INSIGHT: Bali highlights opportunities for change

12 December 2007 16:46  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS news)--Roadmaps are one thing; targets another. The multi-billion dollar question is do we need both?

As the consensus of opinion swings much more firmly towards accepting the inevitability of climate change, the US stands in the cold as the only industrialised nation not part of the Kyoto process.

But the US does not want the UN climate change conference at Bali to agree targets; it supports a voluntary approach.

US industry, then, is unlikely to be saddled with binding emissions control. But the pressure on business to do a great deal more to control carbon dioxide emissions is strong.

Among chemicals sector companies there are clear differences between those who openly call for concerted action on climate change and those who seemingly sit on the fence. That makes industry advocacy difficult.

It also puts the entire industry at a disadvantage.

Keeping a tight control of costs is one thing. But being blind to the implications of not doing what everyone else is in driving the technologies and systems that will cut carbon emissions and help carbon dioxide emitters better do so is unfortunate if not foolish.

Not for nothing have giant chemicals firms such as Dow Chemical and DuPont joined the US Climate Action Partnership, (USCAP).

In March, this group of industrial, business and environmental players called on the federal government for strong national legislation requiring significant reductions in greenhouse gases.

These firms clearly believe they are missing out on opportunities for change.

Tough carbon control could be environmentally effective but would drive technology change, creating, as USCAP says “economic opportunity and advantage” and rewarding early action.

In Europe the chemicals sector has complained bitterly about certain aspects of mandated climate control, the emissions trading scheme being the most obvious case in point.

But companies have put the technologies and mechanisms in place to significantly reduce the carbon dioxide output of their plants. Those efforts continue and have been taken up across a much wider platform of business in general.

Leaders of UK industry were not being short sighted when they called last month for a shift to a world where carbon becomes a new currency so that consumers and businesses are rewarded for making the right choices.

If business is in at the start when new carbon control measures and schemes to combat climate change are implemented, there is every chance of the opportunities being greater than the (business) threats.

 “Are we sure that climate change exists? I am sorry, but that is not a question for us,” said Ben Verwaayen, chairman of the UK Confederation of British Industry Climate Change task force and chairman of telecoms giant BT.

“The best question for the business community is whether we can be certain that climate change presents a substantial risk; a risk that will have a profound impact on society and the economy?

“To this the answer is clearly 'yes'. And so, as with all substantial risks, it is vital to mitigate the danger.”

What business needs is more research into or investigation of the ways in which the climate change agenda can become part of what the CBI calls the “DNA of business”.

Chemical producers will be on the receiving end of government measures to control carbon dioxide emissions - and they might be expected to have to pay the price.

It does look as though a global carbon cap and trade systems might become a reality. The US senate will discuss a climate control bill next year which includes cap and trade proposals.

The tradable price of carbon would then become at least as if not more important for chemicals makers than for anyone else.

Companies such as Dow want to see national market mechanisms for cost-effective carbon management and fair targets set for different industries but can only expect to achieve their goals by working hard towards them.

Dow was on the programme of participants at a meeting on Wednesday in Bali explaining USCAP’s position.

The UN conference will help set most of the world on a course for carbon control post-2012.

Chemical players know they can contribute much and gain more than they lose if they are proactive in the great shift towards tighter carbon control.

By: Nigel Davis
+44 20 8652 3214

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