WEF: CEOs Must be More Aggressive in Tackling Climate Change and Backing a Carbon Tax

Davos, Switzerland The 2019 annual World Economic Forum wrapped up on January 25th, closing out a week of talks dominated by climate change and fears over slow economic growth.

The world is “losing the race” on climate change, United Nations Secretary General Antonio Guterres candidly told business and political leaders at the first major international gathering of the year.

Demanding bolder action from governments, Guterres renewed the call for more resources to be deployed for climate change mitigation and adaptation, along with increased financial aid for poorer countries.

“Climate change is the defining issue of our time,” he stressed. “It is absolutely central to reverse this trend”.

A World Economic Forum survey conducted ahead of the meeting found that climate change was the leading concern of international participants to the conference.

Former US Secretary of State John Kerry, who signed the Paris Accord to combat climate change for the US in 2016, said 38 out of the 50 states are implementing their own climate policies despite Trump’s withdrawal and scepticism on climate change.

But Kerry noted that the Paris agreement was based on the expectation that the private sector will ramp up investments in green technologies like energy efficient batteries and solar power.

“It’s not happening enough, and even in Katowice recently, you saw the fight that was taking place, just to be able to try to be reasonable here,” he said, referring to the contentious COP24 UN climate change discussions in December 2018.

Ahead of the Katowice conference, a group of 50 global CEOs, responsible for generating more than $1.3 trillion in revenue across more than 150 countries and territories, published an open letter on climate action.

Cutting their collective emissions by 9% so far since 2016, the companies developed “climate governance” principles to help corporate boards manage climate change by translating climate risks into business processes.

Their practical actions highlight that while global commitments and campaigns often make headlines, the commitments need to be translated into business-led climate initiatives and measures to transform industries and operating models.

But while corporate executives, including Patrick Pouyanne CEO of French oil and energy giant Total, publicised their own measures to transition to a greener economy, activists say that companies are still not doing enough.

A carbon tax movement is making headway, under an initiative by the Climate Leadership Council that is backed by 27 Nobel economic laureates and all four former chairs of the US Federal Reserve – Janet Yellen, Ben Bernanke, Alan Greenspan and Paul Volcker.

Ted Halstead, president of the Council, was in Davos this week to promote the scheme.

Recognising that “global climate change is a serious problem calling for immediate national action”, signatories said in a statement that a carbon tax “offers the most cost-effective solution to reduce carbon emissions at the scale and speed that is necessary”.

The tax would factor in the polluting price of fossil fuels so as to discourage their use over time – starting with US $40 per ton of carbon emissions on US businesses, which would produce about US $200 billion in revenue per year.

Revenues would be returned to US citizens through equal lump-sum rebates – echoing Canadian Prime Minister Trudeau’s carbon “dividend”, which was passed in October 2018. A similar proposal for a carbon tax was recently introduced by US bipartisan lawmakers.

Børge Brende, President of the World Economic Forum, wrapped up the conference in Davos calling for “unique partnerships between governments, business and civil society to solve the most pressing global challenges”.

The next major global assembly on climate change, the UN Secretary-General’s Climate Summit will be held in September this year.

References:

AFP- JIJI. “UN Chief Antonio Guterres tells Davos gathering: ‘We are losing race’ on climate change”. The Japan Times. January 2019.

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