What Happened at COP15

As BSR predicted, COP15 came down to hard bargaining between the United States and China, and the event materialized as much less of an end to climate policy than as a beginning. This turned out to be an understatement: no binding commitment was reached, and it is increasingly clear that an effective agreement will take much more than simply another meeting.

In terms of progress, views are mixed. Some have called it a complete failure. That is because leaders have been working on the issue for two decades and have had two years since Bali, where they agreed to develop firm action plans. Yet, at Copenhagen, nothing concrete or enforceable was produced; rather, negotiators simply agreed to have more talks, a result which the UN “took note” of—that is, acknowledged symbolically weakly.

Also, the process leading to that point was rather undiplomatic. A deal (the Copenhagen Accord) was rammed through by a few countries—notably the United States and China—without real involvement by the G77 or the EU in crafting it. This subverted the regular UN process while passing over details on critical issues like forestry and carbon markets.

On the other hand, there weren’t any surprises. In the time leading up to Copenhagen, it became clear that such a complex undertaking would require more than one event. That is due in part to the fact that U.S. President Obama cannot act unilaterally on behalf of his government, no matter how ambitious he may be.

The fact that there were no real walkouts or other disasters, and that a foundational political agreement was developed, shows that there was real progress forward. Moreover, Copenhagen proved that climate change has not only become a mainstream agenda item, but that it has become one of the most important political movements in history, with more than 100 heads of state involved (at Kyoto, there was only one there, and it represented the hosts).

On balance, it is disappointing that Copenhagen did not produce more needed clarity and predictability to encourage companies to invest in low-carbon energy, agriculture, and emissions markets. But perhaps there will be a method to this madness. There is still time to act, and we have the ability to ratchet up commitments once it is understood how these commitments contribute to jobs and investment opportunities. Also, for better or for worse, it appears that Copenhagen will spawn negotiations and forums among smaller numbers of large countries (such as the G-20), to expedite progress. This will likely increase opportunities for businesses to contribute in progressive ways.

As for next steps, Al Gore—someone who arguably has more insight into these negotiations than anybody—offers two things: First, why not keep up the momentum and hold COP16 in Mexico City in July 2010 rather than November? Second, says Gore, “The key to success remains as it has always been: to convince people one by one, person by person, family by family, community by community, of the need for the present generation to accept and understand the obligation we have for the future of humanity, to take the steps necessary in our time to safeguard their future.” Gore is referring to grassroots communication. Keep that in mind as the U.S. Senate debates American legislation—which will be key to building (or losing support for) multilateral commitments—this winter.

Originally published at BSR.

Corporate Climate Leadership at Copenhagen

On my third day at COP15, I presented at the International Emissions Trading Association panel, “Corporate Climate Leadership,” where I said that companies should consider three leadership activities:

1. Reach out to your key suppliers and ask them to improve their carbon efficiency. This will most likely mean focusing on energy, which drives two-thirds or more of greenhouse gas emissions globally and is an easy way for you to catalyze relatively large-scale change while saving money for your partners (and possibly your company).

2. Engage on policy. While supply chain energy efficiency presents an opportunity for scale, such change tends to be incremental, not transformative. That’s because with energy, price makes the market. Switching current systems to low-carbon alternatives that allow us to reduce global warming to 2°C or less will likely require policy that gives companies the price signal and durable investment certainty needed to invest. Companies that want to lead on climate should focus on advancing, informing, and enabling climate policy—in particular by influencing the fence-sitting U.S. senators and their constituents on climate legislation.

3. Go beyond climate to address planetary boundaries (of which climate is one of many) and ecosystem services. Climate is part of a broader sustainability picture, and it provides a platform for approaching resource efficiency, policy engagement, and other activities in these areas. Indeed, climate is critically important, but it is also interconnected with freshwater, biodiversity, agriculture, and other key issues and impacts.

Following my presentation, there was a lively debate about the relative importance of education, breakthroughs, and “coolness” in solving climate change.

Originally published at BSR.

Information, Please! The Knowledge Crux at Copenhagen

I spent half of my first day at COP15 in line, mostly outside, in the cold. But I was one of the lucky ones to eventually emerge inside the Bella convention center. Others waited for six hours or more only to be turned away at the door (if they even made it that far).

I don’t know whether I’ll make it back in on Friday, when I’m scheduled to present at the China Climate Registry panel. Word has it that the 15,000-person occupancy for the 35,000-plus who are registered will shrink by the day until virtually no one but government delegates is allowed in at the end of the week. We’re all bewildered. After all, we’re all on the invite list.

The problem is information. We could have used some pretty simple advice about what to expect as we planned our meetings at the event.

It occurs to me that information (in particular, the dearth of information) has become something of a theme with the climate negotiations.

On one hand, there is “Climategate.” In this case, U.S. policy crafters have been forced to defend themselves as news pundits and others have taken snatches stolen from private emails among scientists to put science itself on trial in the court of public opinion. In reality, nothing has yet come to light that implicates climate science in any fundamental way. Nonetheless, the fact that climate experts spent valuable political time and energy defending the validity of this information points to a continued gap between scientists and the public on opinions about climate science.

The issue of information—or rather how information is verified—is also one of the chief sticking points governing whether China will sign on to a climate treaty. The country is reticent to have outsiders monitor and verify its greenhouse gas emissions, yet assurance of climate effectiveness is needed globally. This need for robust auditing highlights a challenge that is especially thorny when done across cultures like China and the United States.

Business managers who live or die based on the effectiveness of global communication might think these problems are easily solved. A message to you: Your help is needed. Without business helping to communicate the best available information we have about climate science and showing the way for solutions that work on the ground in countries like China, climate policy will be slow in coming, and we may not achieve results that effectively unleash investment capital. And without such results, real progress on climate change is unlikely.

Originally posted at BSR.

Postcards from the climate negotiations in Copenhagen

I chose Thunderbird for my MBA largely because I knew that it was ahead of the game on two megatrends: globalization and sustainability. As a student, I found that the school delivered, preparing me for a career to take on these issues and the broad, difficult managerial decision making needed for research and innovation in sustainability consulting.

Since finishing in 2007 and then starting with BSR, I have learned a lot more about how those topics interact. Global management is essential for leading on sustainability because value chains go across cultures, and so engaging suppliers effectively calls for a softer hand than just demanding compliance. Also, starting with a global framework is essential for understanding the world’s myriad regulatory environments and consumer markets, in order to translate what’s coming to your company, and to know where to lead.

This week I am representing BSR at the “COP15” climate negotiations in Copenhagen, and here I find that these themes have never been truer. Ultimately, an effective global climate deal that’s good for business and the world will require a balance between asking the countries which have historically emitted the most greenhouse gases (industrialized countries, led by the U.S.) to change the most, versus those expected to emit a much larger amount in the future (developing countries, led by China). In reality, this is not an objective question, but a highly charged emotional one which raises deeper questions about equity and values, which are in turn based on enormously varied essential assumptions across cultures.

Such vexing cross-cultural problems are also found in the details. Currently, a chief barrier to a global climate deal looks to be China agreeing to its emissions being independently monitored and verified. The country is reticent to leave inspection to outsiders—it says out of principle—yet assurance of environmental effectiveness is needed globally. This need for robust auditing highlights a major challenge that is especially thorny when done across cultures like between the China and the U.S., where there are different tastes for ceremony, relationships, and formality when important issues are at stake.

If you want to do more on sustainability, you are in the right place at Thunderbird. Within its community, you have an opportunity to be at the forefront global management of the most difficult questions we face–and decisions companies address today about how to engage policymakers in order to best incentivize a more profitable and durable future for companies.

Originally published at Thunderbird School of Global Management.