Stephen Harper and Bruce Carnegie-Brown – ESG

Speaking alongside Lloyd’s chairman Bruce Carnegie-Brown, Harper said environmental targets currently lack “concentration” on how they are to be achieved. He said pledges made at the international level are consistently not met and yet are followed by new, more ambitious targets.

Harper said that the 2050 net-zero emission targets, established by the UN’s Intergovernmental Panel on Climate Change, are the culmination of failed attempts at previously established targets, a trend which cannot continue if real action on climate change is to be taken.

“The world has been on a treadmill for the last 30 years. We have, through various international processes, set targets but targets without any real concentration on how they are to be met,” Canada’s 22nd prime minister told the RPC Global Access Conference, hosted by The Insurer.

“This is a very unique area of public policy whereby we think that just by setting targets we will achieve something. We set targets and we don’t understand how to meet them. Then when we fail to meet them, we come up with a more ambitious target as a solution.”

While Harper said science-based targets work in principle, in practice he said they help perpetuate a belief in technological salvation that diminishes the sense of urgency surrounding the need to curb emissions in the present.

“Let’s be clear about this: with the technology we have today, there is no way of achieving that [net-zero target]. That is unachievable,” he continued.

He qualified this statement by saying that the current 2050 climate goal is unachievable unless governments – and voters – are prepared to see a “significant shutdown of economic activity and a significant lowering of standards of living around the world”. 

“I exclude this as a reasonable scenario,” he added.

Stephen Harper served as Canada’s 22nd Prime Minister

Harper also noted that the adoption of a net-zero target doesn’t necessarily indicate whether a country is on track to wean its economy off the fossil fuels that produce most greenhouse gas emissions in time to stop the worst of climate change – or that it even intends to do so.

Different countries have very different strategies in mind for reaching a net-zero future, creating confusion, he said. “The net effect of that over time is, in my judgement, to drive emissions to the highest emitting jurisdictions. I actually think we are seeing not just a continued growth in emissions, but a greater separation in [the geographical spread] of emissions as we move forward.”

From an industry standpoint, Carnegie-Brown noted that it is the scale of the climate challenge that makes it so complicated to resolve in a coherent way.

“I liken it to the aspirations of President Kennedy in terms of landing on the moon. He put a vision out at the beginning of the 60s and had no idea how to achieve it but with the right kind of ingenuity you get there in 1969,” Carnegie-Brown said.

“It isn’t about one country’s idea of itself investing unlimited dollars in moving in a particular direction, you’ve got to engage a huge number of countries with very different economic models at very different stages of their development. And there are winners and losers in this. It is uniquely difficult.”

And because of the scale of this problem, it is more important than ever that the insurance industry utilises all its resources and capabilities in addressing the systemic nature of climate change, he said, adding that it is fundamentally the sector’s role to protect the world against such risks.

But Carnegie-Brown added: “It is absolutely clear that we [insurance industry] can’t do this alone, we need partners to be able to achieve the global goals. And this is where the private sector and government need to come together.”

Lloyd’s chairman Bruce Carnegie-Brown

 

He warned that measuring progress remains a challenge, which leaves the door open for misinformation and so-called greenwashing.

“We absolutely need common standards of measurement. At the moment that is hugely fragmented which allows for greenwashing conversations to develop. Some of these metrics are overly complicated so your eyes glaze over as you try to understand them. It’s really important that the person in the street is capable of understanding these things … so having the right standard of measurement I think is incredibly important,” he said.

“It remains crucial that this does not become a case of looking at the size of the elephant and backing away. What you always get taught is if you’re going to eat an elephant, you have to do it a slice at a time. So I think there are things that we can do pragmatically to begin trying to take pieces out of this to make the problem smaller.”

While Harper is of the opinion that net-zero targets will not be met by 2050, he believes that progress in this direction could be made through the use of nuclear and renewable energy at a much larger scale, as well as less reliance on fossil fuels.

“The only way any of these targets can be achieved, is the development of energy transition technology that at scale is in the same ballpark of cost effectiveness as the traditional fossil fuels; that’s the only way of meeting that. And until we get our heads around that and develop those alternatives, we will continue on this treadmill,” Harper noted.