Businesses to unite on green agenda including carbon taxes

Global businesses are set to reach an agreement to work together to support a higher carbon price, more green technology in cities and greater renewable energy use ahead of the global climate pact to be signed in Paris this year.

Jean-Pascal Tricoire, chief executive of Schneider Electric who is playing a leading role in the Business & Climate Summit in May, told the Financial Times that the meeting of business leaders will put pressure on world governments to act.

The summit of 1,200 senior figures, which is supported by both the UN and business networks such as the International Chamber of Commerce, comes ahead of the COP 21 meeting in Paris in December. There, governments will attempt to finally reach a meaningful agreement on reducing carbon emissions after 20 years of negotiations.

The most recent significant effort to seal an international climate deal in 2009 in Copenhagen failed after world leaders were unable to agree how to share the burden of cutting emissions. But Mr Tricoire said a lot had changed since then.

"The difference between now and three years ago is that nobody in business really dares to say climate change is not happening," said Mr Tricoire. "Even the oil producers and the energy-intensive companies - everyone agrees there is a massive problem."

Delegates for the business conference include Tony Hayward, chairman Glencore-Xstrata, and Paul Polman, chief executive of Unilever.

They plan to produce a paper of recommendations after the conference.

Mr Tricoire said a key recommendation from business leaders to governments should be to put a meaningful price on carbon, such as a carbon tax or a cap and trade plan.

"The price needs to be high enough to make a difference and not volatile, so companies can factor the price into their long-term planning," he said, adding the new markets will probably be regional rather than global.

"Before it has been difficult for policy makers to take a position because of industrialists saying no to a carbon price because it will price us out the market . . . today I expect a commitment of a majority for carbon pricing."

He said that another key recommendation will be about using more sophisticated green technology in urban building and transport. "Smart technology is there to build greener buildings, government just need to use it," he said.

The third goal will be to put pressure on governments to use more renewables in their energy mix.

"I don't see a lot of conflict on these three major issues," he said, adding that there will clearly be factions and difference of opinions over some of the details.

He also said that in a personal capacity, he felt that business leaders should urge government to use the period of low oil prices to end fuel subsidies, although he was not clear if this would be a recommendation.

"This is a golden opportunity," he said.

The G20 pledged to phase out inefficient fossil fuel subsidies in 2009 and several bodies have issued reports showing the benefits of cutting such support. The incentives are estimated to have cost $548bn in 2013.

Some countries, including Egypt and Indonesia, have started to rein in subsidies over the past 10 months but they remain widespread elsewhere.

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