Mobilising finance for a low-carbon future: Lessons from Lord Adair Turner
You don’t need to predict every detail – but as a director, you must be prepared for the transition ahead.
At this year’s Climate Change and Business Conference, Lord Adair Turner offered a sobering yet ultimately hopeful perspective on the global energy transition. As the first Chair of the UK Climate Change Committee, and now Chair of the Energy Transitions Commission (ETC), Turner has spent decades at the frontline of climate governance and economics. His insights matter for New Zealand directors because they highlight how financial flows, technology shifts and trade mechanisms are already reshaping the global economy – and how our response will determine whether Aotearoa New Zealand keeps pace.
Turner began with realism. Atmospheric concentrations of greenhouse gases continue to climb, global temperatures are consistently above 1.5 degrees and the International Energy Agency’s policies-in-place scenario still points to warming of around 2.5 degrees this century. The impacts are clear in the floods, droughts and wildfires that are now everyday news. The political headwinds have strengthened too, with the United States unwinding key elements of its Inflation Reduction Act. Turner was blunt: this amounts to a backward step for global progress and could add another 0.2 degrees to the world’s warming trajectory.
And yet he was equally clear about the reasons for optimism. Five technologies – solar, wind, batteries, electric vehicles and heat pumps – are on what he called “unstoppable” paths. Solar costs have fallen by 99.9% since the 1970s and continue to decline. Battery costs are down 95% in just 14 years, while energy density has doubled. In China, half of all new car sales are electric; in Norway it’s 98%. These tipping points are already transforming markets. Turner’s prediction was simple: electrification powered by clean energy will reshape the global economy faster than most expect.
But technology alone will not deliver net zero. The harder-to-abate sectors – steel, cement, chemicals, shipping, aviation and agriculture – cannot decarbonise at scale without policy intervention. Here, Turner stressed the role of carbon pricing and border mechanisms. The European Union’s Emissions Trading Scheme now prices carbon at close to €100 per tonne, with a tightening cap through to 2040. Its Carbon Border Adjustment Mechanism (CBAM) is no longer a theoretical threat but a practical reality.
The ETC’s Global Trade in the Energy Transition briefing note reinforces this point. CBAMs, it stresses, are not protectionist but designed to level the playing field: if both domestic and imported goods face the same carbon price, relative competitiveness is unchanged. Their true purpose is to drive exporting countries to decarbonise while making consumers take responsibility for the emissions embedded in what they buy. For New Zealand, whose exports are emissions-intensive, this is a signal that future market access will be linked directly to carbon performance.
Supply chains were another theme. Turner pointed out that clean-tech supply chains are now heavily concentrated in China. The ETC briefing highlights that China makes the vast majority of the world’s solar panels, batteries and key minerals. This dominance has helped drive costs down but it also creates risks if trade tensions or disruptions occur. Some governments talk about bringing production back onshore, but the ETC warns that would be extremely costly – hundreds of billions of dollars more by 2050 in Europe and the US alone. A better approach, they argue, is to diversify supply chains, build partnerships that share knowledge and technology and focus on where jobs and value can be created rather than trying to own every step of the process.
For directors, these global dynamics are not abstract. They shape trade flows, investment priorities and the regulatory landscape in which New Zealand businesses operate. Our export markets are signalling clearly: low-carbon goods will be rewarded; high-emissions products will face barriers. Supply chains will be scrutinised not only for cost but also for resilience and ethical sourcing. And finance will increasingly flow to projects, sectors and countries that can credibly deliver decarbonisation at scale.
Turner also highlighted the role of finance in the emerging and developing economies. Some countries across Africa, Asia and Latin America lack the domestic savings to capture the benefits of rapidly falling clean technology costs. Mobilising international capital into these markets is critical for the transition. The ETC briefing reinforces this, noting that financial flows must be scaled up dramatically not only for equity but to ensure global emissions reductions happen where they are cheapest. For New Zealand, this is a reminder that climate finance is not only a moral imperative but also a strategic opportunity to invest in future markets.
For New Zealand directors, it reinforces that the transition is not optional. Our companies and our exports will be judged in a global marketplace shaped by carbon prices, border adjustments and shifting investor expectations. It also shows that technology is moving faster than many boards assume. Directors must ensure that capital allocation, risk management and strategy are aligned with these unstoppable trends. Further, it highlights that governance frameworks matter. The UK’s Climate Change Committee provided businesses with certainty through carbon budgets; New Zealand’s Climate Change Commission offers a similar foundation. Boards should be actively engaging with its advice as we enter the second emissions budget period.
Turner closed with both realism and hope. Limiting warming to 1.5 degrees is no longer possible; but keeping it well below 2 degrees is achievable if action accelerates. The technologies are ready, the economics are shifting and the governance tools are available. What remains is the will to act – and the courage for directors to lead.
For New Zealand directors, the global dynamics Turner laid out are urgent, but they also intersect directly with tools and frameworks already available here. Leading the Charge: A Director’s Guide to Energy Transition from Chapter Zero New Zealand and Dentons offers a board-level perspective, helping directors to understand what’s driving the energy transition, why it matters for capital, capability and competitiveness, and how it connects with legal duties and disclosure obligations. It isn’t just about technical change; it’s about navigating social, regulatory and strategic shifts and taking “no-regrets” actions that boards can begin now. Turner’s insights reinforce why such guidance is essential: you don’t need to predict every detail of the low-carbon future, but you must prepare for it.
Because the transition is not something happening to us; it is something we shape. And the decisions made in boardrooms today will determine whether Aotearoa holds its place in a low-carbon future.
