LOCATION Raffles City Convention Centre

SPEAKER British High Commissioner, Paul Madden

EVENT Carbon Forum Asia

DATE 25/10/2009

Delighted to be speaking on this panel alongside such distinguished experts on Carbon markets. I guess my role this afternoon is to provide a diplomatic perspective to the discussion.

Perhaps I could start with a reminder of just why all this is so important. Last week my government published a map identifying the human impacts of a 4 degree increase in global temperatures, which is the least we can expect in the absence of action to cut CO2 emissions.

The map is based on the latest scientific research. It was produced by the British Met Office's Hadley Centre, one of the world's most renowned institutions for the study of climate change. It brings out very starkly what a 4 degree rise will mean.

It shows that 4 degrees translates to a 5.5 deg rise for average land temperatures, since land heats up more quickly than oceans. The hottest days in the year in many highly populated areas could be between 6 and 12 degrees hotter than now. The map shows that sea level rises could put 150 million more people at risk from flooding in Asia and other vulnerable regions.
It identifies the impact on agriculture, with potentially tens or hundreds of millions more people at risk from hunger, as yields decrease for all major cereal crops in all major regions of production. It warns that later this century more than a third of the world's population could be living in areas with limited availability of water.

In April this year, the Asian Development Bank produced an influential report on the economic impact of climate change in the South East Asian region. Using methodologies developed in the famous Stern Report, it concluded that the impact of climate change in this part of the world could be twice as severe as for the average for the world. That is because such a high proportion of the region's population and economic activity is located in low-lying coastal areas, and because the economies are highly dependent on natural resources production.

Climate change is already having a very important impact on individuals and societies. The recent report of the Global Humanitarian Forum led by Kofi Annan suggested that 325m people are already seriously affected by drought, disease, floods, loss of livestock and declining agricultural and fisheries yields. And that a further 500m people are at extreme risk. And that every year the effects of climate change are already killing 300,000 people (that's the same number as were killed by the Indian Ocean Tsunami.)

Of course, those being hit first and hardest by climate change are those who have done the least to cause it, those living in the poorest countries.

As a diplomat, it's important to acknowledge that climate change will also have potential geo-political impact. Climate Change has the potential to shift relationships between countries. In the long term this could mean an increasingly isolationist and protectionist world.

That is why we don't want a 4 degree world. To minimise the risks we need to ensure that global temperature rise is kept to no more than 2 degrees.

And that is why the Copenhagen meeting in December is so important. Our Prime Minister, Gordon Brown, recently said "In every era there are only one or two moments when nations come together and reach agreements that make history - because they change the course of history. Copenhagen must be such a time. "

So we have to be ambitious in our goals for the Copenhagen outcomes. We want to see an agreement that supports stabilising the climate at 2 degrees, emissions peaking between 2015 and 2020, with action from all countries, and a 50% reduction in Greenhouse Gas emissions by 2050.

This means binding economy wide caps in the mid term for developed countries, and nationally appropriate mitigation actions for developing ones. It means agreements on finance for adaptation, forestry, technology and capacity building. It means techological cooperation, including specific action plans in areas like solar power, and carbon capture and storage. And it means national communications and monitoring, reporting and verification.

It is clear from the latest round of negotiations in Bangkok earlier this month that there is still some way to go. We believe that agreement at Copenhagen is possible. But it is clear that real political leadership will be required in order to get a deal. We believe that failure is not an option: this issue is too important for that. We have to remain focused on plan A, rather than talking about plan B.

We have seen some encouraging announcements and commitments in recent weeks. For example the target announced by the new Japanese government to cut emissions by 25%; the speech by Chinese President Hu to the United Nations; and President Yudhoyono's announcement that Indonesia would seek to reduce emissions by 26% on business as usual by 2020. And we expect more announcements before Copenhagen.

Clearly a very important part of the equation is making progress with developed country commitments on finance. My Prime Minister, Gordon Brown, has put forward a package of proposals for climate change finance, with a working figure of $100 billion a year in public and private funding for developing countries by 2020. We have also set out some key principles on financing: that there should be predictability; that financing should be additional to Official Development Assistance; and that governance should be shared amongst developed and developing countries.

The UK will be hosting a meeting of G20 finance ministers at St Andrews on 6-7 November. We will be hoping to give a strong push to climate change finance at that meeting.  

We believe that the APEC summit, which Singapore will be hosting in this city later next month, can also play a vital role, as the last major meeting of a number of world leaders before Copenhagen. APEC will bring together a range of countries, including some of those who will suffer most from climate change, and some of those who can contribute most to its mitigation. We hope that APEC will confirm the role of governments in creating the right investment frameworks for low carbon innovation, development and trade.

Ambitious commitments on emission reductions at Copenhagen will help to give a clear vision for carbon markets. Ultimately it is markets that will enable us to reduce emissions most efficiently, by focusing investment on where it will make most difference. We want to see an expanded global carbon market with new sectoral trading and crediting mechanisms, that can scale up emission reductions and financial flows to developing countries. We envisage an OECD-wide carbon market by 2015, extended to developing countries by 2020. Financial flows from the carbon market will be an increasingly important source of finance for developing countries. But they will still need to be complemented by other financial flows.

The CDM is on course to deliver more than 2.7 billion tonnes of CO2 equivalent in the first commitment period 2008-2012. CDM will still be important post 2012, particularly for the Least Developed Countries, so we need agreement to reforms that will make it more efficient and transparent and increase confidence about its environmental integrity. The EU's 2020 package makes it clear that we see a continuing role for CDM beyond 2012. That provides a degree of continuity to help promote the development of projects. As well as achieving emission reductions, CDM is also an important way of building capacity in developing countries. But it will not be enough on its own to develop the required financial flows. You will have heard my colleague John Pearson talking yesterday about possible new mechanisms to increase those financial flows.

The Carbon Market is not a "get out of jail free" card for rich countries, which enables them to avoid acting. The UK for one has made very substantial commitments on emission reduction, without relying on carbon offsets. We're pleased to see others moving in the same direction.

We believe that there is now a widespread recognition of the importance of getting a good outcome from Copenhagen. We hope that our leaders collectively will give the final push needed to deliver that agreement.

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