Green economy and climate change

Our home, the Earth, is facing erosion, natural resources are running out. This deterioration is making giant strides as the weather gets warmer in the summer and colder in the winter, combined with more and more extreme natural disasters.

Environmental organizations such as World Wildlife Fund (WWF) state that, if we continue our current rate of consumption, by 2030 we will need two planets to meet our needs.

The risk is seriously high if the economic objectives designed to manage our resources efficiently and rationally are not aligned in order to achieve truly sustainable development that reaches out to all areas, from the social to the economic.

With this approach, the work of Patricia Espinosa, Executive Secretary of the Framework Convention of the United Nations on Climate Change (UNFCCC) and Francisco Suárez, Chairman of the World Environment Center (WEC) aim to strengthen and accelerate the commitment of all parties to undertake actions that generate wellbeing and foster a collaborative economic system without harming the environment while respecting the integrity of all citizens.

Mexico has been a leader on the topic. One example of this is the leadership taken in the United Nations’ Biodiversity Conference (COP13) in Cancun. Here the Mexican government committed to increase the Natural Protected Areas to reach almost 910 thousand square kilometers, which represents a total of 45.5% of land territory.

During the interview, they explain how their daily work at worldwide level is reflected in a philosophy that enhances the will to accelerate momentum towards a sustainable culture, a raw material that accompanies any initiative to combat marginalization and fight for efficient energy consumption.

As indicated by Espinosa, climate action plans existing in almost every country—equivalent to 96% of global emissions—are a clear sign of global consensus, although solutions must adapt to the economic, social, and geographic conditions of each country.

The challenge reaches all areas of corporations, stresses Francisco Suárez. According to Carbon Trust, about 80% of the carbon emissions of many companies come from their value chain, making it imperative to act responsibly toward the environment and the community, an element that should play an important part of their business strategies.

What are your goals as leader of the United Nations Framework Convention on Climate Change (UNFCCC)?

(Patricia Espinosa): Along with the adoption of the Paris Agreement and the Sustainable Development Goals (SDG), a global movement was launched to promote action against climate change and foster a sustainable future. It is necessary to reduce emissions by 2030. My mission is to enable those efforts to move forward, to help governments and the entire world to speed up and strengthen actions in favor of sustainability. Now, we must turn these plans into concrete actions, into policies and investment strategies that complement and support the sustainable development frameworks in each country.

In order to achieve this change, governments need to ensure that all their ministries—finance, planning, energy, environment, education, health, and transport, among others—work in coordination, adding to the efforts of the private sector and society.

There are political figures and business leaders who still do not accept that climate change is real. Why do so many segments of developed countries remain skeptical about this problem?

(Patricia Espinosa): Even though there is still skepticism, science is the answer. Governments base their decisions on the reports of the Experts Intergovernmental Panel on Climate Change (IPCC), prepared from studies validated by scientists from all over the world. Climate change is a reality recognized by governments, as evidenced by the rapid willingness to enforce the Paris Agreement, and the growing number of companies and investors who acknowledge the risk this represents.
The Paris Agreement not only creates an important support mechanism, but also promotes the capacities of countries and societies to take effective action in order to face climate change.

Each year public and private sector investment in clean energy and its more efficient use increases, contributing effective measures to address this global problem.

What is the main role of global and local corporations concerning this problem? What are the three specific actions required to reduce their carbon footprint?

(Francisco Suárez): The private sector must voluntarily commit to generating shared value; this is a key factor for sustainable development. At the WEC, we have observed that these actions are focused on the use of clean energy, energy efficiency, and work along the value chain.

Transition to clean energy helps reduce carbon emissions while the private sector grows, thus facilitating its development within the global economy. Working on energy efficiency allows companies to reduce costs, generate innovation, and adopt new technologies, so more is produced with less.

At the WEC, we have a program called Greening the Supply Chain, which aim is to improve the environmental performance of MSMEs. Active since 2003, this program has promoted cleaner and more efficient production with investments exceeding US$9.6 million and generating savings of more than US$48 million and about 119 thousand tons of greenhouse gases. In addition to those positive impacts, savings in water of almost 2,600 million liters were achieved by these projects.

According to Carbon Trust, about 80% of the carbon emissions of many companies are found in the value chain. For global corporations, this can offer an efficient way to add providers that are part of their value chain.

At the WEC, we make alliances, along with Pfizer, Rainforest Alliance, and The Nature Conservancy, to work in the Mayan jungle with small coffee producers, generating sales of more than US$4.2 million of Mexican products and US$7.3 million of Guatemalan products.

At the WEC, we are convinced that cross-agency efforts between the private sector, government, and civil society are an effective way to move forward.

We work with over 30 leading companies and several universities globally to promote sustainability education and address current challenges. Companies like FEMSA, Unilever, Roche, Johnson Controls, CH2M, General Motors, Boeing, and IBM are just some examples of our members.

Conservation of natural resources is a fundamental task for the fulfillment of the SDG. There are four particular objectives dealing with environmental issues: Clean Water and Sanitation; Climate Action, Underwater Life; and Life of Terrestrial Ecosystems.

There are some companies already integrating an economic assessment of ecosystems and biodiversity in their financial statements. Thus, companies are able to consider the conservation of natural resources in their business decisions.

Speaking of the corporate world, is it in favor of an environment with more regulation or of a market incentive-oriented system?

(Patricia Espinosa): With all certainty, market incentives can positively influence the decisions people make and can act as important economic impulses for change. These mechanisms are especially effective when they support existing trends, a situation that the business sector currently sees as a window of opportunities in which to act against climate change will favor their own interests.

From incorporating sustainability into their supply chains, investing in renewable energy to reducing energy costs or ensuring that factories resist the effects of climate change, all of these measures can be further fostered thanks to the incentives of smart markets.

AGRICULTURAL SECTOR
A more restricted international trade environment will have a major impact on import and export flows. What impacts could it have on global food security?

(Patricia Espinosa): The main objective of the UNFCCC is to stabilize concentrations of greenhouse gases in the atmosphere at levels that prevent the dangerous interferences of human nature with the climate system. This should be achieved over a period of time that will allow ecosystems to adapt to climate change and thus ensure that food production is not threatened, enabling economic development to continue in a sustainable manner.

One of the principles of the Convention states that governments should cooperate to promote a supportive international economic system, which makes growth and global sustainable economic development possible so that they can better address the problems derived from climate change.

This means that measures to battle this challenge should not lead to arbitrary or unjustifiable discrimination or a disguised restriction on international trade. In this regard, the Paris Agreement also recognizes the priority of safekeeping food security and ending hunger and the vulnerability of food production systems facing the impacts of climate change.

The agribusiness sector is responsible for a large part of global carbon emissions. What can we do to mitigate its impacts?

(Patricia Espinosa): With the help of the private sector, the parties are already showing that emissions in the agricultural sector may be reduced. The agribusiness sector has multiple options available, many of which are based on new studies.

For example, methane emissions would be reduced by more than 70% by adding 2% of dry seaweed to the meal of sheep and cows, Another example is water pollution.

Mismanaged agricultural activities can lead to nutrient pollution. Fertilizers and animal manure are rich in nitrogen and phosphorus and are a major source of nutrient pollution from agricultural sources. When rain washes away surpluses, these nutrients end up polluting rivers and groundwater.

(Francisco Suárez): According to the World Resources Institute (WRI), about 13% of global emissions come from agribusinesses, which makes the sector the second largest global emitter. From 1990 to 2010, the emissions from this sector have increased 8%, and it is estimated that they will grow over 15% from 2010 to 2030. These increases are due both to population growth and to changes in dietary preferences in developing economies.

It is expected that the production of vegetable oils and animal products, which generate a high intensity of greenhouse gases, are the fastest growing agricultural products.

Making changes in agricultural practices and food consumption patterns to nutritional sources with less environmental impact offers great opportunities for the environment. According to WRI, 24% of the calories produced for human consumption are lost or wasted during the value chain. There are projects working on this. In the United States, about 40 million tons of food is wasted. In response to this, the Food Waste Reduction Alliance, a cooperation of more than 30 manufacturing, marketing, and services companies, are working to reduce food waste, increase access to food for vulnerable populations, and recycle leftover waste. Actions like this will enable us to address these issues.

PERSPECTIVE ON MEXICO
Is public policy in Mexico’s energy sector enough?

(Patricia Espinosa): All countries are important in the fight against climate change because every action counts. Mexico, like many other countries, is making an important contribution. One could even say that Mexico is positioning as a leader in the renewable energy field after a series of successful energy auctions. This is encouraging and opens the door to more expansion, and more innovation and development in addition to environmental benefits and progress in health matters for the country’s population.

What is the future of voluntary carbon markets? How can companies participate to strengthen efforts to reduce their carbon footprint?

(Francisco Suárez): During COP21 in Paris, leaders from around the world got together to develop strategies to fight climate change. In this context and since the meetings in Copenhagen in 2009 and Cancun in 2010, a compromise was made for developed countries to collect from different sources, such as bilateral, multilateral, private, and public sources, among others. In 2015 the commitment of US$100 billion per year until 2020 was made to support the fight against the consequences of climate change in developing countries.

This, along with actions at the country level, such as those implemented in 2012 by Mexico’s National System of Climate Change of the Ministry of Environment and Natural Resources, enables the generation of comprehensive actions that address the problems, including the development of carbon markets.
The challenge for voluntary carbon markets is to create larger definitions for every participating country, ensuring better working and financing schemes focusing on market development.

There are voices on the real capacity to invest in green projects. What are the three aspects of the Mexican sector that could receive funding for these projects?

(Francisco Suárez): In addition to the support that is given through funds created during the COP21 and the developments presented by carbon markets in Mexico, there are different sectors that will receive funding to reduce their impact on climate change.

In the transport sector, the transition to clean, electric, and natural gas vehicles will experience strong growth in the coming years.

In energy matters, projects involving efficiency or the use of clean energy enjoy a great opportunity for development. Companies like FEMSA, Peñoles, Walmart, Grupo Bimbo, and CEMEX are already major participants in clean energy projects, providing a clear example of the potential development that these types of projects offer to the country.

At Coca-Cola FEMSA, there is the 2020 Goal of supplying 85% of its manufacturing processes with clean energy in Mexico. Currently, there is 46% progress towards this commitment. Actually, Mundo Ejecutivo published that Mexico could be one of the Top 10 producers of wind power by 2017 worldwide. The Mexican government is promoting standards that make it easier to install solar heaters and ecological stoves and use alternative fuels. Proper management of agricultural waste, focusing on power generation, and the use of biofertilizers also offer large potential. All of these projects are aligned with the strategies of the federal government. They provide very good economic opportunities for products and companies, and at the same time, they generate positive impacts on the environment, enabling them to offer good opportunities for economic resource investment.

What positive actions and public policies are there in Mexico that effectively enables a decrease in the national carbon footprint?

(Patricia Espinosa): Depending on their particular contribution on a national scale, Mexico has committed unconditionally to cut its emissions of greenhouse gases (GHG) and its short-lived climate pollutants by 25% by 2030. This implies a 22% reduction of greenhouse gases and a 51% reduction of soot. With these commitments, emissions would reach a peak in 2026, and their growth will disassociate from economic growth.

The intensity of emissions per unit of GDP will be reduced by 40% between 2013 and 2030.

For its contribution, Mexico states that, in order to achieve these objectives, investments are needed to transform the patterns of production and consumption and to enable emissions to reach their peak within the promised time limit. In order to develop the necessary policies and achieve this transformation and these emission reductions, a process of public participation is required. I am convinced that this process will give positive results.