Thursday, 17 May 2012

How does climate policy influence business behaviour?

By Vivienne Benson

With just over a month until world leaders will join thousands of participants from governments, the private sector, and NGOs in Rio for the UN Conference on Sustainable Development, the relationship between climate policy and the private sector is a timely issue.

Over the last few weeks here at IDS, our Business and Development seminar series has set out to understand how businesses seek to influence climate change policy and how climate change policy influences business strategies.

As Tuesday’s event with Del McCluskey was the final seminar in this series, I thought I’d ask: what have we learnt?
  1. While the price of carbon remains low, climate policy will have minimal influence on the behaviour of businesses. Jonathon Shopley, Managing Director of The CarbonNeutral Company explained that currently, there are $trillions of capital assets wrapped up in high-carbon initiatives, markedly overshadowing the market for innovative businesses seeking to develop low-carbon products and ideas. He argued that companies do try to influence Climate policy, as a means of protecting their capital assets and intellectual property.
  2. Rural development comes with mitigation and adaptation policies, they cannot exist separately.  Manuel Fuentes, Manager of International Development and Renewable Energy at IT Power argued that for mitigation and adaptation policies to be successfully implemented, the infrastructure has to be in place to support them. Government policy should reflect this. There is a risk of putting in place costly and unsustainable energy structures that would not protect a community from climate change. 
  3. If we want to engage business, we need to reframe the climate change debate. Iain Watt, Principal Sustainability Advisor, Forum for the Future explained that uncertainty about how the climate is going to change can deter organisations from considering how they can change their behaviour. The focus needs to be turned on its head, to how climate change will directly impact on individual businesses. Then companies can implement structures to ensure that their supply chain and direct services are not affected.
  4. Business can play a crucial role in bridging the knowledge gap between government and communities. Del McCluskey, Managing Director, Environment and Energy Sector of Development Alternatives Incorporated (DAI)  talked about a scaling up from communities who are already adapting to climate change and a scaling down from Government who prefer to favour tangible ‘hard investments’ over sustainable ‘soft investments’. 
So, will any of this be considered at Rio? Will businesses be listening? Will policymakers consider any of this? Watch this space…

Listen to all the seminars and interviews with speakers from this seminar series, and prior Business and Development seminar series on the IDS website. The next series will begin in September and will continue to look at the role of business in development.