Durban and beyond: Rearranging deck chairs on a sinking ship?

Speaking Out

December 05 2011

by Yohan Hill

Durban and beyond: Rearranging deck chairs on a sinking ship?

Recently I was asked to contribute to a UNPRI webinar on assurance. I thought that I should check a few facts before sharing my opinions. Perverse behaviour I agree, but I am that sort of guy.

I was surprised by what I found.

Already the signs are not good. Insiders suggest that a global agreement may continue to be elusive until 2018 at earliest. At the same time, experts insist that without immediate action over the next five years, the world will be ‘locked in’ to dangerously high levels of greenhouse gas emissions for decades to come.

The global economic recession, which has fundamentally altered global climate change politics, has not helped. The premise behind the Kyoto Protocol and its yet-to-be-negotiated successor pre-supposes that so-called ‘rich’ countries are able to pay ‘poor’ countries to reduce their carbon footprint. With the Euro-zone in crisis and economic growth in the United States and Japan fragile at best, the political will and ability of developed nations to finance carbon reduction protocols is greatly diminished. It is not yet clear what role emerging economic giants will play in future emissions treaties. However, with the unabated rise in global greenhouse gas emissions, recently reported by scientists at the US Department of Energy as an unprecedented 6% increase in 2010, the role of emerging markets will be of critical importance.

The challenges ahead are therefore both substantial and complex.

At the same time, more and more of the burden of addressing climate change is being taken up at the local level by individual countries and forward-looking states and municipalities. While the US has shunned the idea of a federal carbon cap, California, now the world’s eighth largest “economy“, recently became the first US state to adopt a cap-and-trade scheme to address climate change. In Boulder, Colorado, in the south-western part of the US, voters recently passed measures that will allow the city to cut ties with its existing energy provider, Xcel Energy, and lay plans for a municipal utility aimed at giving the city greater leeway to reduce its greenhouse gas emissions.

Similar regulatory schemes aimed at reducing greenhouse gas emissions have already been introduced in the European Union and more recently in Australia in the form of a carbon tax. China, South Korea and South Africa are among other countries formulating their own initiatives to limit heavy polluters as part of the commitments made under the 2009 Copenhagen Accord.

At the corporate level, businesses are already planning for an increasingly carbon-constrained and volatile future. A growing number of companies have begun to implement their own carbon reduction strategies in order to maximise the opportunities and minimise the risks associated with climate change. Here in the UK, retailers such as M&S, Tesco and Sainsbury’s, have all put in place ambitious carbon cutting goals. Leading energy companies, such as National Grid, are also heavily investing in new infrastructure to reduce the carbon intensity of their gas and electricity networks. Car manufactures BMW, Nissan and VW have begun producing new energy efficient, low carbon vehicles, including a range of electric cars, in response to regulatory pressure, higher fuel prices and growing consumer demand.

The list of companies adapting their business models to carbon related pressures is growing. Further, an increasing number of companies and government departments are also putting pressure on their first tier suppliers to demonstrate alignment with their organisation’s own sustainability goals. Investors and asset managers too are insisting that companies they invest in demonstrate how they are managing greenhouse gas risks and opportunities.

But while the lack of certainty at the international level has rather spurred than prevented action on climate change, niggling questions remain. If a coherent global framework cannot be agreed, and soon, can the efforts of a few leading countries, states, municipalities or companies really make a difference?

It may be that the international community will eventually agree a tough international framework that effectively addresses the climate change problem. But it’s more likely that whatever gets agreed in Durban and beyond will be a case of too little, too late. As the global economic situation deteriorates, new questions are becoming prominent. How do we cope with the global social, economic and environmental fallout of climate change? What can countries and local municipalities do to prepare for this increasingly likely scenario? And what role should businesses play in defining an adequate response?

For governments, businesses and individuals alike, these questions are demanding new and more considered approaches.

Yohan Hill is a Senior Consultant at Corporate Citizenship with extensive experience advising companies on corporate sustainability strategy, sustainability reporting, and wider corporate responsibility and sustainability issues. He holds an MSc in Environmental Technology, specialising in Energy Policy, from Imperial College London, and has over 8 years experience in this sector.