Geneva – WBCSD President Björn Stigson gave a keynote address to an informal meeting of Finance Ministers, who were invited to Geneva on September 2 and 3 by the Swiss Government to discuss how to secure and leverage financing to curb global warming, ahead of the UN Climate Conference in Cancun. Governments were focused in Geneva on identifying sources of the USD 100 billion of annual funding by 2020 that was committed under the Copenhagen Accord and how a new climate fund could be structured. About 40 countries attended the conference.
“Business relies on a stable and well-functioning society to operate and deliver the goods and services people are asking for. We, therefore, welcome this opportunity to discuss with you the role business can and wants to play in resolving the challenges related to climate,” Mr. Stigson said during his remarks to the ministers.
“If we assume that we are aiming to limit climate warming to 2oC by 2050, then we are talking about the need to invest more than 2 trillion USD per year between 2010 and 2030 in infrastructure. The private sector is the main source of technology and investments in the world. The UNFCCC has estimated that 86% of the money required for investments in developing countries will come from private sector investments. Only when business and governments come together and develop partnerships to develop lasting solutions, real progress will be made towards a sustainable low carbon future.”
Referring to the Copenhagen Green Climate Fund, Mr. Stigson told the audience that 100 billion USD on its own will have limited value in financing the sort of investments required. It is how this money will be used to facilitate and leverage greater private sector investment that is the key issue.
“Business will invest in opportunities that offer good returns. The issue of how to increase investments in clean energy and clean technology is mainly a matter of making those investments more attractive. There are two main reasons for a private sector companies to invest in a particular country: The first reason is that it makes strategic business sense to be there long term. A second requirement is that it offers an adequate financial return adjusted for risks like political risk, financial risk, availability of skilled people and other resources, etc. Combining public and private funding can reduce the risk for investments and make them more likely to happen.”
Mr. Stigson explained that the “Green Race is on” to become the leading supplier of the green, resource efficient, low carbon solutions to the world. “This Green Race underlines that the climate negotiations are about economic and business development driven by global competition,” Stigson said. “The winner of the Green Race will have a dominant position in the future low carbon economy.”
In conclusion, Mr. Stigson outlined business’s view on the important role of governments, “Governments must provide the policy frameworks within which business can operate. This includes:
- Clear signals about future climate policies. Business often invests 30, 40 50 years into the future. Uncertainty about climate regulations will impact decisions.
- Measures to reduce risks in investments like combined funding of projects or risk guarantees.”
Source: WBCSD Press Release dated September 6, 2010.
