The Case for Business

Tomorrow (January 15th) will see the United States Climate Action Partnership (USCAP – a group of businesses and leading environmental organizations  that have come together to call on the federal government to quickly enact strong national legislation to require significant reductions of greenhouse gas emissions – www.us-cap.org) unveil details of the regulatory approach that should be taken in the USA to address climate change. But more about that tomorrow, after the formal announcement.

In advance of their annoucement it is worth thinking about why business even wants such regulation thrust upon it. After all, isn’t the traditional role of business to oppose government regulation? Whilst that has certainly been true in the past and may well continue to be true for certain types of regulation in the future, increasingly it is not the case when it comes to constraining CO2 emissions. This is game changing stuff and business has realised that in completely redesigning the rules of the game, it is better to be part of the design team than just the player at the end.

This is not to say that this makes it easy for the players, far from it. Rather, with business at the table, government can at least design a game (or in this case a regulatory environment) that can be played. Business has realised that the risk behind such pervasive legislation as will be required to reduce CO2 and other greenhouse gas emissions is that the business environment itself may become unworkable. It has also realised that if far reaching effective legislation is enacted now that puts us on a 40 year journey towards near zero emissions (an 80% reduction is effectively near zero and in any case by 2060+ it really will have to be zero), that is much better than the chaos that will ensue when government tries to grapple with really rapid reductions in say 2020 or 2030, having done little about it now.

Nobody really wants all this and there is no doubt that this is, to steal a phrase, a really incovenient issue. But it is the reality of the world we live in and what we are doing to it. There is a strong case for business to be involved in redesigning the environment in which it operates, principally so it can continue to deliver benefit to its shareholders and provide the goods and services that society depends on. Today, there is still the opportunity to do this in a thought through and constructive manner with government, business and civil society all at the table.