We want to see real progress towards a global agreement
As the Copenhagen climate change talks came to a close in December, the CBI judged it a disappointing conclusion to two years of negotiations. British business was keen to see a comprehensive deal and was looking to the opportunities that could come from new frameworks for a global low-carbon economy. Instead we have an Accord that skates over difficult points and is light on detail.
British business was looking for a climate change agreement to deliver three things. First, we wanted all nations to commit to comparable emissions reductions.
Second, we wanted the foundations for a global cap-and-trade scheme to be set out. And third, we wanted broad agreement about how the wealthier nations would share the bill for helping the developing world make the move to a low-carbon economy.
The right deal at Copenhagen could have opened up a global carbon market worth $2T by 2020 with huge opportunities for the UK. There is no doubt that following the lack of ambition at Copenhagen, we will have to wait to reap the rewards a global transition to a low-carbon future. As we set our sights on the next major climate change talks in Mexico City at the end of the year, CBI wants to see momentum and real progress towards a more substantive deal. If not, we risk undermining businesses’ confidence in the long-term value of investment in the low-carbon market and technology. Without long-term certainty, business investment will suffer.
We also need a level playing field, or UK companies could find themselves at a disadvantage as manufacturers of commodities such as steel or cement shift production to countries where emissions targets aren’t as tough. We need to see governments act to establish binding emission reduction commitments for developed countries and deadlines for emerging emitters such as China and India to adopt binding targets.
A global carbon market has to be at the heart of any international agreement.
A cap-and-trade scheme, which caps emissions and allows firms to buy permits for carbon, such as the EU Emissions Trading Scheme, should be adopted by other countries to help cut global carbon emissions and tackle climate change. A carbon market with a tightening cap guarantees year-on-year cuts to emissions in a cost-effective way.
By forcing polluters to pay more for a decreasing number of permits, that in turn encourages investment in green technology and energy efficiency.
We should remain focused on those actions that don’t require global agreement and that bring economic benefits in their own right. Improved energy efficiency can take us a long way towards meeting our commitments to reduce greenhouse gas emissions by 2020, and at the same time will bring significant economic benefits. Our latest Climate Change Tracker shows that the UK is lagging on progress in this area, and that much more must be done to drive forward change.
The Government’s boiler scrappage scheme is a step in the right direction. But rather than piecemeal plans to tackle energy waste, we are calling for the Government to publish a low-carbon delivery plan to help the UK save energy.
With £15M a day being wasted on energy by businesses and households every day, we need easy-toaccess support and incentives to encourage improved insulation in homes and offices, a switch to more fuel-efficient cars, and other energy savings steps.
The UK can show the rest of the world that we are serious about tackling climate change by leading the way. But the future of a global low-carbon economy lies in the hands of global leaders.
Around the world, governments, businesses and the public must maintain pressure and push for a global agreement on climate change.
Dr Neil Bentley is the CBI’s director of business environment
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