Foreword

Björn Stigson, President, World Business Council for Sustainable Development

Energy is the fuel for growth, essential for economic and social development. By 2050, demand could double as population rises and developing countries expand their economies. With the prospect of such increases leading to further increases in greenhouse gas (GHG) emissions, action on climate change is now stated as a high priority for many governments. They are seeking approaches to eventually stabilise the concentration of GHGs in the atmosphere in an equitable and an economically responsible way.

However, neither the pace, nor the magnitude of activity needed seems to be happening worldwide. As such, the focus must be on improving energy efficiency within the global economy and managing emissions from the energy we use.

This will require:

• Vastly expanded societal awareness and understanding of energy and carbon emission issues leading to greater demand for efficiency at all levels;

• Full deployment of established low-emission energy technologies and the development and deployment of advanced technologies over the next two decades;

• Rapid deployment of low-CO2 emission, energy-efficient consumer technologies as they become available, driven by a range of market-based incentives and approaches;

• Marked improvement in energy efficiency in power generation, mobility, manufacturing, buildings, goods and services.

The solution must encompass both developed and developing economies and give business the confidence to invest in low-carbon energy projects. For many low- and zero-carbon technologies to take their firm place in the market, a long-term value for GHG reductions is needed. Before business invests, it studies the future. It gauges long-term supply and demand for its products, assesses the prevailing economic conditions, including tax structures and policy frameworks, and decides on an investment strategy. Business needs clear signals from governments as to where we are headed.

An international climate change framework needs to focus on a number of key factors. These need to support the local, regional and national efforts already underway and drive key technologies. A global, long-term emissions objective is essential, and must include:

1. A long-term pathway that establishes context for all efforts globally

2. A global clean technology fund focusing on energy technology development

3. A set of tools and mechanisms comprising a framework to allow national and regional CO2 (GHG) markets to link together and the establishment of a single CO2 cost and creating equitable access to the prevailing lowest cost abatement opportunities

4. National (or regional such as the EU) legislation that create policy frameworks that will eventually cover the bulk of the world’s GHG emissions

5. Emissions reduction in other greenhouse gases; climate change is not just a CO2 issue

6. Some level of adaptation because a certain level of climate change is already locked in due to historical and future emissions (even if on the decline).

A framework like this would ensure governments do not take actions that make no sense for business. It also strongly positions business to take on its rightful share of hard work, of accompanying risk and of the opportunities that will arise from going “faster” and “deeper” into the actions to combat climate change. The good news is that global business is up for this challenge.