NGI The Weekly Gas Market Report / NGI All News Access

BP, Shell Support Climate Change Measures at UN Summit

World leaders must agree on "an ambitious, robust and equitable global deal on climate change that responds credibly to the scale and urgency of the crisis facing the world today," according to The Copenhagen Communique, a statement published last week by the business leaders of more than 500 companies from around the world that participated in the UN Summit on Climate Change in New York.

The group, which includes major energy companies such as Shell Oil Co., BP plc and EDF Energy, along with international business pillars such as General Electric, Coca-Cola and Johnson & Johnson, warned that business will suffer if a credible deal is not reached by the end of this year at the UN Climate Change Conference in Copenhagen, Denmark.

The companies call for emission reduction targets to be guided by science and to offer support for the emerging consensus to limit global average temperature increases by less than two degrees Celsius compared to pre-industrial levels. In turn, they recognize that this will require global emissions to peak and begin to decline rapidly within the next decade and ultimately decline by 50-85% by 2050.

"The solutions to climate change are there to be grasped, but time is short," said James Smith, chairman of Shell UK and a member of the group. "In Copenhagen, nations will have to find common purpose as never before and clear the way for a truly global carbon market, underpinned by cap-and-trade and low-carbon technologies."

The views espoused in the published statement stood in stark contrast to the message put out at rallies beginning last month by the employees of some energy producers (ConocoPhillips, Anadarko Petroleum Corp. and Chevron Corp., to name a few) and business organizations, that want to prevent passage of the climate change bill now before Congress. Noticeably missing from last month's rallies were employees from BP America and Shell Oil Co. (see NGI, Aug. 31).

Speaking before the UN Summit on Tuesday, President Obama said the United States is "determined to act" as the "threat from climate change is serious, it is urgent, and it is growing." He noted that no nation, however large or small, wealthy or poor, can escape the impact of climate change.

"Yes, the developed nations that caused much of the damage to our climate over the last century still have a responsibility to lead," he said. "And we will continue to do so by investing in renewable energy, promoting greater efficiency, and slashing our emissions to reach the targets we set for 2020 and our long-term goal for 2050."

Obama added that the journey will be long and hard and there is not "much time left to make it," but the world will need to "fight for every inch of progress," so it should begin now. "We must seize the opportunity to make Copenhagen a significant step forward in the global fight against climate change."

A copy of The Copenhagen Communique was distributed to UN Secretary-General Ban Ki-moon and more than 100 heads of state and governments attending the summit. The statement has already secured the support of companies based in more than 50 countries (including the United States, European Union, Japan, Australia and Canada, as well as Brazil, Russia, India, China and South Africa), ranging from the world's largest companies and best-known brands to small and medium size enterprises and across a wide variety of business sectors.

"These are difficult and challenging times for the international business community and a poor outcome from the UN Climate Change Conference in Copenhagen will only make them more so, by creating uncertainty and undermining confidence," the statement said. "Economic development will not be sustained in the longer term unless the climate is stabilized," and say it is "critical" that "we exit this recession in a way that lays the foundation for low-carbon growth and avoids locking us into a high carbon future."

The business leaders urged developed countries to take on "immediate and deep emission reduction commitments" and "demonstrate that low-carbon growth is both achievable and desirable" and provide the necessary financial and technological assistance to developing countries. They call on developing countries to draw up their own emission reduction plans, and call on advanced developing countries to adopt economywide commitments by 2020.

The issue of financing for climate change mitigation and adaptation more generally is one of the most contentious issues in the climate negotiations, the group claimed, with a variety of estimates suggesting that US$100-200 billion will be needed annually by 2030 to help developing countries reduce their emissions and adapt to the climate change already being experienced. In the statement the business leaders argued that "the costs of transition are manageable, even in the current economic climate. The more ambitious the framework, the more business will deliver" but that "delay is not an option."

Tackling carbon dioxide (CO2) emissions would mitigate global warming but also would be a boon to employment and gross domestic product (GDP) in the world's major economies, according to a new report by international nongovernmental organization The Climate Group.

The report, titled "Cutting the Cost," claims that global collaboration could significantly cut the cost of climate change mitigation and aims to give confidence to world leaders who recently met at the UN General Assembly and at the G20 meeting in Pittsburgh and who are to meet at the Copenhagen climate summit in December.

The findings indicate that under a global deal involving all countries, efforts to cut emissions can:

"The enormous cost savings that can be achieved if countries act together are striking," said Tony Blair, former UK prime minister and founder of the Climate Deadlock Initiative. "Even ignoring the costs of climate change itself, the world can benefit economically from action to cut emissions."

According to the report, the reduction in necessary carbon price that accrues as more countries participate in CO2 reduction efforts "is a simple reflection of the larger pool of low-cost carbon reduction opportunities available under a multilateral agreement and the fact that, as markets grow, new technologies become commercially viable. Results show it would take a carbon price of $65/ton of CO2 for the EU [European Union] to cut its energy-related CO2 emissions by 30% by 2020 operating alone. This falls to $28/ton of CO2 when the U.S. joins in an agreement, and potentially to very low levels (about $4/ton of CO2) in the case of a global agreement."

Blair presented the report to Ki-moon at the opening ceremony of ClimateWeek NYC last week.

©Copyright 2009 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus