Business Perspectives on the Short and Long-Term Goal of

Reducing Greenhouse Gas Emissions

International Climate Change Partnership

Frame the Framework Convention

• Assumes: Concentration

• Assumes: “Rate of Change”

• Assumes: Need for Adaptation

Short-Term Objective

• Importance of First Step

• Recognize Marginal Value of Reductions

• Provide Flexibility to Assure Cost-Effectiveness

• Provide Assurance of Inclusiveness of Process - Industry-Wide

- Developed and Developing Country

- Capture Evolutionary Technological Change

Long-Term Objective

• Frame the Framework Convention

• Goal is Concentration (Range)

• Identify Range - Rate

- Adaptation

• Stimulate R & D for Revolutionary Technological Shift

Policy Goal

• Signal Long-Term Nature of Effect

• Provide Means for Assuring Progress

• Clearly Define Environmental Objective

• Integrate Scientific Understanding With Economic Objectives

• Better Define Need for Total Involvement

Infrastructure Investments

• Prevent Short-Term Capital Stock Loss

• Most Significant to Occur in Developing Countries

• Recognize Shifting Investment Timetables

Historical Example

• Montreal Protocol- Adopted in 1987

- Ozone Hole 1988

- Scientific and Policy Consensus 1989

- Informal Adoption of Goal of 2 ppm Chlorine as Basis for Future Amendments 1990 - Present

Process to Begin Identifying Objective

• Assess Population Growth

• Rates of Sustainable Economic Development

• Impacts of Changes in Energy Market

• Utilize Third Assessment Report Process

There Is No Right Answer,

It is a Policy Choice

Kyoto Protocol

• Target and Timetable Strict

• Flexible Mechanisms - Critical

• Developing Country Participation - Essential

• Steps Beyond - Undefined

Decisions for COP 5 and COP 6

• Build on Flexible Mechanisms

• Develop Consensus on Meaningful Next Steps

• Achieve Broader Participation