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Last Updated: Friday, 26 January 2007, 13:01 GMT
Has Big Business gone green at last?
By Tim Weber
Business editor, BBC News website, Davos

Claudia Schiffer in Davos
Claudia Schiffer is promoting model behaviour on the enviroment
Big business says it has got the message and will help the world fight climate change.

Sounds good, but is it for real?

Davos already had a green tinge in the past few years, with earnest discussions of environmental issues and polite requests that participants should make up for the carbon emissions of their journey to come here.

In the past this was mainly veneer. This year it feels different.

I don't mean the fridges in the press centre that carry the Greenpeace seal of approval.

But when hundreds of participants voted on what the world's most pressing issues were, a large majority said "climate change", and also found that the world was not ready to tackle it.

Newfound enthusiasm

It's difficult to say what caused the change.

German supermodel Claudia Schiffer says that seeing Al Gore's film on climate change An Inconvenient Truth made her support the LOVE campaign, which hopes to do for climate change what Bono's Join Red initiative does for Aids in Africa.

Markets can't save the planet and governments definitely can't save it either
Utz Claassen
Energy Baden-Wuerttemberg

As it happens, there are plenty of chief executives who also point to the former vice president's film as a turning point.

Others are more sober, with German Chancellor Angela Merkel highlighting in her speech the Stern report on the economic impact of climate change, which was commissioned by the UK government.

"It's fascinating how green issues such as climate change have gone mainstream in the past six month," says Richard Punt, a managing partner at consulting firm Deloitte.

A fridge at Davos 2007
The real thing? Is business serious about climate change?

But he also has a word of caution: "I don't know whether the discussion here in Davos is actually moving forward or whether it is stagnating."

Regardless, "there is a spirit of enthusiasm across the business community, a sea change on green issues," says Daniel Esty, director of the Yale Center for Environmental Law and Policy.

But enthusiasm alone does not solve the problem, and the bosses know it.

"It is probably too late to counter climate change," say a number of corporate leaders.

With climate change inevitable, we have three options, they say: mitigate, adapt, or suffer.

When an environmental expert argues that we will have to face up to all three options, but that it is up to us to determine the mix, many heads in the room nod in agreement.

Searching for solutions

The World Economic Forum has always been about free market economics.

But most power brokers seem to agree with Dan Esty, who says that "we have environment as a market failure".

Utz Claassen runs German power company Energy Baden-Wuerttemberg. He is passionate about climate change.

"Can markets save the planet? No!," he says. "Can governments save it? Definitely not!"

Only if governments put regulations and clear targets in place, but leave it to the markets to set prices and allocate resources, can the world tackle climate change.

A sign at Davos 2007
The Davos talks have lofty ambitions

And what if we fail? Mr Claassen is dead serious: "Climate change will kill us all."

Even politicians agree. UK environment minister David Miliband calls global warming a market failure and a "political failure".

Industry, he says, needs clear signals from government, for example a reassurance that there must and will be a carbon market in place once the current arrangements run out in 2012.

And he tries to talk himself out of a job. This problem can not be solved by environment ministers, he says, it has to be done at the level of prime ministers and finance ministers.

Elephants in the room

Better regulation, better markets, and better technology - all have to combine to ensure that resources are used and deployed correctly, says Mr Esty.

There is a reason, he says, why General Electric is betting the company on the assumption that environmental opportunities will create a billion dollar market.

But there is not much time, warns Frances Beinecke, president of the Natural Resources Defense Council in the US.

Will we put markets in place "in time to ensure the integrity of the planet"? she asks, pointing to the world's surging output of carbon, with a new coal-fired plant coming on to the grid every three days.

And then there are the two big elephants in the room, India and China.

They have no emission caps, and especially US politicians argue that they can't sell a climate deal to their voters if it does not include clear environmental targets for these two rapidly developing nations.

But even if they come on board, it may not be enough.

We have to solve poverty first, warns a social entrepreneur from Brazil, because if we don't get the buy-in of the billion people who live in poverty, the fight against climate change will never be a success.


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