At the Aspen Ideas Festival, World Bank Vice President and Special Envoy for Climate Change Rachel Kyte talks about climate resilience and how it can create opportunities for all people while protecting all people. Women and children make up a large number of the extreme poor, who are among those most at risk from the impacts of climate change.
At the UN Climate Summit in September 2014, Secretary-General Ban Ki-moon called for the private sector to drive more action and mobilize political will for a meaningful agreement in 2015. Last month, business and government leaders from all around the world came together in Paris at the Business & Climate Summit and at Carbon Expo in Barcelona to make a united call for ambitious actions that will allow the scaling up of workable solutions to climate change. Given the pressing challenge, the private sector is grappling with the reality that sustainable business means de-coupling economic growth from rising carbon emissions.
The headline coming out of the Summit was the steady call from the business community for a price on carbon. CEO after CEO from a diverse range of companies came on stage to tell governments that the only way for a smooth transition to a low-carbon economy is through clear, predictable price signals that will allow them to invest in an efficient and sustainable manner. A week later, six European oil and gas companies made news by calling for a globally coordinated price on carbon emissions. This represents a major change in mindset from the business community. Just a few years ago, no one would have expected calls for a carbon price from the private sector, especially not from the oil and gas sector.
So, why are some of the leading private sector companies calling for action on climate change?
This weekend, the leaders of the G7 committed to a series of actions that mark their first serious recognition of the economic transformation that is ahead of us.
Collectively, they recognized the need to decarbonize the global economy, enshrining in economic cooperation what the scientists in the IPCC told us last year in their Fifth Assessment Report. They called for ambition at the Paris climate talks this year – not new, but they recognized that they, individually and collectively, need to be in the upper part of the ambition bracket and that that means at least a “transformation of the energy sector by 2050.”
They talked about the mobilization of capital for this transformation, as well as ending the increasingly profligate use of harmful fossil fuel subsidies. Recognizing the need for an orderly transition to low-carbon growth as quickly and as smoothly as possible, they took on some degree of leadership around the pledge to provide $100 billion in climate finance for developing countries from public and private sources before 2020. More on that in a moment.
Eldar Sætre is president and CEO of Statoil. He was one of six oil and gas company CEOs who issued a joint call to governments around the world on June 1 to put a price on carbon.
"Statoil has for some years called for a price on carbon because we know that carbon pricing actually works. If more governments put a price on carbon, other businesses will follow suit and quickly.