Andrew Mitchell: Coping with climate change and natural disasters
Andrew Mitchell's speech held at Willis Re focussed on helping poor countries to build up their resilience to the impacts of climate change.
Thank you Rowan and thank you to Willis Re for hosting us all this evening. It’s wonderful to be able to address you here. Willis Re has a proud history that spans nearly two centuries. During its lifetime, it has seen the world change beyond recognition.
The most fundamental and far-reaching of those changes have been man-made. I think, in particular, of the Industrial Revolution and all that has been achieved since then. And I think too of the emergence of climate change as one of the great challenges in human history. How do we keep growing, continuing to raise living standards but in a way that protects, not threatens, the world’s poorest people? It is this question that I want to address tonight.
Coping with the impacts of climate change
As Secretary of State for International Development it is clear to me that we have to face up to the reality of climate change by preventing global warming rising above a global average of 2 degrees. This will be a real challenge. Even if we succeed, we know that it is already too late to change some things, and we will need to deal with serious consequences for the foreseeable future.
These consequences will hit the world’s poorest people first and hardest. Building their resilience to more frequent and intense extremes in weather is essential. The alternative is unacceptable: more people without access to water, more people going hungry, and more people at risk from droughts and floods.
Tackling climate change is not only the right thing to do it’s also in our own interests. The renowned economist, Lord Stern, estimates that the economic cost of unmanaged climate change could be between 5-20 per cent of global GDP. That contrasts with a 1-2 per cent cost if we keep emissions at safe levels and support developing countries to adapt. The economic sense is plain to see.
Disaster risk and climate impacts
As we will hear, the Inter-governmental Panel on Climate Change’s Special Report on extreme events suggests rising temperatures could mean more floods and more droughts - damaging critical infrastructure and prospects of growth for all. The recent review of DFID’s humanitarian and emergency response work includes predictions that climate-related disasters could affect up to 365 million people every year by 2015 - an increase from 263 million in 2010.
This matters not just for poor people and poor countries, but for Britain too. We cannot have food security, water security, energy security - or any form of national security - without climate security.
The UK government is seized of this issue and we’re as ambitious as we are restless. We’re responding with significant, focussed and effective programmes that will achieve real results. We’ve already approved significant programmes through our International Climate Fund. At the same time, we’ve put building resilience at the core of all our country office work and shown real leadership on the international stage.
In Bangladesh, for example, we’re helping at least 15 million poor people cope with the impacts of climate change and natural disasters through improving early warning systems. When I visited Bangladesh in January I saw for myself how we are piloting the use of text messages from mobile phones to warn people of cyclones or floods and help them take steps to protect their families.
I saw how we’re helping to build dozens of multi-purpose cyclone shelters. These serve as primary schools by day, but offer vital protection during and after disastrous weather events, and the area underneath can be used as a market place. Innovative design also means rainwater is harvested to provide safe drinking water, and solar power provides energy for lighting.
I spoke with families, who lost their homes in a cyclone in 2009, and have been living in temporary shelter ever since. With UK support they are now moving in to newly built cyclone resilient houses, raised on platforms above the flood level. This is an innovative approach, working with a whole community and seeking to protect lives and livelihoods when disaster strikes.
These efforts are leading to real results. With early warning systems in place, people can evacuate to safe cyclone shelters, hours before any cyclone makes landfall. This has drastically reduced death tolls from cyclones - there were 300,000 deaths from Cyclone Bhola in 1970, compared with 3,000 in November 2007 during Cyclone Sidr. In this latest event, cyclone shelters protected one and half million people.
In Africa we’re showing a quarter of a million farmers how they can benefit from using climate-smart farming techniques like conservation agriculture, zero-tillage techniques and agro-forestry. Our work with the Met Office Hadley Centre is improving the reliability of forecasts that predict the onset of Africa’s rainy seasons, enabling local farmers to secure a better crop and get the maximum return on their precious investment.
But more is needed. Through the International Climate Fund we will help some of the world’s most vulnerable people, tackling head-on challenges such as water resource management, agricultural productivity and making urban populations more resilient.
Not only will this help protect some of the hardest-to-reach people, it will also make the world a safer and more prosperous place in which to do business, providing opportunities for British know-how, innovation, technology and financial services.
As part of this focus on resilience, this Friday in Washington Helen Clark - Head of the UN Development Programme - and I, will be hosting the first meeting of a group of Political Champions for Disaster Resilience.
This is an issue that demands greater international attention and investment. Top of our agenda are:
- improving the assessment and financing of disaster risk
- stimulating longer term investment in resilience in the Horn of Africa and the Sahel and
- getting donors themselves to become more effective at integrating disaster risk into their own programmes.
Public and private cooperation
Of course, while public finance is important, indeed, vital, it’s not the whole picture. The massive investment needed to tackle climate change can only be supplied by the private sector. We must play to our respective strengths. Public finance can unlock private innovation. When I was in Davos earlier this year, I launched an exciting programme to deliver clean, renewable and efficient energy, new technology and protect natural resources in emerging and developing countries. It means that every pound of British taxpayers’ money invested has the potential to generate £30 of private climate-friendly investment.
I want to see more programmes like this, programmes that combine innovation and investment, transforming economies and increasing resilience to climate change. Our soon-to-be-launched Global Resilience Action Programme and our strategy for humanitarian and resilience research will allow us to build productive and exciting new partnerships with the private sector.
UK climate finance also provides huge opportunities for the private sector to invest profitably. UK funding has already been part of a number of success stories, from the flood-resistant rice that has the potential to help 18 million farmers in Asia, to the drought-tolerant maize that is a staple for over 300 million people in Africa.
We know too that the private sector is at the forefront of adapting businesses to the impacts of climate change. We can learn from that experience. Public finance can then help to encourage the private sector in developing countries to adopt this best practice, and to develop affordable products, like insurance, which can be made available more widely. The Agricultural Insurance Company of India, for example, has used index-based insurance to enable 700,000 farmers to take out cover against inadequate rainfall.
Or look at the Caribbean Catastrophe Risk Insurance Facility. Supported by UK climate financing, the Facility is a public-private partnership designed to limit the financial impact of catastrophes. So, when a hurricane or cyclone hits, policy-holders can access much-needed cash quickly and easily. Similarly the International Climate Fund is financing the design of the African Risk Capacity facility, a ground-breaking facility that could help African Union member states resist and recover from the ravages of drought by transferring risk away from African governments to the international financial markets.
In short, for those with entrepreneurial flair and vision, commercial opportunities are out there. The Economist Intelligence Unit surveyed over 700 global businesses last year, half with annual revenues above $1 billion. Over 60 per cent of them considered adapting to a changing climate to be primarily a commercial opportunity; with a fifth already generating new revenue from it. Almost half were seeing firms in their sector creating competitive advantage as a result.
And it’s on this note that I want to end my comments tonight by urging you to think about the opportunities that are already being grasped. It really is possible to help some of the poorest and most vulnerable people in the world, while also turning a profit for your shareholders. It’s time that the public and private sectors engaged more effectively to make investment easier and more attractive. The science is clear, the economics makes sense and the commercial opportunities are there.