Analysis: Climate talks Tapping the barometer

Posted by on October 2, 2014 in Blog, Featured, The Cost of Carbon & The "Sustainable CEO" | Comments Off on Analysis: Climate talks Tapping the barometer

By Eric Marx, Ethical Corporation | September 2014

Government and business leaders meet this month in preparation for next year’s

global climate negotiations, and much has changed since the last such gathering

A UN-sponsored summit on 23 September in New York will mark the first time in five years

that world leaders have gathered together to chart a new course to limit global warming.

With leaders from business and civil society given the opportunity to work directly with heads

of state, organisers say the event may serve to embolden commitments to act in the run-up to

a new global accord due to be signed in Paris in 2015.

“It’s almost a perfect storm for action,” says Paul Simpson, chief executive of the Carbon

Disclosure Project (CDP), a London-based non-profit group and a co-sponsor of the September

summit. The affordability and availability of clean technologies

is one big reason for optimism. More than 30

countries now have climate change regulations in place,

a key difference from the situation at Copenhagen in

2009, the last time world leaders tried to forge a new

legally binding treaty.

There is also a collective awareness of repeated

climate disasters giving rise to a global consensus on the

need for action. About 1 million climate campaigners are

expected to march through New York on 21 September,

while similar events are expected in London and elsewhere.

This could put added pressure on governments in

what’s being billed as the largest climate rally in history.

A scenario document issued by the UN Secretary-General’s office reveals that about 200

leaders will make simultaneous announcements in the morning session, with deliverable

climate initiatives expected to take the form of financial sweeteners or examples of domestic

carbon-cutting action. This will be followed by a Private Sector Forum lunch, where business

leaders will discuss climate initiatives with government officials.

Carbon pricing

A number of companies are preparing to announce commitments to action on carbon pricing,

in particular through the Business Leadership Criteria on Carbon Pricing, led by the UN Global Compact 

together with UN Environmental Programme and the UN Framework Convention on

Climate Change secretariat, as well as with other partners such as CDP, the Climate Group and

the UN Foundation. More than 250 companies have backed a statement drafted by the World

Bank Group calling on governments to explore carbon pricing methods, including emissions

trading schemes and taxes.

“Carbon pricing is a critical tool to address climate change, and momentum is building to

put in place carbon pricing schemes,” says Georg Kell, executive director of the UN Global

Compact. According to the World Bank, nearly 40 countries and more than 20 cities, states and

provinces now use carbon pricing mechanisms. At the

same time, companies such as Microsoft, Exxon and BP

have begun using an internal ‘shadow’ price on carbon

as a risk assessment tool. “The more companies that

do that, the more governments will feel they can more

smoothly bring in a carbon price,” says Simpson.

Carbon pricing will be one of the main issues discussed

at the summit, but the real commitments to watch for will

be in the use of renewable energy, says Damien Ryan, a

senior policy manager at the Climate Group.“Leading big

companies are looking at these falling costs and doing

the numbers,” Ryan says. “Increasingly they’re finding

that purely on financial terms the figures stack up. So,

perhaps we’ll see … the first big companies to set out

their plans for adopting renewable energy on a large

scale.”

Former hopes that a global carbon market would grow

around the European Union Emissions Trading Scheme

and the Clean Development Mechanism are now fading.

A patchwork of national markets, some of which may be

linked, is now the likely scenario, as a new generation of

carbon regulations begins to take flight. This demonstrates significant political will, but may fall

short in setting a robust price if ambitious emissions reduction offers don’t soon follow.

Negotiators still have more than a year until the Paris conference in late 2015, significantly

more time than the three months allotted to governments in the run-up to Copenhagen in

2009. “There will be a significant agreement at COP21 [in Paris],” says Simpson, “but what we

don’t want to do is create an over-expectation.”

Rather, the intent of the September summit is to signal the direction of travel, with the UN

Secretary-General’s office saying it does not expect there to be any grand outcome. Still, with

both US president Barack Obama and Chinese premier Xi Jinping rumoured to be in attendance,

anything could happen.

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