Corporate executives and investors say they want world leaders at next week’s climate summit to embrace a unified and market-based approach to slashing their carbon emissions.
The request reflects the business world’s growing acceptance that the world needs to sharply reduce global greenhouse gas emissions, as well as its fear that doing so too quickly could lead governments to set heavy-handed or fragmented rules that choke international trade and hurt profits.
The United States is hoping to reclaim its leadership in combating climate change when it hosts the April 22-23 Leaders Summit on Climate.
Key to that effort will be pledging to cut U.S. emissions by at least half by 2030, as well as securing agreements from allies to do the same.
“Climate change is a global problem, and what companies are looking to avoid is a fragmented approach where the U.S., China and the E.U. each does its own thing, and you wind up with a myriad of different methodologies,” said Tim Adams, chief executive of the Institute of International Finance, a Washington-based trade association.
He said he hopes U.S. President Joe Biden and the 40 other world leaders invited to the virtual summit will move toward adopting common, private-sector solutions to reaching their climate goals, such as setting up new carbon markets, or funding technologies like carbon-capture systems.
Private investors have increasingly been supportive of ambitious climate action, pouring record amounts of cash into funds that pick investments using environmental and social criteria.
That in turn has helped shift the rhetoric of industries that once minimized the risks of climate change.
The American Petroleum Institute, which represents oil companies, for example, said last month it supported steps to reduce emissions such as putting a price on carbon and accelerating the development of carbon capture and other technologies.
API Senior Vice President Frank Macchiarola said that in developing a new U.S. carbon cutting target, the United States should balance environmental goals with maintaining U.S. competitiveness.
“Over the long-term, the world is going to demand more energy, not less, and any target should reflect that reality and account for the significant technological advancements that will be required to accelerate the pace of emissions reductions,” Macchiarola said.
Labor groups like the AFL-CIO, the largest federation of U.S. labor unions, meanwhile, back steps to protect U.S. jobs like taxing goods made in countries that have less onerous emissions regulations.
AFL-CIO spokesman Tim Schlittner said the group hopes the summit will produce “a clear signal that carbon border adjustments are on the table to protect energy-intensive sectors.”
INDUSTRY WISH LISTS
Automakers, whose vehicles make up a big chunk of global emissions, are under pressure to phase out petroleum-fueled internal combustion engines. Industry leaders General Motors Co (GM.N) and Volkswagen (VOWG_p.DE) have already declared ambitious plans to move toward selling only electric vehicles.
But to ease the transition to electric vehicles, U.S. and European automakers say they want subsidies to expand charging infrastructure and encourage sales.
The National Mining Association, the U.S. industry trade group for miners, said it supports carbon capture technology to reduce the industry’s climate footprint. It also wants leaders to understand that lithium, copper and other metals are needed to manufacture electric vehicles.
“We hope that the summit brings new attention to the mineral supply chains that underpin the deployment of advanced energy technologies, such as electric vehicles,” said Ashley Burke, the NMA’s spokeswoman.
The agriculture industry, meanwhile, is looking for market-based programs to help it cut its emissions, which stack up to around 25% of the global total.
Industry giants such as Bayer AG (BAYGn.DE) and Cargill Inc have launched programs encouraging farming techniques that keep carbon in the soil.
Biden’s Department of Agriculture is looking to expand such programs, and has suggested creating a “carbon bank” that could pay farmers for carbon capture on their farms.
For their part, money managers and banks want policymakers to help standardize accounting rules for how companies report environmental and other sustainability-related risks, something that could help them avoid laggards on climate change.
“Our industry has an important role to play in supporting companies’ transition to a more sustainable future, but to do so it is vital we have clear and consistent data on the climate-related risks faced by companies,” said Chris Cummings, CEO of the Investment Association in London.