The silent participant

The business community’s presence appears to be pushed aside by more flamboyant NGOs. Members are diverse: from carbon emitters to carbon aggregators, banks, utility companies, technology providers, auditors, verifiers, monitoring companies, climate consulting and data management firms among others. All of them see their revenues affected in some degree by decisions made at COP 15.

In spite of their interest in the negotiations, there is currently no formal participation framework for businesses, although everyone knows they are there. To attended Copenhagen businessmen and businesswomen subscribed under a Non-Governmental Organization, like the International Chamber of Commerce or the Project Developer Forum.

Business representatives keep a low profile, attending side events and approaching negotiators individually. A surprise to some, but businesses wants the same thing as most advocacy groups: a concrete outcome. They know the name of the game, they just need the rules. As Brian Flannery, Vice-Chair ICC Environment and Energy Commission, put it “we will all reduce emissions in the future, we just want to know how fast.”

A carbon market can help provide some of the rules. It would, at least, set a carbon price businesses can use to make investment decisions on abatement. The price and size of the market will depend on the amount of emission reductions required from countries, which, as Steven Gray from Climate Change Capital rightly expressed, is “a political decision”.

The market’s dependence on regulation brings an unprecedented opportunity for governments to take advantage of profit driven businesses to increase the welfare of their citizens. The objective will be to design rules that accelerate emission reductions through business incentives without compromising national interests. Whatever the outcome, some countries will emerge ahead of others.

However, we are not quite there yet. Being close to determining the global amount of reductions, negotiations are now focusing on the payoffs to get buy-in from developing countries while at the same time designing a way to make sure they all play nice. Once the size and basic rules are sorted, negotiations will move towards distributing the reductions and payoffs among the 193 countries along with their implementation rules. These are the rules businesses are waiting for. Given its crucial function as a catalyst for emission reductions one wonders if businesses’ presence in international negotiations should be enhanced and they become less of the silent participants.

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