Last week, we previewed the UN climate change negotiations in a blog outlining the top three issues we would be tracking during the two-week session. As talks enter their second week at COP20 in Lima, Peru, here are three priorities business would like to see.
1. A long-term decarbonization pathway: In a dinner convened by BSR and We Mean Business on Sunday, Vasco Masías, of the food company Ovosur, captured a request many private sector leaders share: “Please reduce the uncertainty.” Business leaders here understand that the goal of limiting average global temperature increases to below 2°C above pre-industrial levels requires ambitious greenhouse-gas emissions reductions consistent with climate science. They also know this requires net-zero emissions well before the end of the century. Business wants a climate policy environment that is consistent and predictable—factors that encourage long-term investments and coherent planning.
Business leaders are looking to governments at COP to make emissions-reductions contributions that are ambitious, can be increased over time, and lead us to net zero. How will we know if the contributions add up? Effective mechanisms for transparency and accountability lead to contributions that are quantifiable, comparable, and therefore capable of being aggregated to ensure consistency with the long-term coal of decarbonization.
2. Scaled-up climate finance: Business supports new, additional, adequate, and predictable climate finance from both public and private sources. Recognizing that the private sector is complementary to, not a substitute for, public-sector financing, business leaders here have asked for this support to catalyze investments in emissions reductions and enhanced adaptive capacity. To heed this call, governments should ensure that policies aimed at encouraging private-sector finance contain incentives for business to invest in climate projects and support for companies to manage financial risk. Public-sector finance should catalyze greater investment from the private sector.
3. Short-term ambition to complement the long-term vision in the new agreement: Currently, there’s a significant gap between the level of greenhouse gas emissions we are predicted to reach by 2020 and the current pathways that would hold the temperature increase to below 2°C. Business wants governments’ help to close that gap. One workstream of the negotiations has helped identify ambitious policy options and opportunities for multistakeholder collaboration. This workstream, which is not as politicized as the negotiations for a new climate agreement, is focused on practical action and is the most accessible part of the UN process for business engagement.
As we work toward a new agreement in Paris to cover the period after 2020, business leaders are asking governments to strengthen this workstream and invite pragmatic and innovative business solutions into the climate talks to drive emissions reductions in the short term.
Bold climate action is not a burden but a historic economic opportunity. Forward-thinking companies have seen an internal rate of return of 27 percent on their low-carbon investments. One hundred of the world’s leading companies are committing to 100 percent renewable power by 2020. As the New Climate Economy report outlines, low-carbon, climate-resilient growth is possible. Already, there is a significant amount of capital available for investments, opening the door for innovation. Now, all business needs is a strong conclusion to COP20, with governments setting a path for smart policies that create opportunities for low-carbon innovation and drive the transition to a low-carbon economy.