Figueres Calls for a Global Business Plan for Governments, but the Private Sector Won’t Wait
By Jasmine Hyman and Jonathan Smith
The UN delegates are bracing themselves for a long night — and possibly morning — as the world awaits concrete deliverables from Durban. Christiana Figueres, at a high level side event on UN coordination last Wednesday, suggested that the UNFCCC process was the attempt of 200 governments “to write a global business plan,” and that “unlike the private sector that needs all the details clarified before they will act, the governments here are moving despite the risks towards the public good.” Ms. Figueres was also confident that the legacy of Durban would be the adoption of an operational plan for the Green Climate Fund. It is expected that the fund will need to rely on private-public partnerships in order to achieve its target of 100 billion dollars of new funds (beyond regular aid budgets) for developing countries engaged in climate-compatible development by 2020.
Yet confusion remains as to whether a coordinated, government-scripted business plan for global carbon emissions can (or even should) emerge. Today, a rally of “Occupy COP 17” protestors chanting via human microphone outside of the COP plenary denounced carbon markets for pricing carbon below the price of a pizza. Their call for stringent government regulation of carbon pricing reverberated throughout the convention center. For the protestors, markets can not be part of the solution because they caused the problem in the first place – legally binding government commitments mark the only path forward.
Protests or no, the private sector is not waiting for a regulated price on carbon before it prices carbon. During a recent Yale-sponsored webinar about UK climate policy, Peter Madden from Forum for the Future noted that the real leadership in UK climate action at the moment is surprisingly coming from the business sector, which is “going the distance ahead of where its customers and investors are telling it to,” and that companies are doing “much more imaginative stuff than any other sector.”
One of the many amazing aspects of being a student at Yale is that we actually had the chance to challenge Ms. Figueres’ promise of a government-regulated “Global Business Deal”, when she appeared at the Yale mixer yesterday. We asked her, “wouldn’t it be more accurate to say that the UN is stalling and the private sector is moving, at least in terms of new technology investment and the carbon market?” Ms. Figueres pushed back, asking which companies take risk for public goods, and the conversation concluded with a general agreement that the public sector should set incentives for the private sector to find innovative ways to make industry more efficient at scale.
But rather than wait for an agreement at COP, carbon markets are emerging apace with fragmented, country-specific regulations, trading regions, and levels of enforcement. Is such fragmented market development a welcome attempt at getting the ball rolling, or will these markets engender regulatory loopholes that breed environmental and economic inefficiencies? Whether or not national trading schemes can achieve domestic implementation or international linkages, the fact remains that business is moving along with or without the “Global Business Plan,” that the UNFCCC promises. Put simply – should the Durban talks fail to offer a clear, regulatory framework for climate finance, “green investment” risks being as unregulated and hazardous as the investment bubbles that have infamously preceded it.
(This post is an accompaniment piece to “China’s Panda Market: a Bull or a Bear for International Carbon Linking?”)