The Lieberman-Warner Bill was blocked by a Republican fillibuster in the Senate a few weeks ago. While it was not expected to get through the Senate and then the House this year, most of the potentially regulated industries expect something to be passed in the next two years. The international negotiation and discussion of a post-Kyoto treaty continues. As part of this public discussion, a series of CEOs from large, multi-national companies have called for action on climate change. These leaders are part of the World Economic Forum.
A Steering Board consisting of the following World Economic Forum Industry Partner companies guided development of this CEO statement for the G8: Alcoa (USA), AIG (USA), Applied Materials (USA), Basic Element (Russian Federation), British Airways (UK), Deutsche Bank (Germany), Duke Energy (USA), Electricité de France (EdF) (France), Eskom (South Africa), Petrobras (Brazil), RusHydro (Russian Federation), Royal Dutch Shell (Netherlands), Telstra (Australia), Tokyo Electric Power (Japan), TNT (Netherlands), Vattenfall (Sweden).
The comprehensive statement can be found at CEO Climate Policy Recommendations to G8 Leaders.
One of the leaders of this group, Alain Belda, CEO of Alcoa, stated, "We know we must address climate change. We may not have sorted out every detail, but we are willing to take a leadership position and embrace open dialogue... that will get us all to our common goals of protecting our world for future generations. The changes that are needed can't be incremental; we need major breakthroughs."
"Energy and the environment are the two great social and engineering challenges of our time and will only increase in importance as world economies continue to grow. As businesses and government prepare for post-Kyoto, these proposed climate change policy recommendations serve as a useful guide," advised Mike Splinter, President and CEO of Applied Materials."
One of the reccommendations of the CEOs is that the system be "market-oriented."
• Comprehensive. For environmental effectiveness and economic efficiency, the framework should encompass all major economies, in particular the G20 economies,11 all major greenhouse gases (not just carbon dioxide) and the principal greenhouse house gas-emitting sectors, including energy, transportation, buildings and deforestation/land use change.
• Commitments-based. The framework should establish clear international
commitments that are “nationally appropriate”; “measurable, reportable and
verifiable”; and, in the case of developing countries, “enabled by technology,
financing and capacity-building”.
• Flexible. The international framework should respect and preserve the
prerogative of national governments to choose their own domestic policy
options to address climate change. The new framework should accommodate
this diversity by allowing variation in the magnitude and timing of countries’
commitments, providing that the overall framework is capable of meeting the
agreed intermediate and long-term environmental goals.
• Equitable. To achieve broad participation, the framework must reflect the
fundamental principle of “common but differentiated responsibilities”13. In light of
their greater historic contribution to climate change, and their stronger
capacities, G8 and other developed country governments should show
leadership in sharing the burden of addressing climate change. We would
support such an outcome. We also note that in moving forward, future equity
and future responsibilities will require developing countries to also take on clear
emission reduction commitments.
• Framed within the context of sustainable development. The new
framework must view climate change within the context of the wider
development challenge faced by many of the poorer countries in the world. The
new framework must be designed to allow for economic growth in developing
countries, while meeting its overall international environmental objectives.14 As
agreed in the Bali Action Plan, the framework should provide incentives and
support for mitigation efforts in developing countries, including finance for
technology deployment and institutional/policy development and by providing
adaptation assistance to those countries most vulnerable to climate impacts. In
combination, these elements could provide tangible support to the sustainable
development and economic growth aspirations of developing countries.
• Technology-enabling. The framework should promote an international level
playing field to support the rapid RD&D of all clean energy and fuel technologies
that can lower GHG emissions and technologies that can help adapt to climate
change. In the near term it should encourage the wide-scale deployment of all
best available technologies that improve energy efficiency to achieve emission
reductions. It must enable research, development, demonstration and
deployment (RDD&D) of the next generation clean energy technologies, in
particular those needed to de-carbonize coal powered energy emissions. It
must also contain mechanisms to protect the rights of technology owners.
• Predictable. The long-term business strategies and investments necessary to
achieve such a paradigm shift are feasible only in the context of a stable,
predictable international policy framework, based on the principles set out
above. As this framework evolves, business must be confident that the
UNFCCC will remain the principal venue for it; that nations will honour their
commitments regardless of changes in government, and that successive
agreements will be negotiated, accepted and implemented in a timely manner.
Carbon trading or a cap-and-trade emissions market for greenhouse gas reductions is therefore a fundamental aspect of their recommendations--showing a clear preference by industry and business for a cap-and-trade system in any treaty that will be negotiated to follow Kyoto.
