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Running out of time

Acting now to avoid environmental breakdown

The latest report from the Intergovernmental Panel on Climate Change (IPCC) compiled by the world’s leading climate scientists has warned there is only 12 years left to keep global temperature increases to a maximum of 1.5C above pre-industrial levels and avoid catastrophic environmental breakdown. The authors said urgent and unprecedented changes are needed to reach the target.

“This is the real story of climate change”, says KPMG's Dublin based Global Head of Renewables Mike Hayes. “This is the single biggest issue that has ever arisen in my professional and personal life. What they are saying is the time for talking is over. We’ve got to act now or else it will be too late. The question is if we are going to do anything different in response and, if we are, what?”

Mike Hayes believes the situation is far from hopeless. “If we take action in a few key areas we can succeed”, he says. “The first is government policy. This is at the crux of the whole issue. Ultimately, the whole approach of criticism governments for inaction is pointless.”

Governments respond to electorates, so it is up to citizens, the business community and other organisations to drive change.

He points to relatively simple actions which governments can take to encourage greater investment in and use of renewables. These include favourable subsidy and tariff regimes for renewable energy and the removal of barriers in the planning system.

Sources like offshore wind still face challenges in Ireland while the rest of the world moves ahead, he notes. “Taiwan now has a viable offshore wind industry having started only a few years ago. Japan, the US, and Korea are also investing in it. Ireland has the best conditions in the world for offshore wind yet we are lagging behind. We have to address that.”

Hayes was involved in setting up a new grouping which represent all strands of the renewables generating sector as well as consumers and various other stakeholders. RECAP (Renewable Energy Consumers and Producers) was established to help influence the sustainability agenda in Ireland.

“The great thing about RECAP is that it is completely technology neutral”, he says. “It represents all strands of the industry as well as consumers. It is only bringing all sides together that we will achieve the results we need.”

Mobilising capital

The next area to address is the mobilisation of capital to deal with climate change. “It’s not just renewables, it’s energy efficiency, it’s fossil fuel companies investing low carbon technologies”, he notes. “There is more than sufficient capital available it’s just a question of figuring out how it to mobilise it for this purpose.”

Progress is being made on this and the announcement of a Green Bond in the 2019 Budget was a significant step forward for Ireland. “Ireland is doing a lot of work on this”, says Hayes. “Sustainable Nation held an event in London recently where people from the green finance sectors in Britain and Ireland got together to discuss the issue and explore solutions.”

“We don’t have nearly enough innovation in the climate change area. If you compare it to digital and look at the unbelievable impact innovation has had on our lives in recent years you can see how far we have to go.”

Innovation needed

The third key area is innovation. “One thing is absolutely clear”, says Hayes. “We don’t have nearly enough innovation in the climate change area. If you compare it to digital and look at the unbelievable impact innovation has had on our lives in recent years you can see how far we have to go.”

The problem is that the innovators are not being supported. We need to have the right funding structures and incentives in place for the innovators.”

KPMG is playing an active role in developing those structures. “We have taken on the challenge of solving the innovation conundrum. We are working as part of a coalition with the World Economic Forum and Mission Innovation on the issue. We are looking at a number of ideas including the establishment of a global innovation fund for sustainable energy.”

While the challenge presented by climate change is enormous he is heartened by some recent developments. “A really interesting phenomenon at the moment is how global corporations like Facebook are transitioning to 100 per cent renewable energy over a set period. I’m optimistic that there is a growing coalition across the world to tackle the problem. We have no choice now that the problem has become so serious and we are going to see policy changes at global, EU, and national level.”

The Intergovernmental Panel on Climate Change (IPCC) has warned there is only 12 years left to keep global temperature increases to a maximum of 1.5C above pre-industrial levels to avoid catastrophic environmental breakdown.

“We will see higher carbon taxes. There will be increased incentives for renewables. The millennial generation will create greater pressure from consumers to accelerate the transformation to a low carbon economy. The cost of renewable solutions keeps falling and we are very close to grid parity where there will no longer be any need for subsidies or incentives. But we still need to drive change in the areas of government policy, mobilisation of capital, and innovation if we are to succeed in meeting the challenge set by the IPCC.”

Achieving major reductions in the use of fossil fuels is essential if Ireland is to secure the major cuts being sought in GHG emissions. In addition, improvements in energy efficiency, coupled with widespread use of alternative energy sources, will also be needed.

The Environmental Protection Agency

Mike Hayes is KPMG's Global Head of Renewables

This article first appeared in The Irish Times and is reproduced with their kind permission.

Mike Hayes

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