The private sector must be involved in tackling climate change

Helen Clark: The private sector must be involved in tackling climate change

07 December 2011

Remarks by Helen Clark, UNDP Administrator, on the occasion of the Durban Climate Change Conference, High-level Panel Discussion: Challenges and Opportunities for Businesses in Africa

7 December 2011, 13.00-16.00

It is a pleasure to be here with Your Excellencies’s Prime Minister Meles Zenawi, Deputy President Kgalema Motlanthe, Mr. Jean Ping and Mr. Donald Kaberuka – who have helped lead the sustainability agenda in the continent.

Their efforts within and outside of Africa have helped to increase awareness of implications of climate change for Africa. And how imperative it is for African countries to both adapt to the inevitable effects of climate change, as well as to pursue developmental paths that are consistent with climate change mitigation.

The role of governments is critical in enabling countries to meet the climate change challenges. Only governments can set the policy frameworks and enforce the relevant laws and regulations. But governments cannot produce the needed results alone. Win-win outcomes need to provide gains for local communities and for development, and the private sector needs to be actively involved.

This event is a clear acknowledgement of the importance of involving the private sector.

There are at least three reasons for why the private sector needs to be actively engaged in pursuing solutions to addressing climate change.
First, businesses will have little prospects in a planet on an unsustainable path. Business as usual will lead us in that direction, and not matter how large the short-term gains may appear, the price to be paid will be dire. Already, there is some evidence that pressures in our use of resources are contributing to, for example, commodity price volatility. This increases the cost of doing business for everybody.

Second, businesses gain when they add to the profit motive a concern with the communities in which they operate. While this concern varies across sectors and, within sectors, across firms, there is growing awareness globally about the costs of environmentally unsound practices. And this may even affect businesses bottom line.

Finally, and this is the reason I want to spend some time on, there are new business opportunities in pursuing an agenda that is consistent with climate change mitigation.

Take the case of forests. For a long time, businesses and countries saw in forests natural resources to be extracted. Today, through efforts like UN-REDD, the reverse is taking place. The economic value of preserving forests, including especially its contribution to climate change mitigation, is being recognized. And thus, there are business opportunities in undertaking those activities that preserve, as oppose to “extracting,” from forests.

This event has provided opportunity for the business community to come to know of the challenges of climate change in Africa, but also how addressing climate change can generate economic opportunity.

African governments and business community need to collaborate for maximum impact to be achieved. Effective partnership with the private sector is needed to overcome present barriers that restrict capital flows into the sectors that support climate change mitigation and adaptation. As currently being proposed in some African countries such as South Africa and Ethiopia, public and private sector institutions should work out policy and institutional structures that will promote efficient mobilization and utilization of private resources for climate change adaptation and mitigation.

For instance, South Africa has established its Long Term Mitigating Scenarios (LTMS) plan and announced that it is prepared to cut emission growth to 34 per cent below current expected levels by 2020 and 42 per cent by 2025.  As part of implementing this plan, the country is using Renewable Energy Feed in Tariffs (REFITS) to encourage private sector support renewable energy of producing 4 per cent of the country’s electricity supply (about 10,000 GWh) from renewable energy sources by 2013.

The African Development Bank has also launched its “Clean Energy Bonds” which is targeting investors that are interested in supporting clean energy solutions in Africa.  These are innovative strategies that we all need to encourage, support and promote.

At the United Nations Development Programme, we stand in solidarity with the world’s one billion people living in extreme poverty, who rely on the national environment in which they live for their livelihoods and primary assets. Preserving ecosystems is critical for their daily survival.

As I have always emphasized, business as usual, which leads to broken ecosystems and a warming climate, contributes to increasing economic volatility, and to higher costs and lower profitability of doing business is harmful to both business and the poor. I believe there will be significant business and livelihood opportunities and a better future for us all, if we collectively commit to a sustainable development course.