More than any other, the global environmental challenge needs bold forward-looking acts of statesmanship–and on a global scale. This winter, the British government is taking major steps to move the debate forward. Britain is proposing the creation of the first global carbon market–and leading the way with extending the European emissions-trading scheme.
Britain is also proposing a multibillion-dollar international initiative through the World Bank–with the richest countries investing in energy efficiency and alternative energy in the poorest countries. With Britain itself investing up to £1 billion to kick-start new research, we are proposing a new network of world research institutes focusing on environmental technologies.
We recognize that our global initiatives require domestic action too. So Britain is introducing unique climate-change legislation. The new laws, to be introduced by our Environment Secretary David Miliband, will set targets for the reduction of emissions–targets that will be independently monitored.
Action is urgent because new and dramatic evidence has changed the whole context of the environmental debate. We know that the world economy in 2050 will be three to four times larger than it is today. To avoid the most damaging effects of climate change, emissions per unit of wealth will need to be just one quarter of what they are now. And tackling climate change–the world’s biggest market failure–is not just an environmental and economic imperative. It is a moral one: a case of injustice between generations and between nations, with the poorest people in the world suffering worst.
So the priority we all attach to environmental concerns has to change. In the 20th century, our economic ambitions were the twin objectives of achieving stable economic growth and full employment. Now, in the 21st century, our new objectives will have to be threefold: growth, full employment and environmental care.
And we can advance prosperity and environmental stewardship together only if we fully mobilize the power of science and innovation in new technologies; use market mechanisms to create incentives for change in the global economy; promote greater personal and social responsibility in our everyday lives–all supported by sustained public and private investment in environmental change.
So the environmental challenge cannot be met by government alone. Nor can it be met by individuals or companies alone. It can be met only by responsible citizens and responsible companies and communities work-ing with responsible governments, and it is what we can do working together that will count most.
How would our first proposal–the creation of the first worldwide carbon market–work? Britain was the first country to introduce a national carbon-emissions trading scheme, leading to the 25-state European system that is now cutting emissions across the continent. By 2008 Britain’s contributions to the scheme will reach 8 million tons a year.
The next stage of our plan is to set a new Europe-wide emissions-reduction target of 30 percent by 2020 and then at least 60 percent by 2050. From a European base, we then propose to extend emissions trading beyond Europe and across the world.
We would guarantee beyond 2012 a clean development mechanism, enabling not only financial flows but technology transfer to the world’s poorest countries. And we would hope to link up similar schemes in developed countries, such as those already being developed in Japan, Australia, Switzerland, the northeastern American states and California.
Implementing each of these measures will establish the foundation for a global carbon market and a low-carbon global economy. What makes the new policy unique is that we proceed not by the old way of rigid regulation but by the modern way–working with the market, harnessing its power to set a global price for carbon, offering incentives for the most efficient and innovative ways of tackling climate change.
What this policy shows is that economic instruments can encourage environmental progress. I am optimistic about what can be achieved, because our economic and environmental priorities increasingly reinforce each other. High oil prices and instability in oil-producing regions have shown that an energy supply that is stable, secure and sustainable is as much an economic as an environmental imperative.
Rising investment in new energy and environmental technologies can be the source of future economic growth, jobs and exports. By 2010 the global environmental market–clean energy, waste and water–could be worth almost $700 billion, a sector as big as the successful aerospace or pharmaceuticals sector of today.
For Britain it could mean an extra 100,000 jobs. And just as the City of London is and will increasingly be the global center for carbon trading, the seas around Britain are at the forefront of offshore renewable-power generation.
But tackling climate change can be an opportunity for all countries. Biofuels, for example, offer a cleaner way of powering vehicles and, for poorer countries, a potential source of new exports. So Britain is working in a new partnership with South Africa, Mozambique and Brazil–currently the world’s largest producer–to promote the development of a sustainable biofuels industry in southern Africa.
Sixty years ago, facing up to the challenges of their times, the world’s leaders resolved that international cooperation was the best way to solve the economic challenges of the postwar world. They concluded that prosperity, like peace, was indivisible and that prosperity, to be sustained, had to be shared. A few years ago a world debt-relief campaign that started with a call by a few developed into a campaign by many and then into a consensus among almost all.
It is now time to do the same for climate change–by international action. Working apart, we will only fail; only by working together can we succeed. Our children will not excuse a failure of political will to do so. But with strong leadership we can rise to this challenge.
