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" "SUSTAINABLE BUSINESS041THE BLUNT ANDLIMITED MARKETSOF THE PAST AREUNLIKELY TO SUSTAIN SIX BILLION PEOPLE,RISING TO NINEBILLION BY 2050SOME LITMUS TESTS FOR CLIMATEAND CANCUN In respect to climate change, all eyes are now on theUN climate convention meeting in Cancun, Mexico.What are some of the elements that can assist inensuring the meeting is a success?The US$30 billion-worth of pledges need to beoperationalised and operationalised fast. UNEP,working with nine leading modeling centres, estimatesthat there remains a gap between the pledges andintentions linked to the Copenhagen Accord and thescience. Emissions in 2020 need to be somewhere just over 40billion tones (Gt) of CO2 equivalent if we are to realiseemission reductions by 2050 that keep a temperaturerise to 2°C or less. So, this gap needs to be bridgedbetween now and Cancun or in Cancun itself. Optionsinclude some countries increasing their pledgesupwards to bringing sectors such as maritime &shipping and aviation into the carbon and emissiontrading markets. IS BUSINESS OUT IN FRONT? Business, either through persuasion at the politicallevel or through actions on the ground - such asgreening their operations and their supply chains - can contribute to such aims and the widersustainability challenge. Indeed, in some ways, business is out in front. It wassuggested that a failure to secure an internationalregime in Copenhagen would be the death knell for the carbon markets. But the latest assessment of the European emissions trading market shows that despite this and in spite of a fall in emissionslinked with the recession, the markets have provedremarkably resilient. This should strengthen the resolve of otherscontemplating such markets with the ultimate aim ofsecuring a higher carbon price. Indeed, a recentassessment of the proposed Kerry-Graham-LiebermanSenate bill in the United States says that if it wereenacted in full, the emissions trading market therecould be worth over US$250 billion. The price ofcarbon could be over US$30 a tonne between 2013and 2020. GREEN GROWTH - IT IS NOT JUSTCLIMATE CHANGE The role of business and the link between morecreative and intelligent markets and the widersustainability agenda is not confined to climatechange. Towards the end of 2010 - the UN'sInternational Year of Biodiversity - a landmark reportby The Economics of Ecosystems and Biodiversity,hosted by UNEP, will be published. Already some of the figures are emerging: aninvestment of US$45 billion could secure a globalnetwork of protected areas, whose services are worthclose to US$5 trillion annually. A return of 100:1.Some companies are making the business case forinvesting in natural resources whether they be inproductive soils or biodiversity. CLIMATE AND NATURAL RESOURCE SCARCITY - THE DEFININGCHALLENGE Business and its experience will be key as to whethergovernments are persuaded to support new kinds ofmarkets, for example in water and nature-basedservices, that bring value to these natural assets inorder to conserve and sustainably manage them.REDD may be the first, but eventually markets or fundscould transform the economics of other terrestrialecosystems via greater incentives for, for example,sustainable agriculture. And what about marine: there is an urgent need to capture the true value of coastal ecosystems interms of their role as nurseries for fish and coastaldefense, but also for carbon storage. The GreenEconomy is emerging, in part driven by the financialand economic crisis. And in part because of a growing realisation that theblunt and limited markets of the past are unlikely tosustain six billion people, rising to nine billion by2050. From its day-to-day operations, to its ecologicalfootprint and across its supply chains, managingenvironmental risks like climate change and thescarcity of natural resources, will increasingly define acompany's business and political life in the 21stcentury. Sustainable development is not a choice, butan imperative and the only course possible in our 21stcentury world. A Green Economy will happen, either by design ordefault. I am sure that any prudent and forward-looking business man or woman, would back a well-thought out, design-led path rather than the alternateone. By its very nature, pressing the default buttonrather than the design route will be disruptive,unpredictable and bad for business. nThis article is excerpted from a speech titled"Opportunities and Uncertainties: Towards GreenEconomic Recovery", delivered by Achim Steiner,UNEP Executive Director, at the Opening of theBusiness 4 the Environment Summit in Seoul, on 22April 2010.

" "f we are to achieve a truly coordinatedaction on reducing greenhouse gasemissions, we must look to innovativeschemes, companies and countries totest the waters, sometimes suffering the setbacks andultimately taking us all forward.The turn of the last year has been a difficult time in thefight against climate change. The outcome of the highprofile UN meeting in Copenhagen in December wasdisappointing. In the months following we thenregressed to dealing with the frustrating and overblownresults of some sloppily expressed emails at theUniversity of East Anglia and a blithe assumption by theIPCC that the Himalayan glaciers would melt by 2035. We always knew that we would not emerge fromCopenhagen with a full signed-and-sealed treaty withfirm commitments for specific emissions reductionsfrom everyone around the world. But I did hope that wemight emerge with rather more than we did, with atleast a set of in-principle commitments and sometarget dates and a map charting where we were goingto go from here. Instead, we have the CopenhagenAccord, drawn up by the United States, China, India,Brazil and South Africa, with some aspirations andagreements, and an earnest of intent to build on thisduring the coming year. And build on it we must.The worst response to Copenhagen would be to throwup our hands in horror and say nothing was achievedand therefore we should give up on the search forinternational commitments and agreement. Althoughthere has been what seems like a set-back recently, Iam still positive. We need to continue the drive for an internationaltreaty. And do so with renewed urgency. There aresome useful fundamentals in the Copenhagen Accord- the aim of a 2°C limit to temperature increase; theprinciple of north-south flows of aid and support inorder to ensure that the developing world can growmore sustainably than those of us who have largelycaused the problem up to now; and commitments tohelp combat deforestation. Should world leaders emerge from the UN ClimateChange Summit in Mexico in December with a signedinternational treaty to reduce greenhouse gasemissions, environmental regulators around the world will have an important role to play in ensuringwe start to implement any agreement with vigour andwith precision.The success of a global treaty hinges on the trust thatwe build and hold in the monitoring and regulation ofwhatever emissions reduction schemes emerge. Thecall to arms for the world's environmental protectionagencies is to ensure that legal requirements of theinternational community to cut their carbon output canbe backed up with an effective regime of regulationthat is measurable, reportable and verifiable.In a time of economic hardship, countries across theglobe will only deliver on their carbon reduction pledgeif they are confident that the system will not be open tomalpractice or poor administration. You only have tolook at the outcomes of weak regulation within thefinancial world to understand the impact it can have.Europe is already ahead of the curve in this regard withthe European Union's Emissions Trading Scheme (EU ETS) having been introduced in 2005. While the scheme suffered some early teething problems due to the price of carbon diving sharply during thefirst three-year phase, the price has now stabilised,Main Picture:Environment Agencychairman Lord SmithDELIVERING ROBUST ANDTRANSPARENT REGULATIONOF CARBON REDUCTIONTHE UNITEDKINGDOMLAUNCHED THEWORLD'S FIRSTDOMESTIC EMISSIONS TRADING SCHEMEIN APRIL THIS YEAR042SUSTAINABLE BUSINESSIRT HON LORD CHRIS SMITH, CHAIRMAN, ENVIRONMENT AGENCY?