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Show me the money!

December 12, 2009

Businesses have a crucial part in solving the climate change crisis we face. This was the discussion topic, ‘The Business of Climate Change Post Copenhagen’, facilitated by Cambridge University at Copenhagen along the sidelines of the COP15.

Much emphasis has been placed during the COP15 on political will. While coming up with a binding agreement is indeed important, this does not imply that all efforts against climate change has to come to a halt especially in the case of adaptation among developing nations. Instead, development can go ahead through business investments. Furthermore, once an agreement is settled upon, the real work really has to come through the businesses- as it is through them that investments are going to be carried out.

Business innovation is a challenge. The scale of transition is indeed huge and there is much to be done in creating technology that can adequately meet the energy requirements while keeping it all clean.

But within this challenge lies an opportunity. Through economies of scale, development of the energy would cost less. Less cost, more market, more profits! Now, ain’t that the main goal of every business!

That’s easy to say theoretically. The problem really lies in how nations needing to adapt to climate change get businesses to start adopting and investing in green technology- especially in nations which do not have the know-how themselves.

Firstly, there should be a level of development within the nation/region. The nation/region has to show that it will be able to support the company’s investments and spur returns. Development here refers to at least the basic provision of infrastructure such as roads and transportation and airport.

Looking beyond physical infrastructure, social infrastructure should also be provided. This has to come through the change in mindset among the people. They have to be receptive to change, the involvement of other companies which may not be of their nation’s which may be providing the technology. Basic labour requirements such as adequate supply and relevant training have to be provided.

Secondly, the nation has to show an interest in this development for the long haul. Companies have to be assured that there will be at most political stability, that governments are not going to pull out on their investments suddenly.

So again, it seems that we need to see political and national will before change can truly begin. But let us not overemphasize the role of the governments. Civil society and companies have to emphasize the need for governments to step up their game, because if they do not, the likelihood of businesses coming in to assist in the development is important.

The basic premise of my argument therefore is that nations can act on an individual basis in protecting themselves. More than adaptation, these are really basic requirements for development. The only twist is a focus on sustainable development and environmental emphasis.

However, within this argument, is a valid argument on why adaptation funds are so important. It is through these funds that basic development will come in which will then spur further investments to flow.

At the end of the day, as aptly mentioned by Dr Jeanne Ng of CLP Holdings Ltd, ‘where the money is, the businesses will follow’. And it really lies on the will of the nation to court them through showing the possible returns that can be gained.

Live from COP15
ECO Singapore

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