Is the Copenhagen Agreement a Disappointment or a Relief?

Is the Copenhagen Agreement a Disappointment or a Relief?

The climate treaty announcement is legitimately catching some heat for being too little, too late. The enormity of the crisis cries out for strong binding pollution reduction targets by all countries and massive infusions of public and private capital to catalyze a fast-track transition to a low-carbon economy.

But expecting we’d get all this at COP15 was never realistic. That’s why leading US businesses such as Nike, PG&E and North Face are encouraged by these first positive steps from Copenhagen.

Businesses are clamoring for comprehensive national and international policies that provide certainty that all countries are ready to work together to tackle this colossal challenge. They see strong mitigation commitments, full transparency and enhanced public financing — especially from developed countries such as the US — as essential building blocks for any future accord.

On all three of these fronts, advances were made.

President Barack Obama vowed this weekend to move America forward with national legislation that will reduce pollution, create new jobs and improve energy and national security. His pledge is exactly what US businesses want to hear.

“We welcome the president’s sense of urgency and recognition that companies need certainty and a level-playing field in order to move to a low-carbon economy,” Nike vice-president Hannah Jones told me.

Language for verifying emission-reduction efforts in developing countries is another encouraging step, although more work is obviously needed. Full transparency is critical for global companies such as Nike that compete and have operations in many of these countries. (Nike is the second biggest employer in Vietnam, for example.) Knowing that these emerging economies — and major facilities operating in those countries — are all playing by the same rules and doing their fair share to reduce their carbon emissions is another way of leveling the playing field.

But perhaps the biggest positive from the last 48 hours is the acknowledgment by the US that it must do more - far more - to boost mitigation and adaptation financing for countries most at risk from climate change impacts.

Last week, 30 leading U.S. businesses sent a letter to the president urging him to make “new substantial commitments” in this regard. The agreement by developed countries to mobilize $100bn a year by 2020 to help developing countries is a positive. Another positive is the growing awareness at COP that public financing has its limits and that creative new private financing mechanisms — mechanisms that can catalyze exponentially more private investment — are desperately needed to deploy energy-saving, low-carbon technologies on the global scale needed.

So, while they stopped short of calling COP15 a major victory, business leaders left Copenhagen with a tiny glow and, more importantly, a realization that most of the hard work still lies ahead. “I’m pleased with the recognition that all the world’s nations must come together in finding solutions that know no borders,” Letitia Webster, North Face’s corporate sustainability director, told me in an e-mail. “There’s an acknowledgment that climate mitigation and adaptation efforts must be everybody’s job regardless of where they take place.”

Mindy S. Lubber is president of Ceres and director of the Investor Network on Climate Risk, a network of 80 U.S. and European institutional investors with collective assets totaling $8,000bn.

This article originally appeared in the Financial Times.