Climate change – hit hard, early and often

Ulrich Boettger, Director of BASF Hong Kong, lays out a plan for how one company aims to aggressively combat man-made climate change.

Photo credit: Chris Lusher


With the headlines expounding on yesterday’s news, it’s easy to lose focus on what is critical for the longer term. And what is critical for the long term, at this moment in time, is setting an unswerving path for a low-carbon economy for Hong Kong & the world.

The Paris Agreement was successfully negotiated and concluded in December 2015 and came into force on November 4. The Agreement marked the first time that the world committed to ambitious efforts to limit global climate change to less than 2°C above pre-industrial levels. More than 110 countries, including economic powerhouses and big emitters, including China, the US, the EU, India, and Brazil, have ratified it – not a moment too soon.

The Intergovernmental Panel on Climate Change (IPCC), which tracks and predicts the effects of climate change, reports that extreme weather is increasing the frequency and strength of heat waves, droughts, floods, and wildfires, impacting animal species, plant life including vital crops. With 15 of the 16 hottest years on record occurring since 2000, these trends are set to continue.

In Asia, the risksare stark. The Asian Development Bank (ADB) predicts that unmitigated climate change may lead to economic loss of 10% of GDP by 2100. Yet investment in low-carbon technologies and policies can deliver substantial benefits. According to Juzhong Zhuang, ADB Deputy Chief Economist, the “ADB estimates that the region can generate more than $2 in gains for each $1 of cost it bears to reach the Paris goal — if the right steps are taken.”

 

Move fast, move now

Achieving this will require financial commitment, technological deployment and capacity building at a level and a speed never before achieved. Government agreement is the first step. What must happen next is development of a global carbon pricing system to ensure that climate protection is introduced in a systematic and cost efficient way. There are ways to introduce economic mechanisms that bolster, rather than thwart, competitive markets. These must be found.

To a large extent, it will be companies which design and implement a low-carbon economy. Companies will provide the essential hardware: technology to source low-carbon energy, materials to build or retrofit low-carbon buildings, consumable goods made from environment-friendly materials, and systems to deliver it all efficiently and effectively.

As McKinsey has famously noted, much of the technology needed to curb climate change already exists. Unfortunately, even cost-effective technologies have not yet been fully exploited. What’s needed now is leadership in action: demonstration and replication of systems that operate in low-carbon, resource-smart ways.

BASF’s commitment starts with our own plants. We design and operate the world’s largest Verbund sites – integrated chemical production facilities where waste products and waste heat from one process feed into the next. Optimizing plant design, waste and energy flows, logistics and infrastructure saves more than 6 million metric tons of CO2 emissions and €1 billion a year.

We are also committed to bringing low-carbon products to the many industries we serve. Climate protection products sold by BASF in 2015 enable our customers to save 530 million tons of CO2. Much of this was in insulation and building materials. What’s next? To determine next steps,  we analyzed more than 60,000 product applications for their contribution to sustainability – the largest such analysis ever done. Products with the highest contributions to sustainability along the value chain were called Accelerators. Many of these deliver energy savings or climate protection, along with other benefits. We set a goal to raise the proportion of sales from Accelerator products to 28% by 2020, and have already passed the 26% mark.

The world is currently on an unsustainable path. As a leading chemical company, BASF is mindful that our role in the present system translates into a responsibility to affect change.

I am convinced that BASF’s future is at the intersection of sustainability and innovation. The same is true of the world. Working across industries and geographies, united in commitment and vision, we can fight climate change, promote prosperity and create the conditions for a sustainable future – Hong Kong and the world.