Address by the Minister of Ecology Ségolène Royal Investors Summit on Climate Risk United Nations – New York
Discours de Mme Ségolène Royal, mercredi 27 janvier 2016 à New-York
Good afternoon, dear friends,
I am delighted and honored to participate in this very important event.
I would like to pay homage to the remarkable leadership of Ban Ki-moon,
who was instrumental in the success of Paris
thanks to his unwavering commitment
going back many years.
For France as chair of COP21,
this Investor Summit on Climate Risk
is a galvanizing step.
The Paris agreement is a historic moment for the planet.
It has given rise to huge hope.
The question today is how to deliver after this momentum.
Just after the barbaric attacks that struck our country,
we were extremely grateful to those leaders
who immediately announced they would confirm their presence in Paris,
especially president Obama,
whose announcement undoubtedly led to that of many others.
I truly believe that if business and finance delivers,
we will succeed in implementing the Paris agreement.
I sensed, during the 140 events I participated in at COP21, that something was happening.
I deeply believe that for the time in the history of business and finance,
the interests of the business sector is perfectly aligned with the need to fight climate change.
Up until now, the economy and the environment were seen to be hostile to each other.
The time for reconciliation is now. For three reasons :
1. First, no country is immune to climate change.
This climate risk is an economic risk. It is the greatest challenge our economies face today.
twenty cities of more than 10 million people
are directly threatened by the rising oceans.
Another example :
climate migrations surpass migrations due to wars.
Climate change is the key security issue for our world today.
Yet, the business community needs stability,
which is another reason for getting involved.
2. Secondly we know that failure to act is costly
and the more we wait, the more it will cost.
That means that the climate change risk
is the number one economic risk for the world.
This is yet another reason for the business sector to get on board.
3. Three, actually, we know that climate action is good for business.
Of course, acting on climate requires investment and financing,
but it is also by far the most profitable and most cost effective solution.
Many companies understand that perfectly well.
This is a major tipping point.
Having made these observations, we now have two major problems to solve :
how to set a price for carbon
and how to handle the low cost of fossil fuels
I. So first, we need to set a price for carbon.
I heard Ban Ki-moon this morning
calling for setting a price on carbon.
I remember the Climate and Business Summit
last May in Paris to prepare for CoP21.
I heard for the first time private sector companies demanding a price for carbon,
in order to strengthen their investment
in the low carbon economy and renewable energy.
In Paris in July, more than 2,000 scientists from all over the world
demonstrated with irrefutable evidence that climate change was a worsening reality
and that there’s no room for doubt.
For the business sector that relies on certainty, here’s a certainty.
At COP21, during the Focus Business Event,
with Ban Ki-moon, John Kerry and over a hundred decision makers and investors,
some of whom are with us today ,
we again called for carbon pricing,
But as it is not possible to have a universal carbon price,
the idea of a price window between a bottom price and a higher price was raised.
We know it is not easy for companies to integrate the long term climate cost,
which is why we need a carbon price,
to give companies the ability to manage the long term cost and give them an incentive to invest.
As France was hosting CoP21, we were dedicated to offering our solutions, which is one among many.
Last August the French Parliament adopted a law on energy transition for green growth,
which I promoted.
a. First of all, I introduced the concept of transparency into investor portfolios
I decided that specific provisions on transparency should be included in the law.
Large investors will have to explain their carbon footprint.
the exposure of their assets,
the measurement of the greenhouse gas emissions associated with those assets,
and their contribution to limiting global warming and to the energy and ecological transition.
Many companies, some of which are present here, already do such reporting.
I call upon the entire investment community to undertake such reporting.
b. Secondly, I have also made some progress on carbon price
France set the carbon price at 22 euros per tonne this year,
and it will reach 56 euros by 2020
and 100 euros by 2030.
This increase in taxation is offset
by lower taxes for products and revenues
that contribute to the energy transition.
This carbon price setting is in addition to what we are doing
with our carbon market at European level.
To meet our target of a 40% reduction in greenhouse gas emissions by 2030,
we are relying partly on ETS, the Emissions Trading System.
The challenge is to drive up the price per tonne of CO2,
which is currently too low at 8 euros per tonne.
I noted with great interest that American corporations asked for a carbon price to be set
in their “Business for Innovative Climate and Energy Policy” statement, an initiative of Ceres.
19 states and dozens of large companies are part of the carbon leadership coalition, put together during CoP21.
Emissions of green bonds have met with initial success.
Sixty countries and regions are paying for CO2
through taxes or carbon markets.
Many companies are working with their own carbon price.
California has formed a market with Quebec and Ontario is about to join in.
China is preparing to create a domestic carbon market next year.
And, before COP21, France announced
the end of State guarantees for export projects to build coal plants.
This decision also sends a clear signal to investors.