Real action on the cost of emissions is an essential part of long-term strategy post Kyoto, and business can take the lead
At the end of this year the first commitment period of the Kyoto protocol expires. Not because it has succeeded in tackling climate change. Far from it. While there were many positive effects resulting from the protocol, getting carbon reductions down to a safe level has not been one of them.
Recently, SustainAbility and GlobeScan surveyed more than 800 sustainability experts and practitioners located in more than 70 countries, this time to ask about their views on climate change policy.
We asked our respondents to rank the effectiveness of various tools to address climate change. Notably, the tools garnering the most support – economic instruments, regulatory approaches and technology development – are those that will change the cost of emitting greenhouse gas emissions (GHGs), and consequently change the economics of energy.
Fig 1 – Most effective approaches in terms of their likely effectiveness in providing global solutions to climate change post-Kyoto
It seems that this group of experts (see Fig 1) recognises that changing behaviours won’t happen based only on a better understanding of the effects of global warming. The environmental community has been trying that for about two decades.
Real, lasting and widespread change requires a shift in how carbon is priced. And that will occur most effectively through the use of economic instruments, regulatory approaches and technology advancement.
Even corporate respondents, who unsurprisingly favour technological solutions on climate change more than any other sector, also see comparative value in regulatory approaches and economic instruments.
Among economic instruments, the one seen as potentially most effective in providing global solutions to climate change, by a wide margin, is tax on greenhouse gas emissions (see Fig 2).
Fig 2 – Rating of economic instruments in terms of likely effectiveness in reducing climate change after 2012, if implemented
Surprisingly, emissions trading schemes are seen as the least effective economic instrument (this compared to its second place ranking in a similar 2006 survey). This result may be influenced by the evident shortcomings of the European Union emissions trading scheme, which has so far resulted in neither the intended reductions in CO2 emissions, nor a stable and substantial price on carbon.
Europeans, however, tend to still have some faith in regulatory approaches and are less convinced by technology than respondents from other regions (see Fig 3).
Fig 3 – Most effective approaches in terms of their likely effectiveness in providing global solutions to climate change post Kyoto, by region. *Includes Asia, Africa / Middle East, and Latin America / Caribbean.
But overall results show a strikingly low level of confidence that international agreements, such as a successor to the Kyoto protocol, will result in adequate solutions. This is reflected in the relatively low expectations of the Rio +20 Conference on Sustainable Development coming this June, as well as the quiet surrounding COP-17 in Durban in December 2011.
So our experts seem pretty clear in their view on what must be done to address climate change in the post-Kyoto protocol era: change the cost of GHG emissions, change the economics of energy.
Make it more expensive to emit more, and less expensive to emit less. That is what will really drive behaviour change, at the institutional and the individual level. We don’t need a complex scheme of capping and trading. Instead governments should utilise taxes, tax credits and rebates, and support technology development.
Does this mean that companies and individuals should sit back and wait for governments to act? Certainly not.
We know what great influence business has in shaping public policy in many countries throughout the world. The voices opposing action on climate change are at present loud enough to stymie progress. What is required is for those companies who understand the implications of climate change – to their business and to the broad economy – to make their voice more prominent.
It is not enough to “not oppose” policies and actions that move us toward a low-carbon economy. Policy-makers need to know that business supports action on climate change because it is essential for long-term business success.
Jeff Erikson is senior vice-president for SustainAbility, and is based in Washington DC.
For the full results of the climate change survey, click here .