Tuesday, June 24, 2008

Like Giving Crack To The Drug Addict


Alcoa, Shell Want Climate Plan, Global Carbon Limits
By Alex Morales

June 20 (Bloomberg) -- Alcoa Inc., Royal Dutch Shell Plc and 97 other companies are urging world leaders to devise a plan for fighting global warming by setting greenhouse-gas targets for all nations and creating an international carbon market.
A new climate-change treaty is needed with incentives to capture and store carbon dioxide and protect forests, the 99 companies said in a statement prepared by the World Economic Forum, a Geneva-based business coalition. The group presented the proposals today to Japanese Prime Minister Yasuo Fukuda, who hosts a meeting of the Group of Eight nations next month in Japan.
Oil, power and metal industries are among the biggest emitters of greenhouse gases blamed for global warming. To cut their output in half by 2050, an extra $45 trillion must be invested in clean-air technologies, the Paris-based International Energy Agency said this month. The business group said it wants government guidance on how new climate policies may affect investment decisions.
``The report makes clear that businesses can't operate in a policy vacuum,'' Willie Walsh, chief executive officer of London- based British Airways Plc, Europe's third-largest airline, said in a conference call yesterday. He is one of 16 corporate leaders who developed the proposals.
The group, representing 10 percent of the market value of the world's listed companies, also is led by Jeroen Van der Veer, chief executive officer of Shell, Europe's largest oil company, based in The Hague; Chairman Alain Belda of New York-based Alcoa, the world's third-biggest aluminum producer; and Chief Executive James Rogers of Charlotte, North Carolina-based Duke Energy Corp., owner of electric utilities in the Carolinas and the U.S. Midwest. Klaus Schwab, founder and executive chairman of the World Economic Forum, presented the proposals to Fukuda in Tokyo.
Green Industry
``This is the first time you've had an international group of business leaders set out in a great degree of depth their vision for what the new framework should look like, and put their name to it,'' Dominic Waughray, the World Economic Forum's head of environmental initiatives, said in a telephone interview.
To limit the risks of global warming, a ``paradigm shift to a low-carbon economy'' is needed, the companies said in the statement prepared by the Forum and the World Business Council for Sustainable Development, also based in Geneva. The statement called for a ``green industrial revolution,'' with rich nations taking the lead in cutting greenhouse gases and developing a global market for carbon credits, or permits to pollute.
``We see enormous opportunity here for the global financial industry,'' Caio Koch-Weser, vice chairman of Frankfurt-based Deutsche Bank AG, Germany's biggest bank, said on the conference call. An emissions treaty enforced beyond 2012 might produce ``the makings of the global carbon market, with carbon almost as a currency 10 years from now.''
New Accord
World leaders aim to reach an accord by the end of 2009 to limit emissions, replacing the Kyoto Protocol, which expires in 2012. Negotiations have stalled because of disagreement over what commitments different countries should make. The U.S. says it won't agree to binding targets unless China and India also agree to limits. Those nations say it's up to the industrialized world to first control emissions.
``We need strong leadership from governments to enable the business community to take advantage of opportunities,'' British Airways' Walsh said.
Under carbon trading, companies are given emission limits and enough permits to meet that cap. If they undershoot, they're able to sell those excess credits to other businesses that are unable to meet their targets.
`Unambiguous' Goal
``The new framework must be designed to harness the power of the market,'' the chief executives wrote in the 12-page proposal. ``A well-designed market-based framework in developed countries that enables the emergence of an international market for carbon can help catalyze the required flows of private capital and clean-energy technology to developing nations.''
The new treaty must include an ``unambiguous'' international goal to cut emissions, the companies said, suggesting a target for 2050 to halve output of the gases, produced mainly from burning fossil fuels. All major economies should be involved, including developing countries such as China and India, which have no binding targets under Kyoto, the companies said.
The proposal called for incentives to avoid cutting down forests and to develop technologies including solar energy, nuclear power, and carbon capture and storage, or CCS, an experimental technique that removes carbon dioxide from factory and power-plant exhaust and pumps it underground for storage.
Carbon Capture
``Acceleration of the demonstration and deployment of a range of CCS technologies is particularly important,'' the report said. ``If all new coal-fired electricity generation plants are not operating with CCS from 2015 to 2020 onward, it will be difficult to realize the target of a 50-percent reduction in global emissions by 2050.''
The executives also said licensing agreements and funds are needed to allow clean technologies to be used in poorer nations.
While no companies from mainland China have endorsed the plan, Rick Samans, managing director of the forum, said invitations are there for Chinese firms to sign up. Walsh and Koch-Weser said awareness of climate change is high among Chinese business leaders.

No comments: