CEOs make climate recommendations to G8

20 June 2008

Recommendations on a post-2012 framework for global climate policy, backed by international business leaders, have been submitted by the World Economic Forum (WEF) to the G8 leaders ahead of their meeting in Japan. The businessmen see advanced nuclear power as part of the solution.

The recommendations were delivered by WEF executive chairman Klaus Schwab to Japanese prime minister Yasuo Fukuda, who is the current president of the G8 - the group of eight industrialized nations: Canada, France, Germany, Japan, Italy, Russia, the UK and the USA. The recommendations will also be circulated to each G8 leader, as well as those of China, India and South Korea, ahead of the Hokkaido-Toyako summit next month.

The recommendations have been endorsed by the heads of 100 global companies encompassing almost every industry sector, such as energy, utilities, aviation, automotive, mining and metals, logistics, information and telecommunications, and financial services. A multi-industry, cross regional steering committee - including nuclear utilities Duke Energy of the USA, Electricité de France (EdF), South Africa's Eskom, Tokyo Electric Power Co (Tepco) of Japan and Vattenfall of Sweden - led the development of the recommendations over the past 16 months.

In their recommendations, the CEOs urge adoption of a rapid and fundamental strategy by governments to bring about a low-carbon world economy. They call on the G8 and other developed country governments to provide leadership through deep absolute cuts in their greenhouse gas emissions, as well as direct work with the international business community to develop a pragmatic strategy of cost-effective, medium-term carbon abatement opportunities.

Facilitated by the WEF and the World Business Council for Sustainable Development (WBCSD), the recommendations are a mix of top-down and bottom-up measures that would collectively represent a major departure from the structure of the 1997 Kyoto Protocol if adopted by governments in the United Nations negotiations expected to end in Copenhagen in December 2009. Designed to be more environmentally effective and economically efficient than the existing climate regime, the recommended framework entails a much greater degree of collaboration between governments and businesses than has existed so far.


Speeding, mobilizing and spurring low carbon

The CEOs said their recommended measures are aimed at speeding the development and diffusion of low-carbon technologies, mobilizing financial support to help developing countries adopt such technologies, spurring changes in consumer purchasing behaviour, and establishing common metrics to create a positive dynamic of improved corporate benchmarking, disclosure and investment decision-making with respect to greenhouse gas mitigation.

At the same time, business leaders urge adoption of both a long-term goal, such as the aspiration to at least halve global emissions by 2050, and a series of clear intermediate targets to be achieved in the most cost-effective manner possible through the use of market mechanisms that create clear economic value from emission reductions, including a deep and liquid international market for carbon.

In the recommendations, WEF says that the choice of specific technologies should be left to markets rather than government, adding that "different countries will naturally follow different routes and choose different mixes." The statement said that "the new international framework should not seek to hinder these diversities; indeed, there will be pay-offs in learning from different approaches. For non-mature technologies [including fourth generation nuclear], however, markets will not be sufficient and enhanced RDD&D [research, development, demonstration and deployment] policies will have to be encouraged."

In a letter to prime minister Fukuda, WEF said: "in the best tradition of the business community, these recommendations are bold, pragmatic and clear. While recognising that there are still some uncertainties in the scientific and economic evidence available, these CEOs conclude that a responsible risk management approach to the issue requires political and business leaders to take action now."

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