Is There Hope for Business after Copenhagen?

Two Steps Forward

Is There Hope for Business after Copenhagen?

I've been trying over the past few days to find some Hopenhagen in Copenhagen — that is, to see some positive outcome to the COP15 climate summit just concluded. The two-week event ended with a whimper, not a bang, a not-altogether-surprising conclusion to an overhyped event in which all parties had anticipating the entire world coming together to solve a single, critical issue affecting — well, the entire world.

When it was all over, the whole exercise — nearly 50,000 official attendees, and probably an equal number of unofficial ones, attending hundreds of events, from formal negotiation sessions to informal scrums of concerned souls conversing around a dinner table — seemed to be for naught, an exercise in futility born of a ideal that disparate parties could find common purpose in jointly solving global problems.

As you likely know by now, the Copenhagen Accord (download - PDF), which the summit ultimately yielded, is a meager statement cobbled together by five countries and "recognized," sometimes begrudgingly, by most but not all of the other 188 national delegations. It contained little that's new or actionable, acknowledging that "climate change is one of the greatest challenges of our time," that "deep cuts in global emissions are required according to science," and that "adaptation to the adverse effects of climate change and the potential impacts of response measures is a challenge faced by all countries." It recognized that actions should be taken to keep any temperature increases to below 2°C but contained no legally binding commitments for reducing greenhouse gas emissions. There are some multibillion-dollar financial commitments from developed countries to developing ones, but few specifics about where the money is coming from, or where it will go.

Was it a modest first step, a travesty, or simply a non-event? It's too soon to tell, of course, but pundits — those that aren't still shell-shocked, at least — already are spinning it in these and many other ways.

For companies, Copenhagen seems a setback, a lost opportunity, partly of their own making. As I've previously written, business executives were out in full force, whether speaking on panels, participating on workgroups, or seizing the opportunity to engage in wall-to-wall meetings with various other business folks, government officials, or NGO leaders present in Copenhagen. But business — at least the forward-thinking companies that have been pressing for more certainty about future carbon constraints and pricing — were not adequately represented at the negotiating table.

Some of this had to do with the fact that COP15 was a meeting of governments, each with their own issues about their economies, development needs, and energy and natural resource supplies. (Companies were represented only through business groups that were designated as nongovernmental organizations, or NGOs, and had the same status as activist groups and other nonprofits.) The interests of business seemed ill-represented in the negotiations, despite the fact that in most capitalist economies, companies are responsible for most of the emissions.

But it's much more complicated than that. During my brief stay in Copenhagen last week, I got a glimpse of the complexities and seemingly intractable issues the negotiators faced. For example, Brazil and Saudi Arabia feuded over whether and how to value their respective interests: avoided deforestation for the former and carbon capture and storage for the latter. Russia for a time held things hostage, negotiating to hold on to its massive store of carbon credits — one of the few positive things to result from its economic meltdown, since an idle economy tends to be a less-polluting one — past 2012, threatening to dump them all on the market at once if it didn't get its way, creating a glut that would lower their price to virtually nothing, potentially crashing world carbon trading markets. I'm sure there were many more of these governmental hissy-fits; much of it was beyond my knowledge or comprehension.

With all of these games being played, how could the bottom-line interests of business possibly compete?

The true business consequences of Copenhagen's COP-out will reveal themselves in the weeks and months ahead, as companies consider what, if anything, the summit's inaction means to their strategies and shareholders. I'll be among those watching closely.

What brings me solace amid all this is when I consider how far companies and technologies have come in recent years despite of any real political leadership on climate change. The Bush-Cheney administration did everything possible to maintain the status quo, even reversing what little climate progress had been made up to then. Yet during those years, the cleantech sector was born, blossoming into the global industry it has become. Renewable energy technology is on the march, growing rapidly in scale and efficiency in all corners of the world. Energy efficiency has become big business, especially in building retrofits, despite the near lack of regulation or energy or carbon price signals. Global companies are measuring, tracking, and reporting their carbon impacts, and an emerging industry of software tools, accounting services, and offsets is there to assist. The automobile industry has pretty much steered itself in the direction of electric vehicles. Even next-gen biofuels are looking viable these days.

Did I mention that I'm trying to find hope in all this?

Of course, all of this would scale much more quickly if the world's governments had risen to the occasion, providing a roadmap for companies to make investments, develop strategies, and innovate.

As a result, key questions loom large in COP15's aftermath: Will Copenhagen's impass stymie the corporate progress made to date? Will it give courage to the incumbent carbon-intensive interests (and their allied think tanks, politicians, and media outlets) that stand to lose in a low-carbon economy? Will companies continue their efforts to curb greenhouse gases? Will their efforts be at a scale and speed insufficient to address the problem at hand?

Is Hopenhagen still possible? I'd welcome your thoughts.