As political support for the ‘Copenhagen Accord’ begins to unravel, business has made it clear it is unimpressed at the failure of reaching a robust deal at the UN Climate Summit.
The message couldn’t have been clearer from business in the lead up to Copenhagen. Back in May, at the World Business Summit on Climate Change in Copenhagen
, 700 delegates from leading business called on politicians to take “immediate, substantial and worldwide action to tackle global warming”. Then in September, 500 business leaders from around the world signed the ‘The Copenhagen Communiqué
’, calling on world leaders to agree “an ambitious, robust and equitable global deal on climate change that responds credibly to the scale and urgency of the crisis facing the world today”. Names on the communiqué included Virgin’s Richard Branson, British Airways’ Willie Walsh and Shell UK’s James Smith. Even during the Copenhagen summit
itself, when it became clear the negotiations on a global deal to replace the Kyoto Protocol were stalling, business reiterated its call for a robust deal to be done.
A deal was indeed done; after a gruelling last day of talks, at around nine o’clock at night, the White House announced President Barack Obama had closed a deal with China, India, Brazil and South Africa. The White House described it as a “meaningful agreement”, but there was no denying that it fell well short of the ambitious, robust and equitable global deal, business had been calling for so loud and clear. Even the White House’s own positive spin on the agreement admitted that it wasn’t sufficient to fight climate change – after all it did not contain commitments to greenhouse gas emissions reductions
and it was cobbled together between just five countries.
While the political ramifications of such a lacklustre deal are still being absorbed, the shock waves on the carbon markets
were felt immediately. EU carbon prices
took a sharp tumble, falling to a six-month low of €12.4 (£11.12) on December 21.
Meanwhile, business wasted no time in forming its verdict.
In a statement the International Chamber of Commerce
(ICC), said it was “disappointed” that the climate accord
“did not deliver a clearer and more ambitious agreement”.
Richard Lambert, CBI director-general, described the Copenhagen Accord
as “a missed opportunity”.
“The heads of state have come up with an agreement that skates over difficult points and is light on detail,” he said, pointing out that “business needs a clearer sense of direction if it is to make the enormous investments needed to shift towards a low carbon economy.”
Institutional investors, meanwhile, voiced their concern over a deal that was not legally binding. “We urge world leaders to work quickly to agree a legally binding global framework that will kick-start the development of a fully functioning international carbon market and provide a context for alternative financing mechanisms,” Peter Dunscombe, chairman of the Institutional Investors Group on Climate Change, which represents fund managers who control £3.5 trillion in assets, told The Times
There had been speculation that global leaders at Copenhagen might set out a blueprint for an international carbon trading system. Instead, the agreement simply said: "We will decide to use various approaches, including opportunities to use markets, to enhance the cost-effectiveness of mitigation actions."
A number of the energy companies had warned that a failure of a binding agreement at Copenhagen would delay vital investment in renewables. E.ON’s chief executive Wulf Bernostat is reported to have said that faster cuts in its emissions would only come once “further progress” was achieved.
City analysts are now predicting that investment in cleantech, which has soared over recent years, will be hit by a weak Copenhagen deal.
One area the agreement did deliver on was $30 billion (£19 billion) of 'fast start' funding for 2010-2012 for vulnerable developing countries and a commitment to mobilise $100 billion (£62.5 billion) a year by 2020.
But ICC secretary general Jean Rozwadowski, said there was still “major work ahead" and that going forward business to work with governments more closely "to help rapidly advance the decisions to establish the terms and procedures that will give business the predictability that it requires.”
In the meantime, the CBI’s Lambert said business needed to focus on “those actions that don't require global agreement and that bring economic benefits in their own right. For the UK, these include a much increased emphasis on energy efficiency in the home and the workplace, and major investment in diverse and low carbon power generation.”
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