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Business at Davos sees greenbacks in climate change
By Peter Capella
AFP
DAVOS, Switzerland
Petroleumworld.com 01 29 06When US Republican Senator Saxby Chambliss mentioned his doubts about climate change during a debate at the World Economic Forum last Friday, gasps emerged from the business-minded audience.
"Whether it's something that we need to be totally alarmed about, or nature taking its course, I don't know," said the sceptical senator from Georgia.
The shocked reaction reflected growing concern about global warming at the meeting of corporate and political leaders in Davos that ended on Sunday.
Executives revealed that their greening was fuelled by a combination of personal conscience, fears about the economic impact, and business acumen helped on by a growing dose of regulation.
"The alternative energy world is no longer the domain of some Birkenstock wearing wind power types out on some Oregon farm," said Dan Esty, director of the Yale Center for Environmental Law and Policy.
"We now have some of the mightiest companies in the world."
Chambliss's comments in one of a host of debates on the topic at the Swiss resort came just days before the UN's scientific authority on climate change issues its first update in six years.
The report by the Intergovernmental Panel on Climate Change on February 2 is expected to reaffirm scientific evidence on the causes and impact of global warming.
Oil and coal are two of the fossil fuels producing harmful greenhouse gases that have accumulated in the atmosphere, upsetting the world's weather, according to scientists.
In the 1980s and 1990s, big oil and large swathes of industry reviled talk of pollution caps.
They lobbied fiercely against the UN climate change treaty, and the subsequent compulsory Kyoto Protocol limits on greenhouse gas emissions that were shunned by the United States.
Iain Conn, managing director of one of the world's largest oil companies, BP, said the group now recognised the "urgency" of the need to stabilise emissions.
"The reality is that I've learned a lot over the past year," he explained in the debate. "Most people now understand that you have to take action in the next 10 years," he added.
Conn said markets for carbon dioxide, which allow companies to buy emissions allowances from others that pollute less under Kyoto's 'cap-and-trade' rules, had provided a business incentive.
The company also discovered that some 200 million dollars spending on energy efficiency could yield savings worth 10 times as much.
BP, which made a net profit of 22.34 billion dollars (18.64 billion euros) in 2005, is planning an 8.0 billion dollar investment over the next decade in clean technologies.
One opinion poll commissioned by the Forum indicated that a combination of business and political leaders in Davos rated environmental protection as the second most important priority after economic growth.
On January 22, some of the largest US corporations, including aluminium giant Alcoa, General Electric and chemicals firm DuPont, urged US President George W. Bush and the Congress to act swiftly to tackle global warming.
"There are some companies that are talking and there are some companies that are acting," Esty said.
"What we're seeing though, and what we're seeing in Davos, is quite a revolution in how we do environmental protection."
Some big firms, however, appeared reluctant to join the ranks of the converted.
Rex Tillerson, chairman and chief executive of oil giant ExxonMobil would only acknowledge that "something is going on" with the climate. He highlighted energy efficiency and greener technology, while avoiding mention of compulsory limits.
BP's Conn explained: "I think there is a range of views in our industry. The reality is some are taking longer to come to the table than others, but everyone is moving."
Klaus Kleinfeld, chief executive of German electronics group Siemens said he was swayed by a combination of personal and consumer pressures.
"I have to admit that Al Gore was the tipping point," Kleinfeld said, referring to the former US presidential candidates' blockbuster disaster documentary "An Inconvenient Truth" about global warming.
"I think it's become evident, we've got to act now," he added.
Siemens has also discovered the business merits.
"We are in a very luxurious position here. When you talk about energy efficiency a lot of things we produce are exactly in that area," Kleinfeld said.
Siemens spent 5.7 billion euros (7.4 billion dollars) last year in overall research and development, partly for environmentally-friendly technologies.
"If I look where we invested that I would say that minimum 50 to 60 percent falls into that category," Kleinfeld said.
US venture capitalist John Doerr highlighted the money-spinning opportunity of hi-tech green innovations such as wind, solar power, or clean burning power plants and vehicles propelled by new zero emission fuels.
"Energy is a trillion dollar market in the US, two trillion worldwide. It's the mother of all markets and I dare say this is the largest economic opportunity this century."
AFP 28 0405 GMT 01 07
Copyright© 1999 AFP. All Rights Reserved.
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