Cut tax or we won’t go green

The Sunday Times
May 24, 2009

Tricia Holly Davis
THE leaders of some of the world’s biggest companies will descend on Copenhagen today to give governments a common message: “Help us make money out of going green, or we won’t bother.”
The timing and location of the World Business Summit on Climate Change is no coincidence. The United Nations will meet in the Danish capital in December to hammer out the successor to the Kyoto treaty on climate change, which expires in 2012.
The purpose of this week’s summit is to ensure that environmental legislation does not add unnecessary costs to balance sheets or undermine the investments that companies have already made to make their operations greener.
One of the biggest talking points will be how to rescue the global carbon market. The price of carbon has collapsed to about €10 a tonne this year — nearly 75% off last summer’s peak, which means there is less incentive for businesses to make green investments.
Alstom, one of the world’s biggest engineering groups, says this is a big obstacle to plans to clean up coal, the world’s dirtiest fuel. Industry needs a price of between ¤60 and ¤90 a tonne to make carbon capture and storage technology, which traps the exhaust gasses from chimneys and buries it, economically viable for a coal plant.
A report by the Carbon Disclosure Project and the green strategist AEA argues that industry needs grants and tax breaks to improve energy efficiency and deploy low-carbon technologies.
Erik Rasmussen, head of the Copenhagen Climate Council, host of the summit, will present a treaty outlining businesses’ demands on the final day of the meeting. The hope is that governments will meet at least some demands when they negotiate a new climate-change deal in December.
“If businesses and governments can’t agree, then our biggest problem isn’t climate change, it’s that we can’t tackle big problems,” said Rasmussen.