Climate Change

The great challenge for democracy &

Why China will lead

The background & assumptions

Global population since 0 AD (bn)

5

10

Adam Smith’s

Invisible Hand 1776

Pop 900m

End Second

WWII

Pop 3bn

Current 6bn

0

5

Meyer Amschel

Rothschild was born

1744

Pop 784m

Source – United Nations

Pop average of 240m in 1st Millennium

Global temperatures

Met Office report, Nov 09

• 5 yrs work, 66 scientific institutions

• Emissions need to be cut to zero by

2100 to limit to 2C of change

• “Europe is currently on track to

experience a rise in average

Agreement diminishes with distance from the science

95%

70%

40%

% of people who agree

experience a rise in average

temperatures of 4C by the end of the

century”

Scientists Mainstream

press

Online

comments

Source – An informed guess

• Increasing number of countries considering cap & trade

• The technology is emerging

• Insurers are quantifying the costs

• 8th Nov 09 – Spain > 50% of electricity from wind

Momentum is building

Ways we can solve climate change

Low risk High risk

Carbon management Geo-engineering

Democracy and climate change

People are looking to government for answers

Source - HSBC

• Record energy sector lobbying

in Q309

• Oil & gas, utilities - $261m

• Environmental groups - $16m

• Alternative energy - $23m

But public opinion is waning as policy D-day approaches

91%86%

83%

75%

79% 78%75%70%

80%

90%

100%

Those seeing evidence of Global

Warming in US

53%59%

62%

49%

35%

0%

10%

20%

30%

40%

50%

60%

2006 2007 2008 2009

Dem

Ind

Rep

• Complex science

• Global issue

• Symptoms are slow to arrive

• An absence of “necessity”

• Are you willing to ignore public opinion?

Only the brave need apply

China – from problem to catalyst

6.15.8

3.94

5

6

7

Biggest CO2 emitters by 2006 emissions (Trn tonnes)

1.6 1.51.3

0.80.6 0.5 0.5 0.5

0

1

2

3

Source – United Nations

2007 Emissions / capita (tonnes of CO2)

19.8 20.2

18.7 19.1 18.919.9

19.318.8 18.9

North America Europe China

8.69.1

8.3 8.4 8.2 8.3 8.3 8.3 8.1

1.2 1.4 1.6 2.02.5 2.4

3.9 4.3 4.6

1975 1980 1985 1990 1995 2000 2005 2006 2007

North America Europe China

Source - IEA

% of energy coming from renewables (selected countries)

6%

2%

8%

9%

Germany

UK

US

China

40%

30%

20%

10%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Sweeden

Finland

Denmark

France

Source - Guardian newspaper & EIA

• Rising human-related emissions are

causing severe climate change

• Environmental pollution costs of

US$74.9 billion in 2004, 3% of GDP

• Forecasted temperature rises of 1.3-

2.1 degrees C by 2020

National Assessment Report on Climate Change, 2006

2.1 degrees C by 2020

• North becoming increasingly

vulnerable to drought

• South suffering from more serious

floods

• By 2030 the overall crop productivity

to decrease by 5% - 10%

Source - CBI Developing a low-carbon economy in China

Commitment through stimulus budgets in 2009

Country Fund Period Green Fund % Green

USDbn Years USDbn

China 586 2009-10 221 38%

US 185 2009-19 18 10%

Germany 105 2009-10 14 13%

France 38 2009-10 7 21%France 38 2009-10 7 21%

UK 30 2009-12 2 7%

Average 794 267 34%

Asia Pacific 1,154 267 23%

Europe 326 54 17%

Americas 1008 115 11%

Source - HSBC

• Not worried about public opinion

• On track to exceed 2020 goal of 15% of

energy from renewables

• On track to meet main goal of 20%

reduction in intensity by end 2010

• May be leading on CCS

Where is China today?

• May be leading on CCS

• 2007 - the largest renewable energy

producer

• 50% of scooter sales are electric

• Electric cars starting to appear

• 6 largest (PV) manufacturers, had a

market cap of US$15bn in July 2008.

• Founder is the richest man in

China

• Warren Buffet owns 10%

• See a small role for electric cars

in the 2020 market

• Working on a plug-in electric

hybrid

At a micro level

• Claims for 2010 electric car

250 mile range

½ charge in 10 mins

Full charge in an hour

hybrid

• Recharging infrastructure

• Sale price of 3 x combustion

engines

• Linking engines to regulations

Conclusion

• Climate policy is disruptive

• China is a game changer

• The UK risks being a laggard

• Brave politicians & voters

needed

Why is all of this important?

• Entrepreneurs will deliver

• Vote for revolution!

Jim Woods

Mobile 07932 044 627

Acre switchboard 0845 257 8030

Contact details

Acre Resources Ltd

131 - 151 Great Titchfield Street

London

W1W 5BB