A strong climate deal is good for the planet and great for business
By Sandrine Dixson-Declève
10 December 2015
We are at a turning point in global economic transition which the Paris climate conference can meaningfully accelerate. Over the past few years, the business community has made significant progress in understanding, reducing and reporting its impact on the climate.
Members of The Prince of Wales’s Corporate Leaders Group, which brings together 23 global companies employing 2 million people in 170 countries, with combined revenues of $170 billion, are adapting their business models and increasing their investment in low-carbon technologies.
Last year, global investment in clean energy reached $270 billion, half of which in developing countries. To sustain and scale up this growth, and the new jobs it promises, business needs an enabling policy environment. Only clarity and certainty at the national and global level will unlock the trillions of private investment required to build a new, low carbon, climate-resilient economy. This means effective national policies based on a strong international policy framework.
Even before it concludes, COP21 has already produced a remarkable achievement: a record number 185 countries covering over 90 per cent of global emissions have submitted climate mitigation plans that would lead to a fall in per capita emissions over the coming 15 years. However, they are not ambitious enough to limit global warming to under 2°C, the government-endorsed global 'guard rail' that should not be stepped beyond if we want to avoid runaway climate change.
To close the gap and meet the 2°C target, the Paris conference needs to put the world on a path to set and regularly strengthen climate action and to ensure that national commitments are implemented effectively and efficiently.
Members of The Prince of Wales’s Corporate Leaders Group believe that the agreement which will be announced at the end of the week should contain three specific items:
- A long-term global emissions goal, such as peaking emissions as soon as possible and securing net zero emissions well before the end of the century;
- Agreement to update and improve national mitigation commitments and adaptation plans every five years;
- Clear transparency and accounting mechanisms, so we can be confident that country commitments are comparable and dependable.
The Paris conference must also ensure that the climate finance promised to developing countries is delivered and is used wisely. Providing climate finance from the public sector is key to ensuring stability and continued development in many parts of the world. This finance can also be used to leverage much larger flows of private capital by helping to de-risk investments into the industries and infrastructure of the future.
Finally, business needs the right fiscal environment for a low-carbon transition. Clear incentives and market signals are required to change business practice and shift private investment into low carbon, resilient infrastructure and technology. In Paris and beyond, we hope to see time-bound commitments for market mechanisms that will deliver a robust price on carbon and its flip side, an end to perverse fossil fuel subsidies.
When The Prince of Wales convened the Corporate Leaders Group ten years ago, we were one of a handful of progressive business voices promoting climate action. Today, many more business leaders and coalitions are united with these aims, including our partners in the We Mean Business coalition. The voice of reason and the voice of hope must both prevail at Paris and well beyond. Because a deal that shifts emissions onto a rapid downward trajectory offers the best hope for the long-term rewiring of the global economy – and that transition is undoubtedly the best deal for business.
This article was written for the FT/Coca-Cola Enterprises 'Rethinking Business' blog series.
The Cambridge Institute for Sustainability Leadership is running or supporting a number of events at COP21. See the schedule here.
In addition, The Prince of Wales’s Corporate Leaders Group, to which CISL provides secretariat, have a full schedule which can be found here.