Saturday, February 23, 2008

Investors Tackling Global Warming While Governments Spar

Investors Tackling Global Warming While Governments Spar

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Monte Carlo, Monaco - Private companies will soon be investing more than governments in cutting the production of greenhouse gases, the U.N.'s top climate change official said Thursday.

Yvo de Boer said business efforts were good but also not enough - and that only a binding international agreement on cutting carbon emissions will make private sector efforts financially viable.

"Business is really beginning to take climate change into account," de Boer, executive secretary of the U.N. Framework Convention for Climate Change, told The Associated Press. "There's a momentum building in the finance community."

He was speaking on the sidelines of a U.N. Environment Program forum in Monaco, the biggest meeting of environment ministers since international talks in Bali, Indonesia, in December produced agreement to adopt a plan by 2009 on collective worldwide efforts to reduce global warming.

French nuclear manufacturing giant Areva announced Thursday that it went "carbon neutral" in 2007, joining the list of companies that say they have or plan to do so. An increasing number of multinational corporations are reporting their carbon footprint in their annual reports - and seeking to reduce it to please shareholders.

Going "carbon neutral" generally means taking steps to compensate for the greenhouse gases that companies or individuals emit in doing business or in their daily lives. Such measures can involve funding projects that aim to reduce emissions elsewhere in the world of the gases blamed for climate warming, for example by giving money to plant trees, build hydroelectric dams, or provide cooking stoves that use less fuel.

Towns and even countries are also trying to compensate for their emissions. Costa Rica says it wants to be carbon neutral by 2020, and China's sustainable cities program is aiming to do something similar on a municipal level.

De Boer predicted that private investment would soon outpace government investment in combating global warming. Already, he noted that the world's carbon markets generated US$60 billion (€40 billion) last year, compared to about US$80 billion (€55 billion) in official development aid for climate change.

Most of that private investment is going into carbon emissions trading deals. Rich nations that signed on to the 1997 Kyoto Protocol were given a limit for permitted carbon emissions. Companies in these countries can earn credit toward their quotas by paying to clean up the environment in poorer nations.

It took several years for the emissions trading scheme to catch on on a large scale, amid skepticism about global warming and fears that "green" investments weren't profitable.

But de Boer said companies are increasingly signing on as consensus has grown about the causes and dangers of global warming and as they brace for tougher government emissions rules expected post-2012.

Some of the private investment is in renewable energies such as wind and solar power - and nuclear energy, which has many activists wary.

The Bali talks were aimed at launching negotiations to replace the relatively modest emissions cuts laid out in the Kyoto Protocol, which expires in 2012. The final agreement from Bali has no specific emissions reductions targets, at the U.S. delegation's insistence.

Many countries are looking to the next U.S. president to mobilize American government efforts against climate change after years of resistance by U.S. President George W. Bush.

De Boer noted that leading presidential candidates John McCain, Barack Obama and Hillary Rodham Clinton all support government limits on emissions.

The challenge, he said, will be coming up with an international plan that will pass the U.S. Senate, where many are reluctant to endorse anything that does not require developing nations such as China to cut emissions, too.

The current U.S. administration's position caused tensions at the Monaco conference. The U.S. delegation insisted that the conclusions reached this week be merely "welcomed" instead of formally "adopted" - a position ridiculed by several European and African ministers present.

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