Climate change targets tightening – the world needs a private sector solution
The latest round of climate talks, COP25 in Madrid, finally concluded this week with not a lot to shout about in terms of progress towards raising climate control ambitions. But while the focus is on governments, the private sector has a key role to play in closing the gap between the current state of play and the more demanding science-based target of keeping global warming to sub 1.5˚C.
That was the message in a white paper published earlier this year by the joint sustainability framework organisations GRI and CDP, entitled ‘Engaging business in the NDCs’. While more than half of the NDCs (Nationally Determined Contributions) submitted under the terms of the Paris Agreement involve consultations with the private sector, there is a lack of clarity about exactly what contribution the private sector will be required to make.
GRI and CDP make three recommendations for policymakers to make more of the sustainability potential private businesses:
- Include clear targets for private business contributions
- Set up efficient and transparent monitoring processes that include data from the private sector
- Provide support to ensure the engagement of the private sector
For businesses, the incentives to engage in the NDCs are two-fold: 1. It will create business opportunities; and 2. It will lead to heightened efficiency, saving cost and increasing productivity. The white paper also recommends that policymakers incentivise private businesses with financial rewards.
GRI and CDP cite several examples where the two-way engagement between government and private sector is working to good effect. In Benin, for example, mitigation measures carry a 2030 target, with explicit mentions of costs and the conditions required. Chile has set clear quantitative targets for emissions targets per sector.
The Republic of Korea has created a measuring, reporting and verification system for assessing the contribution of industries and sectors with large greenhouse gas emissions. Cape Verde has declared its intention to develop market-oriented policies and incentives for engaging the private sector, such as the creation of competitive market conditions and the consideration of special fiscal incentives for relevant sectors.
If governments are to pledge their commitment to the sub 1.5˚C target – and stick to it – they need the private sector to join in. As the white paper points out, business “has the space and opportunity to set more ambitious targets”, for example through the Science Based Carbon Target (SBCT) initiative.
The talks in Madrid were the most drawn out yet, as big industrial nations like the US, China, India and Brazil pushed back against the new targets. The whole show ended in compromise, with countries agreeing to table their new, improved carbon cutting plans at next year’s summit in Glasgow. So the British government has one year to get its act together and start leading by example if it is to provide credible leadership at COP26. For that to happen, it needs the private sector to step up.