Over 2,000 global business leaders, political leaders, and senior climate negotiators at the Business & Climate Summit pledged this week to lead a global transition to a low-carbon, climate-resilient economy.
The main question is “who will lead?” Policymakers call for business leadership, and business leaders call for well-founded policy. The Business & Climate summit—the centerpiece event of Paris Climate Week—at least brought the groups together for constructive dialogue. Collectively, attendees represented over 6.5 million forward-looking companies from more than 130 countries. The organizers noted that despite prevailing uncertainty about global climate policy, the corporate green bond market worldwide tripled to almost $40 billion in 2014—with further growth expected this year.
François Hollande, President of the French Republic, opened the gathering. Participants addressed these questions:
How can business work with government to support development, grow the economy, and limit global temperature rise to 2° Celsius?
- How will effective carbon pricing unleash innovation, create new markets, generate employment, reduce energy consumption, and increase savings?
- How will a global, long-term goal in the Paris agreement mobilize capital and accelerate the transition to a low carbon economy?
Led by the International Chamber of Commerce, leading private-sector networks called on governments to recognize a “consultative role” for business while crafting the future climate pact. Said one of the leading figures:
“Such a role would enable business to play a structured—and constructive—part in helping shape effective policies to speed emissions reductions and build climate resilience. It would, at a stroke, be a significant step forward in the way we go about addressing the shared challenge of climate change.”
Specific topics discussed:
Inclusion of business in the UN’s updated NAZCA Portal. NAZCA (Non-State Actor Zone for Climate Action) is named after the Nazca Lines, a renowned cultural feature south of Lima that was desecrated last year by Greenpeace activists). This complete database of world climate actions will serve as a central point where businesses can register their pre- and post-2020 funding for a transition to low-carbon growth, along with the contributions of governments, nongovernmental organizations, and others. The investor data will be published along with government and NGO information. CDP, the Carbon Climate Registry, and Global Investors on Climate Change worked on the NAZCA project.
Need for a robust and ambitious deal at COP-21 that works with business to reduce greenhouse gas emissions by turning existing market failures into market opportunities.
More ambition needed from national governments in their Intended Nationally Determined Contributions to deter climate change, and active support for policymakers who set clear frameworks for investment and deployment of climate-friendly solutions.
At the same time the Business & Climate summit urged governments to set policy, CDP, a London-based nonprofit that crunches data on corporate environmental impacts, issued a separate report that 81% of the world’s 500 largest companies have set targets to reduce their carbon footprints. However, CDP noted that few of the biggest emitters have set long-term targets large enough to keep warming under the two-degree limit, and few extend beyond 2030. CDP also urged companies to align their targets with current climate science.
Ali al-Naimi, Saudi Arabia’s oil minister, told the summit that his country—currently the world’s largest crude exporter—could cut out fossil fuel use by midcentury and sunsequently become a net exporter of wind and solar electricity.
Glencore chairman Tony Hayward called for an end to fossil fuel subsidies as a prelude to putting a price on carbon. However, he and and other fossil fuel producers said that renewable energy will not be able to replace coal in developing nations. They also pooh-poohed the idea that their product would become a stranded asset. Executives of solar and wind power companies disagreed.
Other top European companies called for a complete phase-out of fossil fuel subsidies and a global price on carbon emissions, perhaps similar to the European Union Emissions Trading System, which some observers feel lacks sharp enough teeth. These topics are likely to recur at the EU-China talks scheduled for next month and at subsequent meetings before the Paris summit. It’s a sign of the times that multinational business is beginning to pay serious attention to them.
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