The World Bank has given its strongest signal to date that it will work with private sector organisations that have embraced the need to tackle climate change in the face of political opposition in countries such as the United States and Australia.
In an interview with Emerging Markets Rachel Kyte, World Bank vice president and special envoy for climate change, said that while a “big chunk” of businesses in the US had seen the need for a mechanism to put a price on carbon emissions, there were “constraints on federal leadership”.
For the first time, a high-level climate ministerial meeting is being held at this week’s annual meetings that brings private sector leaders into the debate over the climate challenges that countries are facing and policies that could help solve them.
The chairmen and chief executives of more than 1,000 businesses have joined the leaders of 73 countries and 24 states or regions to support the idea of creating a global price on carbon as a tool to ensure that a reduction of the volume of harmful greenhouse gas emissions.
Kyte said she wanted to build on the “extraordinary response” of firms and regional governments such as the states of Oregon, California and Washington at the recent New York summit. “We saw a big chunk of the US economy in favour of carbon pricing,” she said.
Business leaders who have thrown their weight behind carbon pricing include Willie Walsh, CEO of International Airlines Group, Anthony Earley of PG&E Corporation, and Henri Proglio of French energy firm EdF.
“The truly visionary CEOs who can see around corners know that if we want a clean world and want to have air and oceans to sustain us, we have got to bring a productivity revolution to carbon.”
Her comments came as new figures showed the growth in the sustainable and responsible investment (SRI) market was outstripping demand by investors for traditional products. EUROSIF said demand for impact investing products had grown by 132% between 2011 and 2013 versus a general increase of 22%.
LEADERSHIP CHALLENGE
Kyte hit out at “climate deniers” in the US who claimed putting a tax on carbon was “anti-American and working against US jobs”. “There is nothing more American than meeting an innovation revolution challenge,” she said. “Why can’t this be the place where we figure out how to improve productivity by a factor of 10?
Climate negotiators must agree targets for emission reductions at the next global climate change summit in Paris in late 2015. One key milestone between now and then is the G20 summit in Australia.
Climate campaign groups have been angered by plans by the Australian government to exclude climate change from the agenda for the Brisbane summit. Premier Tony Abbott has already abolished Australia’s carbon tax and skipped the UN climate summit in New York last month.
Asked whether she was frustrated, Kyte declined to comment directly: “There are certain long term challenges facing the global economy and it helps when the G20 can keep a steady hand on the tiller.”