G8 Nations

Thinking Out of the Box G8 Nations

In Need of Guidance

Nearly two decades of United Nations' talk about climate change have not produced much in the way of concrete results. For businesses, the status quo of endless conventions presents a real problem. Many companies with significant carbon emissions are increasingly desperate for clear guidance on coherent, transnational climate policy, whether it comes through the UN or not. 2011 has been a record-breaking year in terms of losses, providing a sense of how chaotic climate change itself may unfold. Many companies are exposed to environmental risks especially via their global supply chains. Unfortunately, public resistance in the United States is a major problem for moving forward. Business needs clear climate policy because in a competitive system no one can act first without exposing themselves. Consulting, finance and insurance industries have all made significant strides in creating the right infrastructure for assessing regulatory and environmental risk. Institutional investors like mutual fund managers increasingly demand emissions data from the companies they invest in, but there are few comparable options for smaller firms in spite of the potential cost savings. Of course, the dirtiest industries, especially fossil energy extraction firms, are more than willing to forestall climate policy while still ramping up new investment in discovery, infrastructure,

and technology. Carbon Tracker estimates that a serious global climate policy will require 80% of proven fossil fuel reserves to remain locked underground. Risk for non-fossil energy commerce is amplified without a clear exit from the carbon trap. Climate change means we must unwind from this dangerous situation. Everyone around the world can look toward a future of diminished expectations. People who are already economically and politically marginalized have little choice but to face increasingly restricted options. For Americans, addressing climate change represents a loss of important and pleasurable cultural symbols. Dirty industries must also recognize the diminished futures they can expect. We need an open acknowledgement of change, acceptance of diminished futures and a process of public mourning. The IEA estimates climate investment postponed beyond 2020 will cost 4.3 times investment now, while the fossil fuel industry received six times more subsidies than renewables in 2010. In this context, stiff national carbon taxes look increasingly attractive for providing market and climate stability. There is no reason businesses can’t advocate for strong climate commitments with governments and even the Jerome Whitington is Research Fellow of Science and public. Leadership on climate requires a much more subtle, committed relationship with governments, the countries they operate in, and the people they depend on and serve.• Technology Studies at the National University of Singapore. He studies climate change and green energy development as areas for exploring human futures. He has coauthored the paper Carbon Markets Need Urgent Oversight, published in the journal Carbon Markets Need Urgent Oversight.