COPENHAGEN SUMMIT:IN 1997, at the time of the Kyoto climate summit, hardly any business leaders paid attention to the issue of global warming – and even fewer were engaged. But that's all changed. Although neanderthals like the US Chamber of Commerce are still holding out, there has been a seismic shift in in the global business landscape.
Contrary to popular opinion (that the Copenhagen climate summit was infested with business lobbyists trying to prevent a strong agreement), corporate leaders made the case that a strong deal would be good for the economy.
More than 900 companies from all continents – most of them global players – advocated a strong, legally-binding deal that would reduce carbon emissions and accelerate clean energy innovation worldwide. They recognise that Copenhagen needed to be an important landmark on the road towards the transition to a low-carbon economy.
What they sought in their “Copenhagen Communiqué” was a clear signal that would encourage businesses to make long-term investment decisions in low-carbon technologies, with incentives to invest in RD in this growing area, while protecting economies from the potentially catastrophic impacts of climate change – both now and in the future.
The companies involved in this initiative, the EU and UK Corporate Leaders Group (patron: Britain’s prince Charles), are no small players. With an aggregate $11 trillion in market capitalisation, 20 million employees and a combined turnover of $2.6 trillion in 2008, they are a force to be reckoned with – and are also likely to “stay on the case”.
The group includes airlines, banks, consumer companies, services and more – with just one major oil company, Statoil, in the mix.
There is money to be made, of course, in the transition to a low-carbon future. Companies in the World Wildlife Fund (WWF) “Climate Savers” programme are already showing that ambitious greenhouse gas reduction targets are achievable while business is growing – and lead to a range of innovations.
According to the WWF, “Climate Savers shows that carbon-smart companies are the successful companies of the 21st century”.
Collectively, the companies are reducing emissions by 50 million tonnes of CO2 by 2010 – equivalent to the annual emissions of Switzerland. The American Clean Skies Foundation came to Copenhagen to focus on ways that natural gas – especially with the discovery of vast reserves of unconventional, or shale gas – could “accelerate the transition to a global low-carbon economy”. It pointed out that gas can generate electricity with up to 70 per cent less CO2 than coal.
But there is a dark side – with energy companies, in particular, not very evident among the progressive business forces. German utility giants RWE, E.ON and EnBW were to the fore in lobbying both at home and at EU level to water down Europe’s unilateral commitment to cutting CO2 emissions by 20 per cent by 2020.
In a report on business lobbying by the International Consortium of Investigative Journalists, former Fine Gael MEP Avril Doyle, who helped steer the climate legislation through last year, had described the lobbying as “fierce”. As the parliament’s chief negotiator with the European Council on the review of the EU Emissions Trading System, Doyle was a particular target. “They could get very personal – abusive, even,” she said.
Doyle felt industry-generated pressure first-hand – from her own colleagues in the European People’s Party. In the end, EU leaders “discarded key parts of the European Parliament’s work so they could push through the climate change legislation well before Copenhagen,” according to the report.
The package finally agreed permitted up to 50 per cent of emissions reductions to be met by investing in foreign “offset” projects, mostly in developing countries. “Some environmental experts warn that finding such a large number of offsets overseas will be difficult, and that the measure could undermine the effectiveness of the EU agreement.”
To date, according to Point Carbon – a leading intelligence source on carbon markets – less than one third of 1,950 projects approved under the Kyoto Protocol’s Clean Development Mechanism (CDM) have actually been certified. These 600 projects are set to deliver 1,050 million “certified emissions reductions”, known as Cers in the trade.
The London-based Climate Group, which works with a slew of companies to reduce CO2 emissions worldwide, was among those urging the EU to raise its emissions reduction target for 2020 to 30 per cent. But there were those who lobbied strongly against raising the bar – including many of the same interests which had lobbied against the 20 per cent reduction target adopted in December 2008. Here again, intensive energy users, including major power companies, were to the fore in trying to put a brake on the EU.
Obviously, even business leaders who lobbied for a stronger deal in Copenhagen would not be averse to availing of Cers to offset their companies’ emissions. They would argue, not unreasonably, that a tonne of CO2 emissions saved elsewhere is just as valid as a tonne saved at home – especially as climate change is global in its scope.
IFC, a member of the World Bank group and Standard Poor’s, used the Copenhagen summit as a launchpad for the world’s first “carbon efficient index” for emerging markets that should mobilise more than $1 billion in investment for carbon-efficient companies over the next three years – essentially for CDM projects in developing countries.
