More Development, Less CO2, Some Sustainable Investment

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...And we're back. After a hiatus we are back tonight with a headful of talking heads. Investment in adaptation and mitigation in emerging markets, especially Africa, is a huge ask in the current economic context. Hard to find sustainable investment in 2009, though not impossible. Your newspapers like ours have probably been covering the posture by India that they will make no emissions-related limits at the UNFCCC Copenhagen meeting. Recently South Africa adopted a similar position. Mail & Guardian, an independent and respected weekly paper in southern Africa, hosted a third of their Shell Global Energy Dialogues within the M&G Critical Thinking Forum. Tonight we had 4 covering carbon emissions management. The purpose pointed toward policy options for emerging markets. One of the most respected legal thinkers in South Africa, Judge Dennis Davis, moderated the event – he has a good balance of wit, intellect and good spirit. He is telegenic for nerds.

Zapiro's G20 climate change cartoon had me chuckling this week in M&G . The title, More Energy, Less CO2, was immediately reasserted to “More Development, Less CO2” by the first speaker, Stefan Raubenheimer from SouthSouthNorth. Long term mitigation plans have 2050 as a magic timeline. For South Africa, this implies no coal in 2050. But like Australia, US, China, coal is the regional energy mainstay. One of my favourite statistics lately is the replacement cost of the energy sector in SA, the largest economy in Africa, around ZAR 1 trillion . Not a small number. Second speaker Richard Worthington of WWF presented how the UNFCCC 2007 fourth report understates the scenario and the reality in sub-Saharan Africa. Climate change is happening faster than scenarios predicted. Faster loss of sea ice. Increase of sea level rise. That is always going to have the audience sitting at a busy port feeling a little uncomfortable.Richard's colourful comments helped the debate steer away from boring!

Mr Worthington spoke of ecologicial footprint. He touched on ESKOM’s lack of coal power plant provision being linked more to water than anything else. He controversially quoted from some environmental impact assessment report by consultants to a new power plant in the Waterberg by quoting “the exploration of alternative energy is not realistic”. Mr Worthington referenced the situation of investors in a board room thinking beyond a four year horizon and toward returns to their children’s generation. Pity he did not take further the institutional investment thinking. Nor did he tie together what investment horizon should better be considered for weighing investment decisions that cover environmental, social and governance factors. But it was insightful that the local affiliate of an international environmental NGO referenced sustainable investment.

Prof Davis sharpened the debate by suggesting that developing countries should not even embrace climate issues, with development and job creation being much more important. Stiglitz's arguments about GDP reared their heads This reflects very much the survey of sustainable investment in 2007: job creation trumps saving penguins. In an upcoming project we at SinCo are working on, together with asset consulting and analytics firm, RisCura, and an international financing organization, we will be surveying attitudes and actions around sustainable investment in sub-Saharan African in Q4 2009 and Q1 2010. It will be interesting to see what the reality is on the ground in this unsettled time in history and in changing the conceptualization of sustainable investment. More on this debate soon.