Isramart : Business coalition calls for firm CO2 treaty

Isramart news:
The private sector investment needed to tackle climate change will not be made without a binding international deal on carbon emissions, according to the head of a big business coalition.

Lars Josefsson, chairman of Combat Climate Change, a group including BP, General Electric, Unilever and more than 60 other large companies, said business was ready to act but would not do so without a clear regulatory framework.

“The necessary investments will only be made when you have a binding treaty and legislation,” he said in an interview.

“Of the money required to implement a deal, the vast majority – about 80 per cent – will come from the private sector. That can only come when there is a stable legal framework.”

Hopes of achieving a binding treaty at next month’s climate change summit in Copenhagen have been abandoned but world leaders are still aiming to sign an international deal that would cover all the substantive points. This would be codified into legal language within six months to a year and then submitted to national parliaments for ratification.

Mr Josefsson, chief executive of Vattenfall, the Swedish power group, said private sector efforts to tackle climate change were being held up by the stalling political process and called for business to be given a bigger role in negotiations.

“It is very important to get business more engaged because they have the knowledge of the market economy and how investment decisions are made. Those decisions rest with the business community, not the political community,” he said.

While not all business leaders are as enthusiastic for a deal as Mr Josefsson, his comments reflect frustration among companies as they struggle to plan investments without knowing if and how carbon emissions will be regulated at an international level after 2012, when the provisions of the Kyoto protocol expire.

As well as western companies, Mr Josefsson’s group includes developing world members, such as China National Offshore Oil and Russia’s Gazprom.

Mr Josefsson met José Manuel Barroso, president of the European Commission, in Brussels on Friday to deliver a “scorecard” detailing the group’s view of what would constitute success and failure at Copenhagen.

He said success would require detailed commitments on emissions cuts, financing to help developing countries meet the targets and support for private sector investment in green technology.

Vattenfall, owned by the Swedish government, has invested heavily in renewable energy and research into carbon capture and storage. But environmentalists have criticised the utility’s continued dependence on coal-fired power stations in Germany and Poland.

“We do not invest in coal because we love coal,” said Mr Josefsson. “We invest in coal because the people in Germany and Poland need electricity. Our job is to over time turn them into zero emissions plants.”

It was announced last week that Mr Josefsson would retire next year after disputes with the Swedish government over strategy and safety breaches at its nuclear plants.

He insisted the transition to a new chief executive was “harmonious” after 10 years at the helm but said he was angered by his treatment by the Swedish government and media.

“I feel I have not been treated with respect and the company has not been treated with respect and I feel that is wrong.”