Text of speech by Tan Sri (Dr.) Francis Yeoh, CBE
YTL Corporation Berhad
Climate Change Week 2008
3 May 2008
“Energy Security and Climate Change in the 21st Century”
SOLUTIONS TO CLIMATE CHANGE?
Keynote Speech by: Tan Sri (Dr.) Francis Yeoh, CBE
Managing Director, YTL Corporation Berhad
- Distinguished Speakers,
- Friends the Media
- Ladies & Gentlemen
Thank you all for joining us today for this exciting occasion, the second Climate Change business conference. One year on, we are still in the early days in terms of widespread commitment to addressing this issue. Despite the undisputable evidence, global warming is still perceived by many as some vague threat. Unfortunately, ladies and gentlemen, ignorance is not bliss.
We have to face up to the irrefutable reality of things, that climate change is indeed “An Inconvenient Truth” that we have to accept and act on today. I am really heartened by the recent AXA Life survey in early April 2008, which suggests Malaysians display higher-than-average concern on the subject of climate change and global warming, ranking fifth behind Thailand, Indonesia, France and Japan, as the recent survey on social attitudes and behaviour across 26 nations revealed.
The role of Technology as Solutions in tackling climate change
Ladies and gentlemen. I’m sure many of you followed the recent UN Climate Change Summit in Bali, which successfully produced an agenda for negotiation amongst countries, as well as a roadmap and deadline for tackling climate change in the next two years. One of the four key areas identified as a priority was the importance of technology and innovation in tackling climate change.
Over a decade ago, YTL began innovating ways to use clean technology, realising the implications of uncontrolled carbon emissions into the atmosphere, as well as exploring renewable energy sources, due to the heavy energy demands of the utilities and construction industries. For example, as a key utilities player, we insist that our equipment suppliers continuously work to improve their technology, not just because we demand it, but also due to the big consumer push for it.
Given the extremely urgent deadline (of just one decade) that we have to solve climate change, there is no doubt in our mind that technology is going to be a key “make or break” factor for the world.
Ladies and gentlemen.
Perhaps a few years ago, such achievements could have been written off as exceptions to the rule. However, major global trends in the last year or so are telling a very different story. In parts of Asia and across Europe and America, there is a boom in clean technology investments, thanks to increasing market interest and demand in this field.
In a recent issue of TIME magazine, clean tech was identified a prime target for the smartest — and richest — investors in the world. Green investment by American venture-capital firms reached $2.6 billion in the first three quarters of 2007 alone, the highest level ever recorded, and nearly 50% more than the total for the whole of 2006. In China, the country unquestionably set to be the world’s largest consumer of energy, almost a whopping 20% of all venture capital went towards clean companies in 2006 — double the percentage in the U.S. A recent UN Report also found that US$100 billion was invested in global sustainable energy projects, including mergers and acquisitions, in 2006. And western corporations are further keen to invest in Asian renewable energy.
Simply put, we have no doubt that energy and green technology is set to be the largest economic opportunity we've seen so far this century. The potential of clean tech as an investment opportunity has no ceiling. To quote my friend and famed Economist Jeffrey Sachs, “The defining challenge of the 21st century will be to face the reality that humanity shares a common fate on a crowded planet.”
Given the importance of technology and its role in tackling climate change, YTL would like to reaffirm its commitment to pushing for more investments in this field, as financial support and investor interest are going to be major success factors behind its adoption and widespread application. We are already keen principal investors of the Asian Renewable Energy Fund (AREEF) and now, are also investing in the Global Renewable Energy and Environment Fund (REEF), a global clean energy fund.
Considering that Asia is now contributing the most to global growth and unfortunately to global pollution as well, tremendous opportunities exist in the renewable energy and environmental sectors, especially as more affluent Asians are demanding a better environment to live in. These demands have led to the formulation of green policies and legislation, and these Funds not only hope to profit from these trends but also aim to cut carbon emissions whilst doing so.
We hope we will see strong interest from institutional investors in this field, as their support for the development and implementation of renewable energy and clean technology will have a major impact on how fast solutions to climate change are put into place.
ROLE OF BUSINESS IN CLIMATE CHANGE
I would like to explore this morning the role of businesses in the fight against climate change and the business opportunities of climate change.
The involvement and cooperation of business and industry is crucial if we are to curb the extreme effects of climate change. It is business that provides the sophisticated energy-intensive goods and services demanded by the voracious consumer appetites of the world’s burgeoning population. It is business that deploys the world’s production and logistical machinery that needs significant energy support and resource use. It is business that utilises the immense financial resources to fund the world’s desire and pressure for year-on-year economic growth. It is business, therefore, that will be required to act innovatively and responsibly to combat ecological and environmental concerns.
It is business, therefore, that needs to provide the myriad leadership examples to address the multi-faceted problems of climate change. Such leadership examples provide hope that we are heading in the right direction.
Today, the risk of massive and dangerous disruption to our global climate is a real and urgent one. Climate change poses a fundamental threat to the security and prosperity of developed and developing countries alike. So tackling climate change is now an imperative, not a choice; A problem for today, not tomorrow.
Energy is the NEW currency of economic and political power today and in the future. As such, businesses today need to think even more closely toward energy conservation – especially in the new energy economy. Energy conservation is not about using less energy, but using energy more efficiently. This means squeezing more work, more goods services, more wealth from each kilowatt-hour that we consume. As such conservation is less a question of morals or ethics than that of sound business practices – this is about maximising the profit we can make for each dollar or ringgit we spend on energy.
Then there is also energy demand. Countries, especially developing countries, can no longer afford to increase energy demand unconditionally. Developing countries with its increasing population and increasing use of energy per capita will need to be on its guard to manage energy demand. Governments need to think creatively about incentivising utilities how to manage use, and even to reduce energy demand.
This is the No. 1 priority for the economies of the developed world. Energy is crucial for giving the developing world the means to lift itself out of poverty. What are the business opportunities to develop distributed power generation opportunities - for example, energy generated at the point of use? Examples are local small wind farms for industrial parks, embedded solar generation for buildings, and other emerging technologies.
Climate change threatens our energy security in other areas, too. An increase in the frequency and severity of extreme weather events will threaten port and drilling facilities in our region with its impact on oil and gas supplies.
Climate security has a number of key dimensions, including food security, water security, energy security.
Climate change will bring more frequent and more prolonged famines threatening Malaysia and our neighbouring nations’ food security. Studies suggest that temperature rises of just 2-3 degrees will see crop yields in Africa, the Middle East and South East Asia fall by as much as 30 to 40 per cent.
As Malaysians have just found out, food prices are rising and this is an issue that is the top of our economic agenda for our nation.
Access to fresh water – and water security – is already a major issue across the globe. Climate change will make it worse. One billion people in the South Asian sub-continent are likely to suffer from a reduction in Himalayan melt-water and changes to monsoon patterns. South East Asia may also have significantly less rain. This is a real threat but also an opportunity to think creatively about using less water for food production, for power production, and so on.
We are therefore delighted that through Wessex Water, our water and wastewater treatment company in the UK, we continue to commit in researching ways to conserve and treat water, as well as innovate in sustainability, having just recently been the first water company to have been awarded the “Queen’s Award for Enterprise” in the UK.
YTL-SV Carbon announcement:
Sustainable development is a topic that is very close to my heart, and has been a core issue at YTL for many years now. It is not a “cause” that we simply adopted, but instead a commitment that hinges on our responsibility as one of the leading infrastructure conglomerates in Asia.
As I’ve shared on many occasions, we strongly believe that environmental protection is not only a moral issue, but an ethical responsibility. Across the Group, YTL has been working to reduce our carbon footprint by conserving energy, cutting carbon emissions, protecting natural resources, as well as supporting the development and implementation of clean technology in our companies and beyond.
This commitment is reflected in our low-emission, gas-fired combined cycle power plants, our award-winning Wessex Water treatment and supply operations, and the way we built our Pangkor Laut Resort around natural features and not through them, to mention a few examples. We are proud to say that we have been clean and green for several decades now, simply because we respect nature and believe in harnessing a culture of conservation.
Having already made strong strides in the areas of energy efficiency and renewable energy, it was a logical next step for us to get involved in CDM, or Clean Development Mechanism projects. Hence, earlier this year, we took a controlling stake in SV Carbon, the largest CDM consulting company in Malaysia and the third largest in South East Asia.
YTL-SV Carbon is headed by Soeren Varming, a pioneer in energy and CDM consulting, and renewable energy technology. To date, YTL-SV Carbon has undertaken over 20 projects in Malaysia, and has also commenced on consulting for projects in Indonesia, Thailand and China.
With Soeren Varming’s expertise and experience, combined with YTL’s strong commitment to nurturing clean technologies globally, the partnership will provide total solutions for CDM consulting in important sectors such as cement, power, water, agriculture, and renewable energy. And we are pleased to welcome you to the launch and preview of YTL-SV Carbon today, inviting you to learn more about what we do and what we can do for you and your organisation.
WASTE: The Golden Opportunity of our Generation
Waste – in all shapes, forms or mode – is the defining issue of our abundant generation! We produce more and more waste each year. Most of it comes from needlessly discarding and throwing away what we have spent enormous amounts of energy and precious resources in producing in the first place, most probably after a one-time use!
Put simply, waste is threatening the very survival of our planet – from waste that is causing air pollution to food pollution to water pollution. Waste is the root cause of many of society’s problems today and in the future!
Why are we here at this juncture in time? The indiscriminate and unsustainable use of our planet’s scarce resources through an industrial world powered largely by dirty fossil fuels that emits billions of tonnes of greenhouse gases and toxic materials (such as mercury) into the air, land and water is unsustainable in any shape or form for our planet and its citizens. Moreover, these resources are diminishing at a time when the world's population is growing exponentially.
Looking to the future, if we project that living standards and population double over the next 100 years, and if we assume the developing countries of China, India, Brazil and Indonesia share the same living standards as the developed world, our use of resources (and attendant waste that goes with the territory) will need to increase by a factor of 10 to 20 in the next century. It is quite impossible to imagine that we can increase industrial throughput by a factor anywhere near 10 let alone 20, considering the earth's dangerously depleted and damaged life-support systems (even without the dangerous effects of climate change!).
Therefore in addressing the problem of waste, businesses could address a number of strategic but inter-related issues at the same time. I have no doubt that the mega opportunities in the next 50 years will be the ones that address the issue of waste and its inter-related problems of energy and resource use. Can we simply and intelligently design goods that are “earth-to-earth” (not a one-way traffic from “earth-to-landfill”)? Could we move away from the fossil fuel-led carbon production machine of the past and the present while moving towards a sustainable route map to the future?
In tomorrow’s resource-constrained world that seriously addresses the problems of waste, business as usual is a dangerous strategy. Corporate and global leaders urgently need to embrace the planet-saving message of our future resource-constrained world. Society today resides on an impressive platform of a global infrastructure built on a diet of fossil fuels and carbon. Beneath the carbon and resource footprint of the world’s corporations, the foundations of the earth that they have taken for granted are disintegrating – including the dangerous effects of human-induced climate change and air, water and food pollution caused by a “winner-take-all” industrial and capitalist system.
Visionary leaders realize that a major industrial revolution is inevitable - a roadmap is needed to cross the chasm to a new economy that relies less on resources and a license to operate that is not based on a mantra of “take-use-discard”. A new strategic and industrial vision is necessary, but even these innovative leaders struggle to visualise what it could mean for them. Meanwhile, others have not yet even realized that they need an exit route out of our present diet of dirty fossil fuels.
What is the new vision? How can we reverse the trend? I recommend “WASTEnomics” – a unique book and a first step towards the impending Industrial Revolution that will re-shape our view of waste in our resource-constrained society. I am pleased to announce that this book will be launched this week in conjunction with Climate Change Week.
But this will only be a starting point. The impending revolution in our industrial and capitalist systems that will move us away from a diet of fossil fuels and unlimited resources requires vision, genius, energy and creativity from all citizens of all nations. The future belongs to those who understand that doing more with less of our precious resources is common sense and compassionate, and thus more intelligent and competitive. The prize is a huge one for the sake of the planet. Visionary leaders must aim for nothing less.
Climate change threatens the security and prosperity of every person, every business, every community on the planet; Tackling it will require us all to play our part. There are many examples from the ground up of what businesses and cities can do to address climate security. From large corporations to small start-ups, from CEOs to frontline employees, from mega cities to small communities across the world, each can play his or her part in meeting this global threat.
Climate change is a business opportunity and a threat. How we address this depends on how we view it. This is an enormous business opportunity, which if we build our expertise in these areas in the future, will see us as prime leaders in our region.
Ladies and Gentlemen,
It is time to make a choice. When you have to make a choice and don’t make it, that is in itself a choice!
May God bless you in your deliberation and endeavor in this area.