Capitalising on Copenhagen: what are the implications and opportunities for UK plc?

VIDEO OF SPEECHES AVAILABLE: www.actoncopenhagen.decc.gov.uk/en/ambition/achievements/january/capitalising-copenhagen/.

Media coverage: http://www.environmental-finance.com/onlinews/1401uks.html

Our host for the evening, Lord Smith, Chairman of the Environment Agency, opened the reception, with a warm welcome.

He noted that the outcome of Copenhagen “was disappointing [as] we did not emerge with the sort of international agreement that we desperately need going forward if we’re going to tackle the challenge of climate change effectively.” However he also cautioned against writing the Summit off as a disaster. “It wasn’t. There were some good fundamentals put in place in Copenhagen … [which] were actually in quite substantial measure down to the man standing here on my right, Ed Miliband.”

Ed Miliband MP, Secretary of State for the Department of Energy and Climate Change thanked the Aldersgate Group for the invitation and the evening’s sponsors, Drivers Jonas.

“I really want to thank the Aldersgate Group for the coalition that they have put together around climate change and around Copenhagen and I think we owe you a big debt of gratitude for all the work that you have done and indeed everyone in this room for being supporters of Copenhagen.” He acknowledged that Copenhagen was a disappointment, not because the legal treaty was not finalised, but more disappointingly because “we didn’t get the agreement for the need for a legal treaty.”

However he concurred with Lord Smith’s view, that “it was a disappointment, but the year itself was a success … I genuinely believe that the world moved in the course of the year, in a way that it wouldn’t have done without the coalition that was assembled.” Over the course of 2009 it was agreed that China, India, Mexico and South Africa would all take on target cuts and the United States moved towards a target. This, Mr Miliband argued, was indicative of a dawning awareness: “because countries saw it was in their own interests to move on this, they saw there was a low carbon race and that they needed to be part of it … I promise I’m not saying this just to console you: I think the shift is irreversible.”

In answer to questions taken from the floor, Mr Miliband confirmed that the Government recognises the current problems being faced by companies looking for green investment. He commended the work of the Aldersgate Group in putting forward the case for a Green Investment Bank and confirmed that DECC was working with the Treasury on this issue.  The UK was also engaging, where possible, with the European Investment Bank to secure the financing needed.

He also confirmed that the Government does want to move to a commitment to 30% emissions cuts, and that “I think that Europe will move to 30% personally, I think it’s right for the carbon price, it’s right for economics as well as for the environment.” In the forthcoming weeks, the Government will be tackling a series of issues including household efficiency, feed-in tariffs and a response to the recommendations of the Committee on Climate Change. “This thing is happening with or without the legal agreement at Copenhagen.” International commitments for emission cuts (due by 31st January) should be ratcheted upwards over the course of the year and the formal agreement should be strengthened.

Peter Young, Chairman of the Aldersgate Group thanked the Secretary of State.

The Aldersgate Group recognised the considerable skill and effort of the Minister’s department in leading policy and diplomacy at Copenhagen and Mr Young thanked the Minister for all his hard work. He added that “actions speak louder than words and I’m however not convinced that enough action is taking place in the UK.” We need to demonstrate to the rest of the world that is possible to have a prosperous economy based upon low carbon. He insisted that “there is still time for this government to lock in this country to a low carbon path.”

With reference to the General Election due to be held later in 2010, Mr Young emphasised that the momentum on these issues must be maintained and that we cannot afford “a year of paralysis”, if we are to hit the 20% emissions targets, let alone 30%.

Lastly, Mr Young introduced the following two speakers, “two visionary chief executives”.

Neil Carson, Chief Executive of Johnson Matthey thanked Aldersgate Group for the invitation to speak.

He opened with the question of what business wanted from Copenhagen. The Prince of Wales’s Corporate Leaders Group organised a Communiqué which nearly a thousand companies around the globe signed, calling for “an ambitious, robust, equitable, global deal on climate change. We didn’t get one.”

British businesses wanted certainty from the Copenhagen Summit before they took the next step. In the absence of that they will have to work on basic assumptions:

1) Future energy prices will be higher, which will prioritise resource efficiency and energy efficiency

2) “Future customers will value low carbon products.” This should be a significant driver for research and development, the standard timeline for which is five years, so “that is where the focus of your R&D needs to be.”

3) “However bleak it looks now, there will be a binding accord … so we’ve got to be prepared for it.”

If businesses start working on these assumptions, the transition to a low carbon economy will give UK companies a competitive advantage, “but UK plc will also get a competitive advantage, and if we power forward with these stringent targets … the rest of the world will follow.”

Mr Carson urged the Government to keep working for a global commitment to combating climate change. At home, it should invest in low carbon technologies to the same extent as that received by the renewables and nuclear markets.

Richard Brown, Chief Executive of Eurostar agreed with the importance of the role of business, but argued that businesses are principally driven by their consumers.

Eurostar was inspired to start its environmental programme upon being approached by customers, wanting to know their carbon footprint as a result of using their service. Mr Brown continued, “My worry, I have to say, is the impact of the portrayal of Copenhagen as a failure on consumer opinion and consumer attitudes.” Consumers, informed of China’s intransigence at the Summit, should not be allowed to feel that their efforts are not worthwhile.

Mr Brown argued that ”through labelling, through well informed, well presented information about different consumer choices, we have a role to play.” Businesses can help to motivate their consumers, just as consumers have motivated businesses in the past.

Mr Brown believed that a legally binding agreement should not be dismissed. It will be vital in order to secure a sensible price for carbon, and one that increases year on year.