The Guardian (UK): 'Time is running out': “Certainly businesses and investors are not blind to the opportunities that climate change policies can deliver. A visit to WBCSD's website (www.wbcsd.ch] shows how its member companies (which include international corporations such as Dow Chemicals, Shell and Coca Cola) are achieving significant business benefits through energy efficient operations and the development of energy-conserving products and services.” (ShellNews.net) Posted 17 Dec 04
Businesses are starting to wake up to the economic havoc climate change could wreak, but tougher regulation on emissions is still needed, argues Oliver Balch
As 5,000 delegates prepare to leave Buenos Aires after ten days of high-level talks on climate change, floodwaters in Argentina's northern state of Chaco have forced twice that number out of their homes in recent weeks.
The reality of climate change is beginning to bite, ten years on from when the Kyoto targets on greenhouse gas emissions were initially agreed.
While environment ministers at the Conference of Parties (COP 10) have spent the majority of the talks discussing what to do after the Kyoto agreement expires in 2012, environmentalists and campaign groups are growing increasingly frustrated at the current pace of change.
"Time is running out for nature and wildlife around the world", said Jennifer Morgan of campaign group WWF, which issued a report this week highlighting the dramatic effect that a rise of 0.7 degrees Celsius has had on the world's ecosystems over the last century.
But worries over rising temperatures are not just the preserve of green campaigners. Institutional investors and shareholders too are beginning to voice concerns about the economic repercussions of climate change.
"Sectors such as agriculture are exposed to the physical impacts [of climate change] while others such as power generation are already adapting to greater regulation", says Simon Abrams, a senior analyst at Jupiter, an asset management firm.
With weather-related catastrophes accounting for an estimated $55bn in 2003 (a figure that US-based environment group CERES believes could triple over the next decade), shareholders are right to be concerned.
However, the threat of costly government intervention - investors' other major climate-related risk - has yet to materialise. To date the UK government has opted to pursue a participative approach with business, in preference to strict legislative penalties.
Speaking in Buenos Aires yesterday, for example, environment secretary Margaret Beckett announced a £2.5m investment for the Renewable Energy and Energy Efficiency Partnership, a cross-sector initiative to promote low carbon technologies.
The government is keen to promote voluntary efforts by companies such as energy giant, BP, which spent $20m implementing energy efficiency measures and duly cut its energy costs by $650m over three years. HSBC provides a similar case study for voluntary self-regulation, recently announcing its intention to buy "green" electricity wherever possible as part of a larger commitment to becoming "carbon neutral".
Business lobby groups argue that the private sector needs to be part of the policy process if "workable solutions" are to be found. "We need a shared understanding of the facts, challenges and dilemmas related to energy and climate", Bjorn Stigson, president of the World Business Council for Sustainable Development (WBCSD), told conference delegates this week.
Certainly businesses and investors are not blind to the opportunities that climate change policies can deliver. A visit to WBCSD's website (www.wbcsd.ch] shows how its member companies (which include international corporations such as Dow Chemicals, Shell and Coca Cola) are achieving significant business benefits through energy efficient operations and the development of energy-conserving products and services.
"Companies that develop solutions to meet the challenge of a carbon constrained world will benefit over the long term," Abrams asserts. But it remains in doubt how long this "win-win" argument favoured by business will be permitted to continue. Recent findings from The Climate Group, a cross-sector organisation promoting action on climate change, show that 63% of the British public would like to see "urgent action" by their leaders.
The government's publication of a five-year environment strategy last week, which includes a deal between supermarkets and local councils to encourage recycling, has mollified some critics - although by no means all.
While Friends of the Earth (FOE) welcomed the new measures, it continues to call for "radical action" if the UK is going to meet its own target of 20% reductions in carbon dioxide emissions by 2010 (from 1990 levels).
"Replacing old, inefficient coal-powered stations with cleaner alternatives, introducing economic incentives to encourage energy efficiency, and encouraging the use of less polluting transport options are desperately needed," argues FOE director Tony Juniper.
The European Union's emissions trading scheme is emerging as the battleground between the current business-friendly approach and the more interventionist line preferred by campaign groups and activist investors. The scheme comes into force this January.
Environmentalists accuse the government of bowing to pressure from the private sector when setting national allowance targets for the EU trading scheme, which follows on from a similar voluntary scheme that has been piloted in the UK since April 2002.
"As a result of industry lobbying, national action plans [for the EU trading scheme] are failing to establish robust commitments to reducing carbon dioxide emissions," says WWF spokesman Dax Lovegrove. "It is critical the second phase [2008-2012] pushes the boundaries to ensure we reach a fossil-free economy."
WWF is hosting a conference seminar today [Thursday], together with fellow campaigners Greenpeace and FOE, to highlight recent trends in climate change litigation. If policy makers cannot bring about progress, then perhaps the law courts will be called on to do so.
• Oliver Balch is a specialist on sustainable development and corporate responsibility issues.