Leading CEOs from the largest corporations in the energy sector called on June 4th for the establishment of a global carbon market as a way to spur innovation, clean energy development, and the additional investments needed to steadily move to a global lower carbon economy.
The corporate leaders addressed more than a hundred legislators representing a broad cross-section of political parties from G-8 countries and major emerging economies such as Mexico, Brazil, China, India, and South Africa at two-day forum organized by GLOBE International, a worldwide network of legislators concerned with the environment
Tony Hayward, the newly appointed CEO from British Petroleum (BP), making his first keynote address since being appointed said, "We need to ensure that the costs of emissions of carbon dioxide and other greenhouse gases are included in the price we pay for everything - whether it be a television, a train journey, or switching on a light - all should reflect the cost of emissions in that price."Â
Hayward added that "The price mechanism, set by the interaction of supply and demand, is perhaps the most powerful economic force ever discovered by mankind. I believe that unlocking the ability of a competitive market to innovate and change behaviors will achieve the lost cost solution to climate change."Â
The idea that consumers, business, and Governments are becoming more aware of the cost of carbon reflects a growing consensus among business about the need of establishing a transparent price of carbon.
Jim Rogers, CEO of Duke, one of the largest power providers in the US, said, "It is really important that we have a price for carbon because it will drive future development of technology, research and development, and investments, leading also to a change in consumer behavior."Â
Rogers endorsed the call for a long term regulatory framework. He emphasized that, "It is critical that a long-term broad international post-2012 framework is developed. We should aspire to have all countries participating, recognizing the differences in capabilities and thus developing requirements which reflect these differences."Â
Speaking about recent developments in the US on climate change, he explained that "Business, Congress, and the Administration recognize the problem."Â But he underlined that "a sense of urgency in answering it is needed."Â
Reflecting a paradigm shift influencing business models in these leading companies, Lars G. Josefsson, President and CEO, Vattenfall AB, said "Emissions reductions must create value from the market player's perspective. By pricing emissions we can use the power of the market to initiate and implement change. We already have access to technology that will enable us to reduce emissions, and we can increase the range of technologies available if we are prepared to invest in research and development."Â
Addressing the issue of the costs of clean energy he added, "The total costs of this 'switch' depend primarily on how it is carried out. Abrupt changes that create economic shock-waves or belated measures in the form of emergency cutbacks will prove very costly. Sustainable and long-term measures can reduce the total costs to very low levels."Â
For, Andrei Marcu, head of the International Emissions Trading Association (IETA) which represents market operators, "The call for the creation of a global carbon market, starting at the regional level, ensures that business can plan to rapidly move towards a low carbon economy guided by clear price signals."Â
The two-day Berlin Forum to be concluded this Monday is expected to send a strong message urging G-8 leaders meeting June 6-8 in Heligendamm, Germany, to seize the opportunity and achieve a breakthrough that will contribute to the success of United Nations' climate change conference expected to take place in Bali, in December 2007. -The World Bank
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