“Climate change combines risks with opportunities”

Michael Grubb:   “The ‘green deal’ so far is more concept than concrete.” (Photo: Paperjam)

Michael Grubb:   “The ‘green deal’ so far is more concept than concrete.” (Photo: Paperjam)

The 14th edition of the Journée de l’Économie, organised on 16 March, will gather leading names from the worlds of business, academia and politics to discuss and debate critical climate change issues and their impact on the economy and industry as a whole. Among them, Michael Grubb from UCL Institute of Sustainable Resources in Belgium.

Article édité le 11 mars 2020 - En raison du coronavirus, la Journée de l’Économie est reportée à une date ultérieure.

Article edited on March 11, 2020 - Due to the coronavirus, the Journée de l’Économie is postponed to a later date.

The world’s climate has already changed measurably in response to accumulating greenhouse gas (GHG) emissions. These changes as well as projected future disruptions have prompted intense research into the nature of the problem, potential policy solutions and changes to business models. Many scientists believe that humanity is close to the “point of no return”.

In this context, the organisers of the Journée de l’Économie  chose an open question as the main topic of this year’s event: “Climate crisis: are we turning the corner? A crucial shift for Luxembourg’s economy”.

Among many experts and speakers featuring on the agenda, Michael Grubb , professor of energy and climate change & research director, UCL Institute of Sustainable Resources, will share his view on the matter. He answers three questions to Paperjam.

Do you think that humanity is close to the “point of no return” when it comes to climate crisis?

Michael Grubb. – “In terms of climate impacts – technically we passed that point some years ago. Climate change is happening and it will get worse. The question is whether we tip the earth’s climate systems into more structural shifts (‘tipping points’) that could be far more disruptive still – of which there are several possibilities. The Paris agreement goal of ‘well below 2°C warming’ and to strive for 1.5°C is designed to minimise those risks. We are, unfortunately, approaching the point at which that range is slipping out of reach.

How could European authorities make the “green deal” strategy a concrete success on the energy side?

“The ‘green deal’ so far is more concept than concrete. As a start, that is useful as a framework – one important role of the state is to shape expectations in the public interest. ‘Green deal’ with the net zero goal is a great device for that because it does say that no emitting sectors – or their investors – can escape the need to change. But the hard work is just beginning – what does it mean more specifically? For the energy-related industries, we need now the more detailed roadmaps and policies to drive or support change in electricity, transport, industry and the built environment.

That’s already a huge agenda. The most difficult cross-cutting elements? I’d say three, in particular: (i) deepening the impact of economic incentives, including in industry, which must include some kind of consumption-based or border adjustment for carbon pricing or standards; (ii) accelerating market-based innovation and transformation through government-industry partnerships, including building the complementary areas of comparative advantage of different member states; and (iii) handling subsidiarity between the EU vs member state competencies in this entire enterprise.

To make it more specific, in electricity: the revolution in renewable energy means we could now base northern European energy substantially around north sea renewables, and southern European countries around Mediterranean solar and wind resources, along with requisite transmission and storage/backup capacities. Just think about the scale of investment and coordination that it implies.

How countries like Luxembourg can become the champion of a “0 carbon” economy?

“From my (limited) knowledge, in two main areas. First, finance. Climate change combines huge risks with huge opportunities. The current structure of the finance sector – and its ‘tragedy of the horizons’, to use Mark Carney’s words – seems set to maximise the risks and miss the opportunities. Luxembourg could do itself and the EU a favour if it can lead that change in terms of real incentives and alignment that combined public and private finance.  Second, after electricity and transport I see transforming steel as the next really big challenge. As home to the HQ of ArcelorMittal, that must be part of a national effort.”

The Journée de l’Économie is organised by the Luxembourg Ministry of the Economy, the Chamber of Commerce of Luxembourg and Fedil – The Voice of Luxembourg’s Industry –, in cooperation with PwC Luxembourg.

Info: jecolux.lu