Monday, 5 January 2009

Book Review: Corporate Responses to Climate Change

Corporate Responses to Climate Change: Achieving Emissions Reductions Through Regulation, Self-Regulation and Economic Incentives

edited by Rory Sullivan, Greenleaf Publishing
November 2008, 356 + vii pp 234
hardback ISBN 978-1-906093-08-2

In 1966, at the height of the Vietnam War, the North Vietnamese presented a captured US pilot, Jeremiah Denton, on television. During the interview Denton blinked his eyes in morse code to spell out the word "T-O-R-T-U-R-E," communicating that his captors were torturing him and his fellow POWs. I was reminded of this incident when reading this admirable and highly informative collection of essays.

Throughout, there is a sense that the authors are constrained- knowingly or unknowingly- by a set of beliefs about the world, how economies work and politics as the art of the possible. But they are also desperate to get a message out about the dire predicament they- and every living thing on the planet- face. Time after time, chapters, whether about “European airline responses to climate change turbulence” or “the role of voluntary industry-government partnerships in reducing greenhouse gas emissions” will list the real and hoped-for benefits from this or that agreement or strategy with the stark truth that:

all these initiatives need to be judged on a single test: what is their contribution to reducing global GHG emissions? If their effect is not to enable, facilitate or deliver significant emissions reductions, companies need to rethink their strategies. We have moved beyond a point where good-news stories, 'greenwashing or green branding are appropriate responses to the threat of climate change.”
(Page 319)

Rory Sullivan, Head of Responsible Investment at Insight Investment, part of the HBOS group, has brought together a broad range of articles, alongside several he has co-authored previously. He writes

The overall aim of this book is to reflect on current business practice and performance on climate change in the light of the dramatic changes in the regulatory and policy environment over the last five years. More specifically, it examines how climate change-related policy development and implementation have influenced corporate performance, with the objective of using this information to consider how the next stage of climate change policy (regulation, incentives, voluntary initiatives) may be designed and implemented in a manner that is effective (i.e. Delivers the real and substantial reductions in greenhouse gas emissions that will be required in a timely manner) while also addressing the inevitable dilemmas at the heart of climate change policy (e..g. How are concerns such as energy security to be squared with the need for drastic reductions in greenhouse gas emissions? Can economic growth be reconciled with greenhouse gas emissions? Can emissions reductions be delivered in an economically efficient manner?)”

The book has a total of 22 chapters under sections including “public policy: regulation ,economic incentives and voluntary programmes,” “non-state actors and their influence on corporate climate change performance” and “corporate responses and case studies.”

None of the chapters is particularly weak, and some are simply excellent. The table on page 120, “Factors that influence business responses to climate change”, which is part of a chapter on the Mexican Greenhouse Gas Program is worth particularly close attention.

The discussion of the motivations for corporations to engage in voluntary partnerships is most enlightening, and gives enough information to confirm any environmentalist's suspicions of corporations pursuing“regulatory capture” of the State.

Curiously though, there are major gaps in this book. There's little on the dilemmas facing the fossil fuel extractors, or on energy companies generally. Vattenfall, a Swedish company trying to influence European- and Global- climate change policy towards steeper targets than presently contemplated, is conspicuous by its absence. Similarly, renewable energy companies don't get a look in. It could be argued that energy policy is a separate (but related) issue that already gets a lot of coverage, but the silence is audible.

More conspicuously absent is the perspective of insurance companies- suffering spiralling climate-related losses, and re-insurers such as MunichRe. Many of these were amongst the first corporates to seriously consider the impacts of dangerous climate change.

The technical nitty-gritty issues around carbon budgets (standardisation and emissions accounting) are referred to, but not explored in depth, and although the infamous Global Climate Coalition gets some mention, the history of corporate responses to climate change is not explored. Developing world experiences, understandably for a book on climate change mitigation, are not explored in great depth.

This is not a book for casual readers. It is not a work of popular science or popular economics. It is not deliberately dense, just written with a specific audience in mind. That said, anyone who wants a serious understanding of the factors that affect corporate responses to climate change, needs to read this volume, which has justly been praised by the great and the good of the world's climateriat.

Sullivan closes on a suitably serious tone-

ensuring that all sectors of the economy and all countries of the world significantly reduce their greenhouse gas emissions as a matter of urgency is the single most important issue for policy-makers, for companies and for us as individuals. That is a stark and maybe unpalatable conclusion. But the bottom line is that the future of our planet, not just our economy, depends on our success in delivering significant reductions in global greenhouse gas emissions.”

The question is, perhaps, how far the measures discussed in this book will genuinely contribute to this effort.

Disclaimer- The reviewer knows and likes the editor of this book, Rory Sullivan

See Also

The Business of Global Environmental Governance eds David Levy and Peter Newell 2005, MIT Press

Conceptualising climate change governance beyond the international regime: a review of four theoretical approaches Chukwumerije Okereke and Harriet Bulkeley Tyndall Working Paper 112

No comments: