From Mars to Ikea, Concerns Emerge About Vague Climate Rules

(Bloomberg) -- Business leaders at a round of United Nations talks on limiting climate change warned that the rules envoys are drawing up are may be too vague to change the way they work.

From the Swedish furniture supplier Ikea to candy maker Mars Inc. and telephone network operator BT Group Plc, companies are looking for a guide on where government policies on the environment are headed. Delegates from almost 200 nations have been working for almost two weeks in Poland to write the rules accompanying the landmark Paris Agreement.

Yet delegates and observers to the discussions say what’s emerging from the meeting in Katowice is likely to fall short on specifics such as when more of the $100 billion a year in promised climate aide will flow and how a global carbon market might be revived. With U.S. President Donald Trump and the government in China pushing priorities other than the environment, companies along with pressure groups are voicing unease about the direction of the UN talks and the deal they are due to produce this weekend.

“What we have been trying to push here is the urgency,” Andreas Ahrens, head of climate at Ikea, said in an interview in Katowice. “We just need to go to work. We do need the rulebook.”

From Mars to Ikea, Concerns Emerge About Vague Climate Rules

Three years ago with the support of then-President Barack Obama, these talks produced the first-ever pledge from all nations rich and poor alike to rein in fossil-fuel emissions. Diplomats left the details of how that pact would be implemented to a later meeting and hope to produce what’s known as the Katowice Rulebook this week.

“Weak rules create uncertainty,” said Jake Schmidt, who watches the talks for the Natural Resources Defense Council, a U.S. advocacy group. “If we have countries showing that they are delivering on their targets but the atmosphere sees rising emissions, then we will know that our weak rules led to runaway climate change.”

There’s a number of sticking points:

  • On carbon markets, envoys deliberated how a specific project can qualify as one that has cut emissions, how to avoid double-counting those cuts and what baseline is acceptable to use as a comparison.
  • Debate over a new UN Sustainable Development Mechanism was holding up the promise of expanding the world's network of cap-and-trade markets covering carbon emissions.
  • Developing nations are seeking more certainty on when richer nations will meet their pledge to channel $100 billion a year in climate-related aid. An official report showed those funds are at least $30 billion short at the moment.
From Mars to Ikea, Concerns Emerge About Vague Climate Rules

Envoys and environmental groups joined business in expressing frustration that the process wasn’t moving faster, saying the lack of specifics at the meeting dubbed COP24 would hold up investment.

“If COP24 does not agree a pathway to empower business, then the world risks seeing its climate goals slip out of reach, with catastrophic consequences for people and the planet,” said Edson Duarte, the environment minister for Brazil.

UN Secretary General Antonio Guterres returned to the meeting on Wednesday urging delegates to compromises, saying “the window of opportunity is closing.” Polish officials helping coordinate the discussion acknowledged they’re behind schedule and on Wednesday proposed a series of texts to break the deadlock.

“I can see that current approach to negotiations is exhausted,” said Michal Kurtyka, the Polish envoy running the negotiations, said on Tuesday. The discussions are due to conclude on Friday night.

Many businesses are waiting for specifics about how government regulations on pollution will change before they make emission cuts a bigger priority.

“We need the government gentleman to stop worrying about the rule book and start worrying about enabling action, and that will only happen if they get the rulebook out of the way,” said Anirban Ghosh, the chief sustainability officer at Mahindra & Mahindra Ltd., which runs $21 billion of businesses ranging from vehicles to telecommunications and holiday resorts in India. “If they don’t get it out of the way, that’s all they will talk about and that’s all they will think about.”

In Germany, for example, the Chancellor Angela Merkel’s government is drawing up proposals on how quickly it should phase out coal and nuclear plants. Power generators led by RWE AG and Uniper SE are continuing to operate their facilities until the rules change.

``It is important for business to have support for ambitious climate goals from policymaker,’’ said Gabrielle Giner, head of environmental sustainability at BT Group Plc. ``It drives faster action across the entire business community and that reinforces our own efforts, allowing us to make further and faster progress.’’

In the U.S., many companies are pressing ahead with paring back their own emissions even as the Trump administration seeks to encourage use of coal.

“Clear rules provide the clarity, motivation and confidence companies need to ramp up climate action,” said Ashley Allen, an official at the candy maker Mars Inc. working on climate issues. “The stronger and more comprehensive the guidance, the clearer the runway is to ambitious climate action at scale.”

©2018 Bloomberg L.P.