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Climate costs up front worth gains later, EBA chief says

December 14, 2009

Fiona Wain photoMany negotiators and large industry groups at the COP15 climate conference in Copenhagen argue that climate action is a question of cost, but the price paid up front is worth the savings later, says the chief executive of a leading business think tank.

The cost often referred to in talks is regarding initial capital expenditures, or capex, but climate change solutions should be compared with operational costs, which would be decreased, and they should also be compared with the collateral of damage avoided cost benefits, Fiona Wain, chief executive officer of Environment Business Australia (EBA), told Reuters.com in an interview.

“If you haven’t got pollution, if you haven’t got waste, if you haven’t got greenhouse gas emissions, that’s a significant lessening of the drain on the public purse in all countries,” she said.

EBA formulates policy recommendations on how to have commercial activity without collateral damage to the environment, public health and security.

Wain is hopefull that Cop15 will produce a minimum of 25 percent cuts in carbon dioxide emissions by 2020 and longer term at least 80 percent by 2050.

“That may seem like a draconian imposition to some but it’s also a way to build new markets, new industries and new jobs and that is the approach we should be taking.”

The environment is already big business. A UK report estimated the global Low Carbon & Environmental Goods & Services market to be worth about $6 trillion in 2007/8.

Getting a deal on emissions targets is also vital for the nascent cap and trade system, where carbon credits are bought and sold.

ADB President Haruhiko Kuroda told Reuters in an interview that if governments were to fail to reach a climate deal in Copenhagen, it could lead to a collapse of the carbon market which would hit efforts to deal with climate change. The talks are scheduled to conclude on Friday.

“Cap and trade is vitally important because without a price on carbon there isn’t a clear signal to the market place as to what it is the market should be recognizing as real value going forward. It is possible to put a price on things without a cap and trade scheme … but it will be immeasurably more difficult.”

If there is no emissions targets agreement the EBA is ready to roll as an industry group on a number of bilateral and multilateral infrastructure projects, including working in tandem with India and China, potentially Africa and certainly the United States, Wain said.

There has also been fightback against business lobbying from environmental groups, who say that industry is being let off the hook in the climate debate. But Wain said those objections are naive.

“To say that biosequestration, land-use programs, forestry, soil carbon is letting industry off the hook is frankly rather naïve,” she said.

“(Industries) have to do the maximum amount to make very very deep cuts in emissions. But we need to make that transition together. We need to be able to finance that, we need to be able to deploy the technology to achieve it, we need to retrofit old-fashioned plants or retire them. It’s not going to happen in the next six months, whereas the biosequestration process we can start to get it rolling in the next six to 12 months.”

Part of the problem for business is that so far it has done a poor job of getting its message across regarding environment technology, she added.

“Every great technology leap forward, every new technology era has been wealth generation,” Wain said. “The ET leap forward will be no different.”

Click on the video to hear some EBA solutions it says are gaining traction at COP15 and the cost effectiveness of these solutions:

And her views on the cap and trade system:

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