Corporate Europe Observatory, 3 June 2009

“The Copenhagen Call” issued by  the World Business Summit on Climate Change presents a large number of corporations’ wish list for an international agreement on climate. While the Call recognises the importance of the climate crisis, the proposed methods to combat climate change are carefully crafted to fit the interests of big business. If adopted, it could result in such big loopholes that they could undermine even an ambitious agreement.

After three days of discussions, gathering some 700 chief executives from major corporations around the globe, the World Business Summit concluded on the 26th of May by applauding a statement prepared by the six convening coalitions behind the event [1]. “The Copenhagen Call” is supposed to not only be a unifying declaration for business, but a document the Danish hosts of the crucial United Nations climate summit in December can refer to as the position of business, in an attempt to pave the way for an agreement at the negotiating table [2] .

”Sweet music in my ears!” the Danish Prime Minister Rasmussen said when he received the declaration. The call had been prepared in advance, and with input from his own government, so the content should have been of no surprise to him [3].  

In fact, the whole “summit” was the Danish Government’s idea, and it invested considerable resources and political clout in organising it; they ensured the participation of the UN General Secretary Ban Ki Moon, helped bring together the alliance between the six convenors, and last by not least provided easy access to negotiators during and after the conference. As for the statement, the Danish Government has vowed to use it at the negotiations as a reference for the position of business[4]. For this reason, it’s worthy of attention.

Indeed, the document is a far cry from the climate scepticism that many of the companies represented at the World Business Summit adhered to in the 90s. The Call repeats the IPCC’s recommendation for emissions to peak in the next decade, and points to a target of a 17Gt reduction before 2020 [5] – a number derived from a study by McKinsey & Co. at the request of, among others, the Swedish energy company Vattenfall [6]. Although the Call mentions these targets without really committing or recommending them, and although these targets will not steer the globe securely away from disastrous scenarios, it’s still a step forward, compared to the key political declarations of the respective convening coalitions.

But reduction targets are not really the issue for the authors. The priority of business is clearly how these targets are achieved, and this is where corporate interests take first stage. And to an extent that the reduction targets can become unrealistic, if the implementation methods of business are adopted.

Send more money
The Call gives high priority to supposed technical solutions, to be developed with financial assistance. With the financial crisis and the ensuing stimulus packages, large scale state support to develop technology has become more realistic. In this regard the Call is full of appeals for state support to “low-emissions technologies”.

Don’t believe for a minute that this involves a strong emphasis on renewable energy. There is a strong allegiance towards both nuclear power, agrofuels and the development of carbon capture and storage in the six convening coalitions, and no doubt many of them would prefer to see the money go towards anything but renewable energy.

Corporate Europe Observatory’s analysis of the key policy statements of the six coalitions found only one mention of renewable energy [7]. And this was in brackets: "A number of low- and zero-GHG technologies (e.g. nuclear, renewables, fuel cells, clean coal and CCS) must be developed and commercialized over the coming decades"[8].

At the top of the convenors’ agenda are carbon capture and storage, nuclear energy and agrofuel. Pseudo-solutions that do not offer an effective response to the climate crisis. They delay real action, and divert public money from real effective solutions. They divert attention from the root causes of climate change while perpetuating a myth that they are fighting the problem, and adding to climate and social injustice as the poorest communities and countries which will not be able to afford to use them.

Carbon Markets
As expected, the Call puts forward a global carbon market as a key measure for achieving any given goal. Such a market, they seem to believe, will ensure both cost-effectiveness and “deployment of technologies that will deliver large-scale emissions reductions,” [9].

How do they come to that conclusion? Certainly not from experience. The only real cross-border experience with carbon carbon trading has been the European Union’s Emissions Trading Scheme (EU ETS), which has resulted in no net reductions to date . In the first phase of the experiment too many quotas were handed out to business, and as a result, there were so many pollution permits on the market, that prices plummeted. With cheap extra pollution permits available, there was no incentive to make real cuts in emissions [10]. What is more, the introduction of “offset” credits (by linking it with the Clean Development Mechanisms – CDM), or the banking of credits for future use from the period 2008-2012 render any measures aimed at correcting allocation totally ineffective. All these loopholes are in great part the result of heavy lobbying from industry.

Despite this experience, the business community pushes carbon markets. It is after all a mechanism   that gives ample space to continue “business as usual”. Could the EU-experience be repeated on the international level? What if they simply put a “cap” on emissions and then let corporations trade pollution permits? Wouldn’t that work?

Here’s what Oscar Reyes from Carbon Trade Watch heard James E. Rogers of Duke Energy (US) say on emissions trading in the US at a workshop on carbon markets at the World Business Summit:
“In the early years the allowances were so cheap that we bought them up and by the time we started retrofitting, the scrubbers were in the third generation of technology, so the cost of compliance was far cheaper. So I am a true believer in cap and trade that works.” “Cap and trade that works” is apparently a system that doesn’t require an effort. Hardly a suitable goal for an international agreement.

Duke Energy has in fact been sued by the US authorities for exploiting loopholes in the sulphur emissions trading system. Now they’re pushing a system that could open the same loopholes internationally. In that regard the Call includes an offer from business to “a unified, coherent and reliable measurement, reporting and verification discipline leading to mandatory reporting” [11]. In the light of earlier calls from business for “flexibility” that developed into loopholes, this offer should be regarded with scepticism.

Sudden concern for forests
Carbon trading is one of the so called “flexible mechanisms” in the existing climate agreement, the Kyoto Protocol, which basically allows a country or a company to purchase reductions elsewhere rather than domestically. Broadly speaking these mechanisms have proven to be loopholes. Nevertheless, there is debate within the international climate negotiations as to whether these mechanisms should be expanded. The inclusion of forests and agriculture in the so called Clean Development Mechanism (CDM) is one part of the debate.

CDM allows polluters to gain rights to pollution by investing in climate-friendly projects in developing countries. Set up under the Kyoto Protocol, the CDM has so far failed to be convincing. Outright scams and weak monitoring mean that only a third of the emission reductions “bought” has any basis in real reductions [12]. It has had severe impacts in poor communities in the South and has benefited the worst polluters.

Even so, business is now keen to expand this kind of questionable method to forests and agriculture: “The private sector can play an important role in reducing deforestation, particularly in developing countries, through mechanisms structured to value conservation”, the Copenhagen Call reads [13].

It’s doubtful whether this will mean anything more than a way for corporations to buy their way out of reductions, and on top of this, it could exacerbate the struggle over land in the South and lead to massive marginalisation of the rural population. Statistics presented at the World Business Summit are disturbing; the key driver of deforestation in the South is subsistence farming [14].

If multinational corporations start taking an interest in deforestation, can we expect them to take the interests of the landless, the poorest of the poorest, into consideration? Many of these people have been pushed away from fertile land - and now there is a risk that they will face another obstacle in their attempts to survive.  Corporation will not be doing saving forests for the sake of biodiversity or the eco-system, but to avoid having to cut down emissions at their plants. Putting forests (and agriculture) into the Clean Development Mechanism is risky, to say the least.

Not if history teaches us anything.

No voluntary contributions
The World Business Summit was very much the brainchild of the Danish hosts of the December climate summit. It’s an important part of a strategy to get “the international business community” involved in the climate talks. When the Danish Government set this process in motion in October 2007, it hoped business would show a genuine voluntary commitment and come up with its own contribution. In the Copenhagen Call, this voluntary contribution is nowhere to be seen. In fact, the Call looks more like a wish list for implementation measures that fit neatly with their economic interests. Measures that could undermine even an agreement with ambitious reduction targets. Bearing in mind that the Call is meant to be a key document for the negotiations, thanks to bold offers from the Danish Government, monitoring the negotiations and working to stop the corporate capture of international climate policy is crucial.

[1] For a description of the six convenors, see website of Climate Greenwash Awards 2009; http://www.climategreenwash.org/business-summit
[2] The Copenhagen Call; http://www.copenhagenclimatecouncil.com/get-informed/news/business-call-...
On the Copenhagen Call and the status attached to it by the Danish Government, see Corporate Europe Observatory; “Climate Summit Inc.”, May 2009, page 6-7.
http://www.corporateeurope.org/system/files/files/article/climate-summit...
[3] Ibid.
[4] Ibid.
[5] A reduction of 17Gt id a calculation to meet the goal of stabilisation at 450 ppm (450 parts per million of greenhouse gases in the entire atmosphere), a target widely used which lots of the most recent climate science criticise as too weak.
[6] McKinsey study referred to in “The Business Case for a Strong Global Deal”, Copenhagen Climate Council, page 9.
[7]  See Corporate Europe Observatory; “Climate Summit Inc.”, May 2009, page 9. The following documents has been used:
World Business Council for Sustainable Development; ”Policy Directions for 2050”, “Policy priorities”, s. 3. http://www.wbcsd.org/DocRoot/bdA09BFxjVkjEeXJKjle/int_low_res.pdf.
Combat Climate Change; “Our Commitment – Drawing a Roadmap to a low-emitting society”, http://www.combatclimatechange.org/www/ccc_org/ccc_org/224546home/720282.... UN Global Compact; “Caring for Climate”, http://www.unglobalcompact.org/docs/issues_doc/Environment/CLIMATESTATEM....
The Climate Group; “Breaking the Climate Deadlock – A Global Deal for our Low-Carbon Future”, afsnittet om ti byggesten til en international aftale s. 11-13, http://www.theclimategroup.org/assets/resources//BTCDJune08Report.Fin.pd.... World Economic Forum & WBCSD; “CEO Climate Policy Recommendations to G8 Leaders”, juli 2008, “Overview and key messages”, s.8-11. http://www.weforum.org/documents/initiatives/CEOStatement.pdf.
Copenhagen Climate Council; “Manifesto”, November 2007. http://www.copenhagenclimatecouncil.com/about-us/manifesto.html
[8] World Business Council for Sustainable Development; ”Policy Directions for 2050”, page 5, 2007
[9] The Copenhagen Call, para 3.
[10] See for instance ”Smoke Alarm”, The Guardian, 3rd of April 2007. http://www.guardian.co.uk/business/2007/apr/03/carbonemissions.environme...
[11] The Copenhagen Call, para 2.
[12] See ”Disredited Strategy”, The Guardian, 21 May 2008. http://www.guardian.co.uk/environment/2008/may/21/environment.carbontrad...
[13] The Copenhagen Call, para 6.
[14]  “The Business Case for a Strong Global Deal”, Copenhagen Climate Council, 2009, page 15-17.