DAVOS SUMMIT:The way our world develops will be heavily influenced by several non-economic matters: among them climate change and technology. Fiona Harveyshows how the scientific argument about global warming is over: all that remains is the collective action problem, in which no one wants to be at a disadvantage
Few would have predicted at the start of 2006 that a slide show lecture on the science of climate change would become a cinema blockbuster.
Al Gore's film An Inconvenient Truth, in which the former vice-president of the US explains the scientific evidence for climate change, quickly became the third highest grossing documentary of all time, behind Fahrenheit 9/11and the March of the Penguins. It was a measure of how far the issue of global warming had invaded public consciousness.
If Mr Gore's warnings were stark, however, new scientific evidence that appeared during the year provided more food for thought. There were indications that the Arctic was melting faster than expected, and many scientists began to speculate about the effect of "feedback mechanisms" and "tipping points" within the climate system that would mean small changes in temperature could have a much greater influence on the overall climate than had been thought.
James Hansen, director of Nasa's Goddard Institute for Space Studies, warned: "It is not too late to save the Arctic, but it requires that we begin to slow carbon dioxide emissions this decade."
Where Mr Gore and the scientists left off, an unassuming economist from the UK took over. Sir Nicholas Stern, head of the UK government's economics service and a former World Bank chief economist, was asked by the UK government to analyse the economics of climate change, weighing up the potential risks and benefits from the phenomenon to provide advice on how to deal with greenhouse gases.
His conclusions were striking: that the cost of reducing emissions was likely to be about 1 per cent of global gross domestic product and the cost of inaction between 5 and 20 per cent.
Aspects of his analysis have been disputed by other economists, but the thrust of his argument - that taking action on climate change did not have to impose unbearable economic costs - was widely accepted.
David Miliband, the UK's environment minister, said: "The scientific argument is settled, and the Stern review has answered the economic argument against action." He said all that was left was the collective action problem, that no country wanted to be the first to reduce emissions for fear of being put at a competitive disadvantage if other governments did not follow suit.
Some businesses, however, have seen a competitive advantage in taking early action on climate change.
Jeff Immelt, General Electric's chief executive, decided in 2005 that there was money to be made in selling environmentally-sound products, and his company reaped the benefit last year.
In May, GE announced that revenues from products and services gathered under its Ecomagination brand, for environmental products, had risen from $6.2 billion (€4.7 billion) in 2004 to $10.1 billion in 2005, and the company's backlog of advance orders under the brand, mostly to be fulfilled in three to five years, had risen to $17 billion.
Lee Scott, Wal-Mart's chief executive, set the retailer on an environmental path in 2006, promising emissions reductions, as did Rupert Murdoch's son James Murdoch at BSkyB.
In the first few weeks of 2007, the British retailer Marks & Spencer announced it would become "carbon neutral" by 2012 and would spend £200 million (€300 million) improving its environmental performance. The business world can expect more such moves in the rest of the year.
Companies may also fall under heavier regulation of greenhouse gas emissions in some regions this year and next. The UK government is proposing to extend emissions trading from the heavy industrial sector to service industries such as hotel chains and retailers. Across the EU, companies are awaiting the outcome of deliberations on the emissions caps to be put in place from 2008 under the second phase of the EU's emissions trading scheme.
The European Commission has promised the restrictions on greenhouse gas output from 2008 will be much stricter than in the first phase of the scheme, from 2005 to 2007.
Businesses operating in the US are also watching the government carefully on this issue. With Democrats in power in both houses of Congress, calls for regulations on industry's greenhouse gas output are gathering strength.
Several prominent Democrat and Republican politicians have pledged to bring forward new legislation that would cap emissions.
However, there is still strong opposition to such legislation in both houses and both parties. But many commentators think some form of regulation is inevitable.
Those chief executives meeting in Davos this week need not look far for signs of what the future holds as the effects of climate change become clearer.
There may be enough snow cover for skiers at Davos, but many other Alpine resorts have missed their snowfalls so far this winter. As ski operators are forced to adapt their businesses and diversify, corporate leaders may wonder what the climate could do to their companies.