Examination of Witnesses (Questions 36-39)
MR CRAIG
BENNETT AND
MR DAVID
HONE
19 FEBRUARY 2008
Q36 Chairman: Good morning. Welcome to
the Committee. We are very grateful to you both for coming in.
Would you just like to briefly introduce yourselves and explain
what your roles are even though some of us probably know that,
but it is helpful to the Committee generally.
Mr Bennett: My name is Craig Bennett.
I am Development Director at the University of Cambridge for Programme
for Industry. That is a department within Cambridge University
that specialises in working with senior executives to help educate
them more on sustainability issues and then to work with them
on helping to put those lessons into action. Within that department,
my role is principally about facilitating the Prince of Wales'
Corporate Leaders Group on Climate Change, which is a group of
20 companies that are advocating bold and urgent action from governments
on climate change. Crucially, companies are calling for regulatory
frameworks to give that long-term certainty for companies so that
they can invest in their own carbon technologies, and also really
calling for a whole range of policy interventions to drive that
low carbon economy. I facilitate the UK Corporate Leaders Group
and also the EU Corporate Leaders Group, which is a group of 17
companies across Europe that have a similar agenda but more on
a European basis.
Mr Hone: My name is David Hone.
I am the Group Climate Change Adviser at Shell. I work for Shell
International BV in the Netherlands but also I work here in London.
My role in Shell as Climate Change Adviser principally is around
development of Shell's policy positions on climate change, in
particular around emissions trading, the international mechanisms
and broad policy change across the economy.
Q37 Chairman: Thank you very much.
The Corporate Leaders Group made a strong call before Bali for
a legally binding framework on climate change. Would you just
like to explain why that call was issued?
Mr Bennett: Yes. I think in both
the UK Group and the EU Group, as Bali was approaching, in the
months running up to it, we felt we had to do something to really
engage with the international agenda and do what we could as business
groupings to really ensure that there was a strong business voice
going to the Bali negotiations, calling for an international legally
binding framework. So we took it upon ourselves to put together
the rather boldly called Bali Communiqué and I understand
you have had copies of this distributed in advance of this meeting.
It was really just one page of text making the business case for
why a bold international legally binding framework is necessary.
We realised, of course, that for this to really have an impact
we would have to get support from the international business community
and not just the companies that were members of the UK and EU
Groups. We were delighted with the results of that. Maybe I should
just talk through some of the key messages that were in that Communiqué.
The first was to say very clearly that the scientific evidence
of climate change is now overwhelming. We thought it was important
to do that although certainly within the European Union that argument
has been put to bed for quite a while now, but that is not necessarily
the case in every part of the world so we thought it was important
to say that. The second was really to emphasise that as business
leaders it is the belief of these Groups that the benefits of
strong, early action on climate change outweigh the costs of not
acting. What you see then is the Communiqué really emphasising
some of the key messages of the Stern Report. We did not mention
the Stern Report by name here but the messages in the Communiqué
are exactly those that were in the Stern Report, highlighting
there are all sorts of reasons why acting sooner rather than later
will be better for business in terms of reducing the long-term
costs and the negative consequences of climate change, but also
highlighting that for many companies there are significant business
opportunities to be gained through the creation of markets for
low carbon technologies and products. In summary, we summarised
that tackling climate change is a pro-growth strategy while ignoring
it will ultimately undermine economic growth, and we are familiar
with Sir Nicholas Stern's projections that it could be around
20% of global GDP that could be at risk if we do not act. Then
the companies go on to say it is their view that a sufficiently
ambitious international comprehensively binding UN agreement is
needed to reduce greenhouse gas emissions and crucially, also,
that it will be the developed countries that will have to put
in the biggest effort to reduce emissions. There is also a statement
in the Communiqué which I think is very significant, which
is that the overall targets for emission reduction must be guided
primarily by science. Let me explain here that in some of the
discussions around this there are lots of different targets bandied
around, whether it is 60%, 50% or 70%, but within the discussions
we had amongst the Group there was a recognition that the job
to be done is very big and it has to be guided primarily by science
in setting those emission reductions and, of course, when we talk
about whether it is 50% or 60% there is always a little bit of
politics coming in about rounding up to a figure. What we wanted
to do here was really emphasise the key principle of this is that
an agreement has to do the job that the climate scientists say
will be necessary to avoid dangerous climate change. Those are
really the key points in the Bali Communiqué and I have
to say I think we were absolutely overwhelmed with how successful
it was in attracting business support. We really only started
a month or so before Bali but over the course of four or five
weeks we ended up gaining the support of over 170 global companies
in support of this document. That included many from the United
States, a whole surge of companies from Australia in the last
week or so and, indeed, five Chinese companies signed this Communiqué
as well, so we were thrilled with the strong global consensus
that there seemed to be within a large part of the international
business community in support of a strong international framework.
Q38 Chairman: It is clear from all
of that that the business community in many parts of the world
is probably ahead of the politicians and public opinion, and I
very warmly welcome that. Clearly the emphasis you put on the
policy is that it should be based on the scientific evidence,
do you think there is anything like the sense of urgency in the
negotiations now, both at Bali and what is going to happen over
the next 18 months or so, that there needs to be to reflect what
science is now telling us?
Mr Bennett: I will say something
and then I am sure David will want to comment. I think some of
the previous witnesses put this very well in suggesting that around
the negotiations there is an emerging sense of urgency and the
way in which the negotiations went into the night on the last
day and many blocs like the European Union did hold firm indicates
that there is that sense of urgency growing amongst the countries
negotiating this. Of course, crucially we need to see that sense
of urgency really being driven by political leaders. What the
Corporate Leaders Group has time and again emphasised is to call
on that leadership from political leaders to really drive that
sense of ambition to make sure there are the appropriate mechanisms
in place to move the world towards a low carbon economy, and there
is clearly a lot more to be done there yet.
Mr Hone: Let me just reflect a
bit on that. First of all, from a business perspective the Bali
Communiqué puts forward an important point. This issue
can unfold in two different ways. One is that we can build the
structures and frameworks necessary to start making reductions
and business can respond to that, or the second is we can let
this issue just roll on and roll on and at some point in the future
somebody will have to take what will amount to a knee-jerk and
quite severe response to events as they unfold. The former is
in the interests of business to see a framework there, to see
what the rules are and to start operating within those rules and
delivering the products and services necessary for society as
it moves forward. In business where we are making multi-billion
dollar investments, to have the rules suddenly change at some
point 10, 15, 20 years down the future, is not in our interests
at all. That is one of the key reasons that underpins our desire
to see policy move forward and these various frameworks established.
In terms of urgency, the people around the table certainly had
a sense of urgency. I do not think the outcome fully reflects
the urgency of the people participating and I presume that is
down to the negotiating process. Although the Bali Communiqué
sets out a pathway for the next two years, it does not go nearly
far enough in setting out some of the specifics that are required
and setting out timelines within which they have to be delivered.
Those specifics, that tight frame of reference within which the
negotiating process should operate and deliver, were absent from
the final Communiqué.
Q39 Dr Turner: I think this Committee
would totally concur with the sentiments you have expressed in
your Communiqué. The IPCC scenarios, which are themselves
quite cautious, indicate that global emissions have to peak within
the next ten years, that developed country emissions have to reduce
by 25-40% by 2020, and that overall global emissions have to reduce
by at least half by 2050. Does the Corporate Group accept that
emission progress framework?
Mr Bennett: I think the first
thing to say is that in the Bali Communiqué although we
did not want to, if you like, choose a specific target ourselves,
where we have then put that principle that emission reductions
must be guided by science we do note the IPCC's findings there,
so we say: "Even an immediate peak in global emissions would
require a subsequent reduction of at least 50% by 2050 and a later
peaking would require a much greater reduction". In the Communiqué
we have clearly recognised the work that the IPCC have done in
their fourth assessment report and made it clear that we are aware
of that when saying that the overall targets for emission reductions
need to be guided by science.
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