Ross Kerber, Simon Jessop

BOSTON/LONDON – Business leaders around the world want the United Nations to fix issues that are preventing carbon pricing from being used to reduce global emissions. The summit will also help to improve the part of businesses in slowing down global warming.

Trade groups, executives and policy experts are expressing hope for a better deal after Madrid’s 2019 summit failed to resolve the issue of international carbon trading. This was according to Article 6 of Paris’ climate agreement.

The lack of an international agreement has hampered the creation of systems to price carbon. Rich Lesser of Boston Consulting Group, the global chair, stated that companies in many sectors want to reduce greenhouse gases.

According to Lesser, executives would have an economic rationale to seek solutions and other options if there was a global carbon price.

Dan Byers will be representing the U.S. Chamber of Commerce, a major trade organization, at the summit. He called Article 6’s final resolution “long overdue”. This is to address technical issues like how countries can verify and monitor carbon emissions.

He stated that one factor favorable to a deal was the climate focus of U.S. Vice President Joe Biden who has returned to 2015 Paris climate agreements after Donald Trump’s withdrawal.

Byers stated that “having the Biden administration supporting Paris and at the table is enormously important in the long-term.”

Business leaders will also be focusing on other issues at the Oct. 31 meeting, including what pledges new national leaders may make to reduce emissions and how much money they will set aside for sustainable development in emerging market markets.

The range of carbon pricing options available can be varied, including carbon taxes which are charged to companies for their emissions or emission trading markets which limit the amount companies and countries can emit while allowing them to trade permits to go above those limits.

According to Kelley Kizzier (Vice-President, Environmental Defense Fund), many corporations believe carbon pricing plans can help them meet the “Net Zero” pledges. She is also a Washington-based advocacy group and was once co-chair of Article 6 negotiations at past climate summits.

She said that Article 6 will need to be resolved in Glasgow. These issues include how to stop two countries from counting the same amount of emissions and what new carbon markets could help develop countries adapt to climate change. She said that even if an agreement is made, the companies must still reduce their carbon emissions.

Kizzier explained that just because you have a goal, it doesn’t mean there are rainbows or butterflies.

DIVISIONS RETURN

Leaders are less divided than ever about carbon pricing.

An example of this is an investor group that includes PIMCO. State Street Amundi and Corp (NYSE 🙂 have called for countries to raise their emissions reduction commitments, end fossil subsidies and made separate requests to international banks that they stop financing fossil fuel projects.

Energy executives believe fossil fuels are still important to the energy transition. Aaron Padilla is a policy director at the American Petroleum Institute. His members include ExxonMobil Corp (NYSE:) Corp and Royal Dutch Shell.

Padilla stated that there is still substantial demand for natural gas, especially to replace coal as a source.

The pressures facing financial companies are their own. According to the Glasgow Financial Alliance for Net Zero (companies with assets totaling $90 trillion), they have called for government to establish broad net zero targets and price carbon emissions.

The group also includes banks that support fossil fuel projects. This has led to criticism from U.N. special representative Mark Carney and others that the alliance chair is not doing enough to push for more action. Richard Brooks, climate finance director for the activist group Stand.earth https://www.stand.earth, said more should follow the example of France’s Banque Postale, which said it would stop serving the oil and gas sectors outright by 2030.

Brooks stated that many banks are being praised and given green covers, but they are not changing their financial practices.

Carney responded to questions about criticism by stating in an email statement that members banks should set interim targets for 2030 and plans for decarbonization. “GFANZ launched an ambitious body to accelerate implementation, and will be outlined in COP26,” he stated.