of people and organizations. While the other panelists made some good points about the role of local governments in implementing change in cities which contribute to a whopping 80% of all carbon emissions, they focused primarily on their own accomplishments. It would have been more refreshing to hear them speak their opinions and real ideas to affect change. Perhaps the only truly unique idea from that session came from an audience member, Carl Pope, who is the former Executive Director of the Sierra Club. Mr. Pope quoted Bill Clinton, saying that private banks around the world hold $9 trillion cash that they would like to lend, but can’t find the right opportunities to do so. He claimed that there exist lots of local municipal projects (e.g. energy efficiency programs) that are not only provide better services to the community, but are actually profitable. If banks lent a fraction of this money (say a mere $3 trillion) to municipalities for such projects, the municipalities would receive much needed capital, banks would earn a reasonable return on their investment, and carbon emissions would be reduced as a result. To quote my good friends in the consulting industry, this is what I call a real “win-win”!

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