Magazine article New Zealand Management

Act Now on Climate Change

Magazine article New Zealand Management

Act Now on Climate Change

Article excerpt

How much can change in 18 months. The tone of last month's second Australia New Zealand Conference on Climate Change and Business in Adelaide was in stark contrast to that of its predecessor in Auckland 18 months earlier. In Auckland, there had been little agreement among scientists, business leaders, politicians and NGOs on the status of climate change let alone what we should be doing about it.

The latest conference was marked by a profound sense of urgency and unison of action between these groups. In Adelaide, speaker after speaker, whether a leading scientist or chief executive of some of Australasia's largest companies, appealed to governments to set policy frameworks within which long-term investments--particularly in energy-related projects but also throughout the wider economy--could be made. The notion of assets getting stranded through policy reversals and U-turns is very real.

As business leaders, we reduce energy emissions because it makes good sense to do so, but we can't do this in a vacuum. This need for clarity and long-term frameworks has been evidenced here by the Government's recent change of heart over the carbon tax.

After retreating from a carbon tax in December 2005, the Government needs to move quickly now to establish a carbon market which is capable of providing some surety on the cost of carbon now and in the future. This principle seems to be supported by our Climate Change Minister David Parker. He said he favours a market process to set a price and thereby limit volumes of carbon to the atmosphere.

Notwithstanding that the Australian Federal government hasn't ratified Kyoto, Australian business and state governments clearly now believe the science that climate change is very serious for Australian business, agriculture and society generally. As one scientist put it, "If the planet was your farm, Australia would not be your first choice as a paddock." This has led to a major shift in people's attitude from debating whether climate change is real to asking what the impacts will be and, more importantly, what we can do about it.

The conference heard how United States business, often said to be lagging behind on climate change, is taking action. Global enterprise 3M reduced its carbon footprint by 37 percent between 1990 and 2004 and saved more than USS 190 million as a result, and IBM saved US$791 million, reducing emissions 37.8 percent from energy conservation measures.

And whilst economies such as China and India may be developing at a frenetic pace, it is not true that they are ignoring the implications of climate change. In fact nearly all of their major energy projects have emissions targets built into them and they are now active traders in global carbon markets. Carbon dealers and international traders report millions of dollars being traded in European and US markets as business people are reading the inevitability of the climate change market and are hedging their positions. …

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