Copenhagen or bust?

The lead-up to the climate change talks in Copenhagen has created a huge amount of media and public interest in whether or not the world’s political leaders will be able to carve out an agreement on reducing emissions that continues the efforts of the Kyoto Protocol. In its ambition, there is no doubt that these talks hold a lot of promise. Getting the US at the negotiating table is at least progress in itself but coupled with countries such as India and China discussing binding targets, there is real momentum.

Having said that, there have been some false starts and as the talks commence in Copenhagen, the immensity of the task ahead has started to raise questions as to whether or not an agreement can be reached. In reality, it is likely that the foundations will be built in Copenhagen, with high-level principals reaching agreements that require more work and hard negotiation to bring into a workable format.

While sceptics are still peddling theories that climate change does not exist, the rest of us are working on the assumption that the emissions cuts required are deep, and according to the latest Intergovernmental Panel on Climate Change report, developed countries should reduce their emissions by 25 to 40 per cent compared to 1990 levels by 2020 and by 80 to 95 per cent in 2050. In addition, developing countries should reduce their emissions by 15 to 30 per cent below business-as-usual emission trends by 2020.

To achieve these tough objectives, industries, energy supply and human behaviour all have to significantly change and adapt as quickly as possible. To facilitate this shift to a low-carbon economy in a focused and meaningful way, there needs to be the right regulatory framework to provide incentives for further investment in green technology and to support innovative schemes that have the ability to reduce, or ultimately avoid, emissions.

While some of this framework exists in the form of the Kyoto Protocol, the cut needs to be deeper. Full engagement from all nations is required and it needs to reach far into the future to provide the regulatory certainty that investors and the private sector require. Businesses do not necessarily need an ultimate resolution of all questions in one treaty, but strong signals from the international community of nations and governments that this challenge will be addressed and that everyone is aware that private capital is needed to resolve the issues. Only then will companies believe that there are enough signals to take risks in order to grasp the opportunity.

Beyond these business decisions, there remains a moral obligation to help developing countries both in social and economic terms. With the impact of climate change often most acutely felt in developing countries, these discussions should not only be about making businesses in developed countries more efficient, but about building developing economies and energy supplies in a sustainable way, ensuring that the benefits of economic growth reach all societies.

Preparing for the impact of climate change also needs to be considered. This seems pretty difficult when countries are lurching from one crisis to another due to extreme weather events such as flooding or drought. This is why adaptation needs to be considered on a global level, as part of the climate change framework. Not only can some countries not afford to make the changes necessary to cope with rising sea levels or higher temperatures, but the global impact on food production and water is potentially disastrous.

We all hope that Copenhagen will bring the necessary results to put a plan in place for the next phase in the fight against climate change. The question is, what happens if it doesn't? Taking no action is not an option and most governments are signed up to this. With all this political will and momentum it would be a great loss if Copenhagen does not produce the results that are needed.

If investors experience further uncertainty, it is likely that they will file carbon and green investments under the "too risky" banner and move elsewhere. We cannot afford to let this happen, and that is why I hope that the signals from Copenhagen are, if not at this stage binding, at least enough to maintain interest in the sector while governments get their acts together and come to a long-lasting and meaningful climate change agreement that has all the necessary incentives to stimulate investment to pave the way for a low-carbon economy.

Lisa Ashford is global head of voluntary and new markets at carbon offsetting specialist EcoSecurities