Transcript of “Looking back at Copenhagen” film, January 2010
Alan Buckle, Global Head of Advisory: There was an incredible build up of optimism ahead of Copenhagen and it was difficult coming away not to feel, I guess, disappointed and a little bit confused about what exactly had been achieved with almost more commentary on who is to blame than actually what the implications were for us all going forward.
Barend van Bergen, Associate Partner, KPMG in the Netherlands: What struck me most Alan was the level of business engagement. I was at the Business Day with over a thousand business representatives. The panel featured seven or eight Fortune 500 chief executives and many other executives. In the past, I’ve seen UN meetings where literally business had five minutes of airtime during a three day summit.
Alan: It was great to see the level of business activity and involvement at the conference although the risk then is that just increases the level of disappointment if not enough actually came out of the event.
Barend: It’s not hard to point out the shortcomings. But there are also some major achievements. One, I would say, the science, for the first time, was undisputed; was widely recognised. Climate change is real and it’s man-made. For the first time, we had the objective to keep the rising temperature below two centigrade. For the first time, we saw developed countries - US - and developing countries – China - being involved in the discussion. And also we saw for the first time the developed countries jointly committed to US$100 billion by 2020 annually to support the developing countries. So I would say it’s fair, yes, although we see shortcomings - no legally binding treaty - but also a couple of breakthroughs and major achievements.
Alan: I think you’re absolutely right that this is part of a process and there were some real movements forward but I guess some of the targets that were set by certain countries were, you know, pretty dramatic.
Barend: Absolutely. I mean Japan and Europe and some other countries already had quite ambitious targets but let’s go back to these two major economies. The US for the first time proposed emissions reductions. So they proposed 70 percent emissions reductions by 2005 levels in 2020. All the way up to 83 percent emissions reductions by 2050. If you look at China, China always opposed targets while being in the process of development. And for the first time, they agreed to have those targets, 40 to 45 percent decrease of carbon intensity. That’s quite significant.
Alan: These are huge reductions. Eighty-three percent in the US and even if you’re a little bit cynical about the timeline, this is going to happen. Maybe for me there’s a parallel to the financial crisis. There were some institutions ahead of the crisis who maybe they didn’t quite see what was going to come but they saw the need to be ready for change and with climate change, almost the longer we take before we respond, then when the tipping point comes, the more significant the change will be for the world and for business. And I can see organisations right now who are going to win through this versus their competition, both in terms of reacting to the cost pressures and regulations but actually getting out in front and seeing business opportunities as well as just cost and issues to deal with.
Barend: I do see some similarities with the financial crisis like you pointed out. And I think you have to distinguish between the easy stuff, things that should have been done yesterday such as energy reduction and energy efficiency. They both drive out cost and carbon. Then there’s the hard stuff, like regionalisation of logistics, getting from globalised production through regionalised production. The more interesting is the middle ground. That’s where companies have to manage the paradoxes and the dilemmas.
An example from the shipping industry, this slow steaming, where the shipping companies talk to the shippers and have the vessels operate at a lower speed. There are some trade-offs; trade-offs between speed and flexibility, and again fuel costs and CO2 reduction. You might take a little bit more time but really save up to 30 or 40 percent on the fuel costs and the CO2.
Alan: So, in summary, although perhaps inevitably Copenhagen disappointed a little, what’s clear now is that there will be real activity coming from governments. No one’s arguing about the science. Some very challenging targets are being set, as you say, by the two most important economies and the opportunity now for business to be looking right ahead, making some significant changes, recognising what will come in time from government and being ready to capitalise on the opportunity as well as protecting themselves from costs and regulation. So the question now for me is, what’s next in this incredible process? We’re all off to Mexico and what’s our expectation going to be?
Barend: As for Mexico, I think it’s very hard to predict how it will play out. Obviously there are still lots of discussions and issues to be resolved. Personally I believe we will see a legally binding treaty for reducing global emissions in Mexico which will set us further on a road to low carbon economy.
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