Tuesday, April 7, 2009

Businesses Must Cooperate for Climate Change Solutions

Debate on an international climate change framework is getting some much needed input from the World Business Council for Sustainable Development (WBCSD). However, it would appear that many in the business community do not understand that economic recovery and the future of sustainability depend on the development of a low-carbon global economy.

Demonstrators at the G20 London summit urged governments to begin legislating the transition to this new economy. Although last week's G20 declarations did not focus on climate change, the world's wealthiest nations managed to reach agreement on unprecedented economic cooperation.

On April 2, 2009, the WBCSD organized a side event during the Bonn Climate Change talks on the Business Contribution to the Climate Change Debate. "The WBCSD and its member companies have been working together to contribute to the debate on climate change, energy access, energy security and competitiveness by sharing knowledge, new ideas and pragmatic solutions."

Despite the uncertainty of many business owners, some understand that the business community has a vested interest in climate change solutions. According to the WBCSD, "as the major delivery agents of low-carbon investment, innovation, products and services, [business] must have a voice at the table."

The WBCSD, "is working with leading, global CEOs to support negotiators in this process by recommending specific policy mechanisms that might contribute to a cost-effective and environmentally sound future climate framework. The WBCSD's new publication, Towards a Low Carbon Economy, aims to share business experience in technology development and deployment, finance and carbon markets, cooperative sectoral approaches and adaptation and proposes policy recommendations for a future agreement. The Bali Action Plan, agreed at the 13th climate change conference in Indonesia and advanced at the negotiations in Bonn...outlines technology, finance and adaptation as key elements of the negotiation process leading to a new climate agreement."

WBCSD's recommendations advocate a framework where countries work collectively and cooperatively. Their recommendations are summarized as follows:

A future framework must enable countries to collectively work towards a low-carbon economy with the urgency needed. This includes emissions reduction targets for developed countries and supporting infrastructure to enhance the financial and technology flows to developing countries to slow emissions growth and work towards net emission reductions in the longer term. Low-carbon technologies exist and have the potential to significantly reduce global emissions, but enabling frameworks and specific policy responses are needed to support their rapid deployment, in developed and developing countries.

New technologies will also be needed. A future framework must facilitate the scale-up of research, development and demonstration of clean energy technologies through new financial mechanisms and international cooperation.

A future framework must unleash large-scale private and public investment by enhancing carbon markets and effectively using public funding to leverage private finance. Financial flows to developing countries need to be enhanced by addressing investment barriers, extending and streamlining the Clean Development Mechanism, and establishing new mechanisms to drive large scale investments.

Collaboration between developed and developing countries on sector-specific mitigation and adaptation activities can enhance actions and increase financial flows to developing countries.
A future framework should enable the establishment of strong, integrated infrastructure planning and policy environments to promote adaptive capacity and resilience planning.

Although sharing technology with competitors in the developing world may seem like an anathema to private enterprise, it is actually driven by enlightened self interest. Wealthier nations have a vested interest in sharing clean technologies with the emerging world, because unless this is a truly global effort we have no hope of combating climate change.

Clean tech and energy technology (ET) are destined for unbridled growth, businesses that lead in these sectors will be global leaders. The Chinese understand this and so does Obama, but for the uninformed, clean-tech and ETs like renewables are viewed as costly philanthropic endeavors rather than pragmatic investments that will yield unparalleled monetary and environmental dividends.

A low carbon economy will stimulate the economy and foster innovation while reducing emissions. There are costs associated with a new low carbon economy, but they represent a fraction of the potential return.

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