Climate change... Can Guernsey clean up?
Given its relative size, Guernsey’s quest to impact global climate change by decarbonising its economy will be limited. However, as it has shown throughout history, Guernsey is very good at adapting to changing economic circumstances to effect impact above its weight. In the past, this has occurred variously in quarrying, agriculture, tourism, technology and of late finance. Tomorrow’s Institute of Directors Guernsey Branch Convention will look at the risks, responsibilities and opportunities that the climate change challenge presents for Guernsey. The IoD’s view is that while Guernsey is geographically small, it nevertheless has the potential to influence and drive significant positive change.
Climate change is big business. Recent analysis carried out by the United Nations and the Global Commission on Adaptation suggest that the global cost of initiatives to help restrict global warming to within 1.5 degrees of pre-industrial revolution levels will be in the order of US$2.4tn per annum over the next decade. The return is estimated to produce net annual benefits worth more than $7tn.
These are eye-watering numbers. The world is awash with cash, both public and private, looking for opportunities to be associated with climate change mitigation and adaptation projects, research and initiatives. This is where Guernsey, if it is clever, can look to capitalise on these investment and financing opportunities and at the same time help reposition itself in the world as a clean green economy that is helping to mitigate and adapt to the effects of global climate change.
At last year’s IoD convention, world country-branding expert Simon Anholt explained that if Guernsey wanted to rebrand itself from the oft-quoted but misguided ‘tax haven’ descriptor, it needed to change what it was giving to the world.
No amount of marketing will in itself change the world’s perception of Guernsey. Before Guernsey is seen as an international exemplar on climate change it needs to genuinely embrace an island-wide strategy of making Guernsey the clean green island of the world. In short, Guernsey needs unquestionable authenticity in adapting and mitigating the effects of climate change.
The aim of the IoD convention is to raise debate to help shape and drive government policy in the area of climate change and to explore opportunities for private investment and job creation for the Guernsey economy.
Measures in which the government has a direct involvement include energy policy and ways to increase the use of renewable energy, improving energy efficiency of infrastructure and appliances, adopting carbon neutral policies that help reduce CO2 emissions and implementation of practices and procedures to reduce emissions from agriculture and landfill sites.
If Guernsey is to be a serious influencer on the global environmental stage, then it is imperative that its green credentials are authentic and aspirational. If done right, Guernsey’s standing in the world can be redefined, but only if all stakeholders including the government, business and residents embrace the vision of making Guernsey the global ‘Green Island’.
I am a great believer that human ingenuity and advancement in technology will help solve the challenges of climate change.
The reality is, the idea that rapidly transitioning off fossil fuels to renewables alone is the saviour of the world is fanciful. It’s just not that simple or practical. Wind turbines and solar panels take up massive amounts of space and, as an energy source, they are intermittent and unreliable. The reality is that the world doesn’t yet have the technological solutions that are needed to meet the Paris Agreement targets, let alone exceed them in the required time frame.
What is urgently needed is more investment in green research and development to discover and develop revolutionary solutions to combat climate change without adversely impacting on human advancement and the quest to eradicate world poverty.
This is the real sweet spot for Guernsey. Guernsey’s finance and legal sectors provide the ideal platform to position themselves as providers of products and services associated with financing some of the trillions of dollars of global climate-change mitigation and adaptation programmes, research and initiatives being considered in the areas of warning systems, infrastructure, improving dry-land agriculture, restoring and protecting of mangroves and water supply.
It’s also an area where Guernsey is already active. Guernsey Green Finance and the Guernsey Financial Services Commission have established the Green Fund as the world’s first regulated green investment fund product while The International Stock Exchange has established TISE Green a market segment specifically for green investments. Other areas that can be explored include listing and trading of carbon credits and Green certification. Significant scope exists for insurance-linked securities and disaster/catastrophe bonds to insure and mitigate against arising issues and the use of Guernsey innovation and development funds for direct investment into Guernsey infrastructure such as the Belle Greve turbine marina, seaweed farms, infrastructure/climate-change cells or use of Alderney as an alternative energy sector, to name a few.
International finance markets and businesses are waking up to the potential for the financial windfall that alignment of their business model to environment and government climate-change policy and investment can bring. Put simply, embracing climate change makes good business sense. Guernsey’s nimble and responsive regulatory regime is ideally suited to respond to take advantage of the ‘rivers of gold’ that are flowing into green finance and climate-change adaptation projects and initiatives.
History has shown that early adopters of emerging trends tend to ride the wave of success longer and deeper.
The IoD 2019 convention aims to explore the opportunities and risks associated with climate change and to look to discuss whether Guernsey needs to do more in the area of progressive energy policy to highlight the island as a responsible global citizen that is committed to contribute to a sustainable future for the global community. As the IoD’s convention theme alludes, this looks like an ideal opportunity for Guernsey to clean up.