As a result there is a 'Green Race' emerging towards a more resource efficient economy. This presents huge opportunities for national and international economies which are recognised not only by businesses but also by countries.
More and more countries are taking note of this Green Race and are beginning to participate with serious ambition. Take for example the recent speech by US Energy Secretary Steven Chu. He labelled the success of China and other countries in clean energy industries a new 'Sputnik Moment', which requires the United States to mobilise its innovation machine to compete in the global race for the jobs of the future.
"When it comes to innovation, Americans don't take a back seat to anyone – and we certainly won't start now," said Secretary Chu. "From wind power to nuclear reactors to high-speed rail, China and other countries are moving aggressively to capture the lead. Given that challenge, and given the enormous economic opportunities in clean energy, it's time for America to do what we do best: innovate."
The European Union, under the direction of new Climate Commissioner Connie Hedegaard, has also changed their approach to climate change. They are now putting forward the Green Race arguments – the EU should act on climate change to protect its economic interests, jobs and economic growth. This is a clear shift from the 'moral crusade' for global climate actions which sidelined the EU at COP15 in Copenhagen.
Leveraging new technology
During the next 40 years, global population is expected to increase to 9 billion. According to the International Energy Agency (IEA), reducing carbon emissions effectively will require investments in low-carbon technologies of approximately 750 billion dollars per year by 2030, and more than 1.6 trillion dollars per year from 2030 to 2050.
About 70 per cent of the reductions needed could be achieved with existing technologies, but there is also a requirement to create new technologies. At the current rate, global low-carbon technologies are not progressing fast enough to keep up with the challenges of global climate change.
With this urgency in mind I must admit to being somewhat puzzled to see that in Cancún governments are debating a new international technology mechanism to help transfer and deploy technologies to developing countries and ignoring the global solution already in place – it's called business.
We develop, deploy and transfer technologies on a massive scale every day. Governments should try to further our ability to do this rather than try to replace or duplicate the work business is doing. Current negotiations should aim to enhance this system and to ensure that there are specific incentives put in place so that the poorest countries can benefit from these investments.
Trillions of dollars are needed to achieve the goals of emissions reductions and stabilisation of the climate; nevertheless, it is not a lack of funds that is holding investment back – but mobilising financing dollars into circulation.
What needs to happen
The leading economies of the world have 'seen the writing on the wall' – if they want to be a leading economy tomorrow, they must be able to supply resource-efficient, non-polluting systems, products and services today.
To succeed, a transformation of domestic markets is needed to build demand, capabilities and scale. This level of change can only be achieved in a new partnership between governments and business. Market forces alone are not strong enough to achieve such massive transformation. We need help from supportive regulatory frameworks to stimulate demand for new products and services. During COP 16, the World Business Council for Sustainable Development (WBCSD) released a report titled "Innovating for Green Growth: Drivers of Private Sector RD&D".
The report demonstrates that the Green Race between countries and companies offers significant opportunities for businesses to invest in the fast-growing, low-carbon technology market. It offers suggestions to governments on how to leverage research, development and demonstration (RD&D) to drive private sector investments.
Focusing on these recommendations will help ensure acceleration of innovative low-carbon technologies that will be the foundation of any global agreement.
Countries will ultimately determine the playing field, but they cannot achieve success without business as the partner who provides the bulk of solutions. That isn't to say business can continue to sit idly by. The private sector has been lacking in action as a result of the financial crisis. When it's given the appropriate triggers, business must and will spring to life.
Bjorn Stigson is President of the World Business Council for Sustainable Development. (IPS/TerraViva)