November 28, 2005

Canadian corporate leaders offer pre-UN conference advice on climate change, sustainable development

More than 20 of Canada's most prominent corporate leaders representing a broad cross-section of the national economy have released a call to action on climate change and energy. The statement, released November 17, was drafted at the request of Prime Minister Paul Martin to inform negotiations at the November 28-December 9 United Nations Climate Change Conference: Montreal 2005 with actionable business perspectives and recommendations.

It confirms the commitment of Canadian business to fostering a climate of change. Leading companies recognize the importance of working alongside government to stabilize the accumulation of greenhouse gases in the atmosphere and to minimize the global impacts of climate change.

The signatories call for the creation of a sustainable development strategy to 2050, with clear markers along the way to assure strong economic growth, allow the discovery of long-term value for carbon emission reductions and address the need for adaptation in the face of climate change.

In October, the Prime Minister asked the Executive Forum on Climate Change to provide the federal government advice on how to move forward in climate change negotiations in Canada and internationally.

"Through our collective actions, Canadian business is demonstrating that it is possible to foster a climate for change while maintaining competitive excellence, growth, and profitability. All governments and citizens, corporations and consumers have a responsibility to actively reduce greenhouse gas emissions and to develop long-term mechanisms to minimize the global impacts of climate change," said Alcan president and CEO Travis Engen on behalf of Executive Forum signatories.

The Forum's member companies point out that they are adapting their business practices where possible to reduce greenhouse gas emissions and to minimize the adverse impact of climate change. We believe that purchasing and producing renewable energy, investing in low carbon technologies, working to improve energy efficiency and offering new products and services aimed at reducing emissions are meaningful strategies for the business community to undertake. Many of us, they note, have improved company productivity and profitability as a result.

To help us do more, the statement continues, we need policy certainty for post-2012. We need a strategy now for the next 50 years, with short and medium-term targets to guide us. Governments must set clear markers along the way to unleash competitive market forces and allow the discovery of a long-term value for carbon emission reductions. Only then will we secure the deep reductions needed to prevent human interference with the climate system.

From a business perspective, the signatories propose a series of principles to guide the development by government of a climate regime. Such a regime, says the statement, should be based on good science and rational economics and should consider climate change in the broader context of sustainable development. It should also, among other things:

*minimize uncertainty through an announcement, well before 2012, of significant long-term quantified objectives to 2020, 2030, 2040 and 2050;

*emphasize urban regions as emerging players in achieving long-term energy goals, particularly a new, more distributed energy system;

*facilitate adaptation to climate change and the adverse impact of climate extremes;

*make effective use of market-based mechanisms, economic instruments and full-cost pricing as part of an integrated regime of regulation, standards, fiscal incentives and policy measures;

*stimulate innovation and significantly expand investment in research and development through public/private and international partnerships;

*create incentives to lower consumption and to change consumer behaviour; and

*encourage sustainable forestry and agriculture, particularly reductions in deforestation in developing countries.

The statement further notes that greenhouse gas targets and commitments for post-2012 should include energy supply- and demand-related milestones, including targets for green power, green heat and advanced biofuels, for energy efficiency and conservation, and for carbon dioxide capture, transport and sequestration.

The Executive Forum's recommendations encourage governments to:

*build on the foundation provided by the United Nations Framework Convention on Climate Change and the Kyoto Protocol to launch a process and work plan that would support development by 2008-2009 of an inclusive and climate-friendly post-2012 regime; and

*send a clear political signal that the Kyoto Protocol's mechanisms (Emissions Trading, Joint Implementation and Clean Development Mechanism) will be made to function effectively in the near term and will continue to operate after 2012.

The statement also calls for a reform of the operation of the Clean Development Mechanism, including provision by governments of stable funding for 2006-2008 to:

*hire professional staff team to manage day-to-day operations and technical panels and to support oversight by the Executive Board;

*retain consulting expertise to expedite completion and approval of methodologies; and

*increase communication and capacity among stakeholders and governments.

As well, it says, governments should agree to an adaptation package that supports the building of adaptive capacity through:

*investment in hazard information, risk assessment and warning systems;

*identification of best practices for building new homes, retrofitting existing buildings and public infrastructure;

*financial support for local investments in resilient public infrastructure; and

*public education to establish a culture of disaster preparedness.

Specific recommendations for Canadian federal and provincial authorities are presented as follows.

*A long-term national energy strategy should be developed to position Canada at the vanguard of new transformative energy technology, particularly where we have a comparative advantage. Domestic investments should be given priority over international to reduce greenhouse gases in the Canadian economy.

*Of particular urgency is the need for authorities to make strategic investments and incentives directed to world-class carbon dioxide capture, transport and storage and low-impact renewable energy, including green power, green heat and bio-refineries and advanced biofuels.

*Objectives should be set to meet global best practices for energy production and consumption through regulated standards, procurement, financial and tax incentives and market-based approaches such as emissions trading and trading of energy efficiency credits. Government and corporate procurement policies should be aligned with these objectives.

*Government authorities should ensure that the New Deal for Cities and Communities takes loss prevention and adaptation to climate change into account in long-term sustainability plans, infrastructure planning and investments with a focus on building resilient, sustainable communities.

*Canada's domestic adaptation response should be facilitated through investment in a risk assessment of 2* Celsius global average warming in Canada.

*A climate extremes strategy should be developed, focused on investment in public infrastructure, homes and buildings so they are resilient to damage from severe weather. The strategy should also include investment in hazard safety research and public education. Urgently needed in this respect is a strengthening of building efficiency and resilience through the National Building Code.

*Finally, the statement counsels more effective engagement of consumers, noting that they have a vital role to play in addressing climate change. Business and government need to collaborate directly with the public to establish a shared understanding about change in the climate, and actions required, adds the Forum.

Business and government must continue to work together to address climate change. We can jointly identify and implement policy measures that create meaningful and effective solutions, while at the same time ensuring long-term value.

Properly designed programs and incentives will unleash the power of the market to accelerate deployment of low carbon technologies and adaptation to climate extremes, engaging both producers and consumers. We are firmly committed to do our part on climate change. A co-ordinated response from the Canadian government and the other participants in the Montreal Conference will allow us to do even more, concludes the statement.

Led by the Canadian Centre for Policy Ingenuity (CCPI) and Alcan, the Executive Forum on Climate Change was launched to build on the work of the Group of Eight (G8) Climate Change Roundtable. This group was convened by the World Economic Forum in January 2005 in response to an invitation from G8 chair, U.K. Prime Minister Tony Blair, to provide business perspectives on climate change, which was one of two priorities for the G8 Summit this summer. The views of 24 global companies were presented to Blair in June.

The UN Climate Change Conference is historic as it is the first time that the 155 parties to the Kyoto Protocol will meet since the instrument's entry into force on February 16, 2005. The event will also assemble all 189 parties to the United Nations Convention on Climate Change (UNFCCC)-including the U.S.-for the eleventh Conference of the Parties (COP). More than 10,000 participants are expected to make the Montreal Conference the largest event of its kind in Canadian history. (EcoLog Week will be attending a portion of the conference and will provide extended coverage in our December 12 issue.)

More information is available from Louise Comeau, Canadian Centre for Policy Ingenuity,819-682-0794 Alexander Christen Alcan 514-848-8151. The full statement may be viewed on the Executive Forum Web site, www.climateforchange.ca.

Executive Forum Statement signatories

Travis Engen, president and CEO, Alcan

Bob Elton, president and CEO, BC Hydro

Laurent Beaudoin, chairman of the board and CEO, Bombardier

Russell Horner, president and CEO, Catalyst Paper

John Murray, president, CH2M HILL

Alban D'Amours, president and CEO, Desjardins Group

Doug Muzyka, president and CEO, Dupont Canada

Derek Pannell, president and CEO, Falconbridge

Annette Verschuren, president, The Home Depot Canada

John Wells, president and CEO, Interface Americas

Brian Foody, president and CEO, Iogen

Jack Cogen, president and CEO, Natsource Asset Management

André Desmarais, president and Co-CEO, Power Corporation

Clive Mather, president and CEO, Shell Canada

Frank Dottori, president and CEO, Tembec

George Cooke, president and CEO, Dominion of Canada General Insurance

David Wilmot, chair, Institute for Catastrophic Loss Reduction

Gregg Hanson, president and CEO, Wawanesa Mutual Insurance

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