By Tirthankar Mukherjee
It should be no surprise that mining companies – or, for that matter, all companies that have to keep shareholders (which means us) happy when dividends are declared – do not like environmetal activists, whom they see as busybodies restricting their revenue-earning pursuits. Even then, it was somewhat drastic of the Behre Dolbear group to warn miners some time ago in its annual risk assessment report that they should be ready for opposition to their legitimate activity from all sorts of disgruntled and destrucive elements masquerading as environmental groups. I am generally on the side of environmentalists but am aware that some of their demands on industry are difficult to concede, if only because the world is not an ideal place, and will never be one, and not just because of industries.
Concerns about climate change, however, seem to command more respect, with more tangible evidence more scientfically presented by groups with more authority. However, even here, miners are seen as waiting and watching, rather than being proactive. A recent global survey among the mining sector, called ‘Responses to the Climate Change Debate’ and conducted by the Netherlands-based financial services company KPMG, reveals ( and I get my information from a report in the Mning Weekly) that only a few companies have been implementing sustainability measures while others cite the lack of a business case to introduce any response. Less than 20% of the global mining sector players surveyed considered climate change important enough to demand new initiatives. Almost 50% reported that their companies had not quantified the potential cost of climate change on their business. Some indicated that they were waiting for better market signals before making any decisions.
The survey looked at mining companies in North America, the Asia Pacific region, Africa, West Asia and South America with about 60% of companies working with market capitalisation of $1 billion or more. Some 60% of respondents said they had not implemented structural changes to address climate change issues, while over 60% had not measured their carbon footprints and did not factor in climate change when dealing with suppliers and customers. Only 30% of those surveyed were considering changing their policies because of climate change issues. Some felt that the small size of their operations made such core changes unnecessary.
A KPMG official said in his introductory note to the survey report, “Despite a growing number of scientists and government agencies arguing that climate change is a real threat, and the International Council on Mining and Metals (ICMM) recognising that sustained global action is required, the global survey findings highlight that there are significant differences in opinion among senior mining executives about the issue.”
The survey makes a number of recommendations on how the mining sector can mitigate and adapt to climate change. These include the need to make climate change a strategic and fully integrated part of corporate policies, new initiatives, acquisitions, supplier relationships and business models. The development of strategies that identify and quantify opportunities and risks related to climate change were also recommended, as well as ongoing dialogue with stakeholders, suppliers and business partners.
Now for some more heartening news, which I get from the lournal Nature Geoscience. If you thought the recent financial crisis, which nearly broke the backbone of the world economy, was all gloom, think again. The dip in industrial activity in 2008-2009 — when the global recession was at its height — could do what climate change negotiations for nearly two decades couldn’t: bring down, albeit briefly, CO2 emission, a major culprit behind the trapping of heat in the atmosphere. Global CO2 emissions decreased by 1.3% in 2009, while it had risen by 3.4% every year between 2000 and 2008.
However, as economies recover, the emission rate too is bouncing back. It is expected to grow by more than 3% in 2010, says the study led by Pierre Friedlingstein, a mathematician at the University of Exeter in the UK, who specialises in developing mathematical models of climate change. “The reduction was 0.1 billion tonnes of carbon (out of a total of 8.5 billion tonnes), that is, about four days of world emissions,” he says.
Leafing through recent emission data of major countries, the study stitches together a realistic picture of their economic performance during the difficult years. Japan with a 11.8% cut in its CO2 emissions in 2009 was the worst hit, followed by the UK (8.6%), Russia (8.4%) and Germany (7%). The US economy was a notch below, with its CO2 emissions coming down by 6.9%.
China and India, on the other hand, are marching ahead with development and hence burning more fossil fuel. CO2 emissions from China grew by 8% in 2009 while India contributed 6.2% more than in the previous year. Similarly, South Korea experienced a marginal increase of 1.4% in its carbon emissions.
The scientists, however, say the 2009 dip is disappointing; the figures were smaller than expected. A study, involving several researchers participating in the present work had projected in December 2009 a drop of 2.8% during the recession. There are two reasons for this. First, China, India and other emerging economies witnessed a higher GDP growth in 2009, which helped economies around the world recover slightly. Therefore, while economists had expected global GDP to drop 1.1% owing to the slowdown, the actual figure was only 0.6%. Second, there was only a marginal reduction in carbon intensity (amount of carbon by weight emitted per unit of energy consumed) in 2009 as compared to 2008. That’s because the better performing economies of 2009 — China and India — have relatively higher reliance on coal than the developed nations.
Building on what a growing number of economists and policymakers have proposed, Friedlingstein says there is a need for many developed economies to adopt “low growth or no growth” economic models. The model he has forwarded shows how his country, Canada, can increase employment, reduce poverty and greenhouse gas emissions and manage government debt, all without economic growth. The cornerstone of his model is a 15 per cent reduction in work hours in a year, by 2035. As labour productivity continues to rise moderately, a shorter work year will not affect the economy, he says.
It’s high time developed economies charted a course towards living within a fair share of the planet’s safe operating space. And developing countries, in their turn and time, would also need to adjust. This may help growth go green. “The drop in global emissions in 2009 was extremely brief. The key to sustaining decreased CO2 emission is to decouple CO2 emissions from economic growth,” says Corinne Le Quere, professor of environmental sciences, University of East Anglia, and a co-author of the papers. One way out is to increase the share of renewable energy in the energy mix.
There are more discernible trends. According to the study, CO2 emissions from deforestation and other land use changes have declined, compared with the position in the 1990s. This is mainly because of less deforestation in tropical countries and an increasing, yet marginal, forest regrowth elsewhere. Similarly, despite the drop in overall emissions, that from fossil fuels and cement production in 2009 was the second highest in human history at 30.8 billion tonnes of CO2, just below the 2008 emissions.