Combating and adapting to climate change is one of the most important missions of our generation— and it is one that has a special significance for Asia and the Pacific. The business community must be part of the solution in shaping a greener, low-carbon economy.
Illustration: Jayachandran / Mint
The impact of climate change on Asia and the Pacific is evident. The number of natural disasters striking this region has grown tremendously over the past few decades—from an average of 56 per year in the 1970s to an average of 306 per year in the new millennium. And it is expected to continue to increase dramatically in the years to come. The knock-on effects include longer and more intense droughts that threaten food security; water shortages and more frequent floods that put serious pressure on agriculture; and many of Asia’s major rivers—lifelines for billions of people in the region—could dry up as the Himalayan glaciers melt.
The need to respond is clear, and we have to do so quickly. Indeed, it is a race against time. Although there is still a long way to go towards finding solutions on how Asia and the Pacific can best adapt to climate change, there is also much that is known—and this includes the need for greater involvement of the business sector. The fact is that effective climate change adaptation will only occur if this vital sector of society is actively involved. Indeed, businesses will bear the direct physical impact of natural disasters as well as the broader implications, which may include disease outbreaks, inflation and political turbulence.
It is with this in mind that in excess of 150 business executives and representatives of governments, civil society and international organizations from around the region will gather in Bangkok today for a meeting called “Climate Game Change—innovations and solutions for climate change adaptation”. The forum, a joint effort of the Swedish International Development Cooperation Agency (Sida) and the United Nations Economic and Social Commission for Asia and the Pacific (Escap), will explore new ideas for enhancing collaboration with the business sector in the battle against climate change.
The business sector is in an ideal position to help, with much-needed skills, capital and technology. It is nimble in response to new threats and opportunities, and a key source of creativity and innovation—crucial to developing new and greener technology to help effectively address climate change.
The region’s business leaders clearly are aware of the challenges we face. According to a survey carried out by consultancy McKinsey and Co., 71% of the interviewed Asian executives said climate change issues are of importance in the overall strategies of their companies, compared with only 51% in North America.
It is vital that this awareness is translated into quick action. There is a good business case here—innovation and investment in green technology and industry create new markets and new opportunities for growth. A report commissioned by Sida, which will be launched at today’s forum, stresses the gains to be made when businesses begin cooperating with governments and civil society to promote adaptation.
At the centre of the discussion about climate change adaption lie questions such as why businesses are not doing more in this area. Why is the current business environment not enabling the green growth that the world needs so badly? A green market exists, but it is not growing quickly enough. More needs to be done for this to happen.
First, certain obstacles need to be overcome in order to create a new market. Many current fossil-based and fossil-biased investments are still attractive and are generating profit. This slows the transition towards new, and greener, ventures.
Second, there is a need for new, innovative financing mechanisms to finance climate change adaptation and mitigation. This is because financing for a global changeover is not in place and there is a general lack of trust in the promises of financing from rich countries. For example, very few rich countries fulfil the recommendation and promise to allocate at least 0.7% of their gross domestic product to development cooperation.
Third, all possible steps should be taken to ensure that the present financial situation does not distract from climate change. The global financial crisis has put risk taking in a different light. While risk capital for greening of business is in critical demand, the appetite for taking risks in the financial market has dwindled—thus, when assessing climate-related risk and opportunities, it is important to bear in mind that the past is unlikely to provide a reliable guide to the future.
No lone player can solve the problem. The challenges can only be overcome by cooperation, and the business sector is integral to this cooperation. The strengths and weaknesses of each party need to be taken into account. The Asia-Pacific region’s business sector has the capacity but no formal mandate, and sometimes lacks public confidence. Governments have a formal mandate, but not the capacity of business. Non-governmental organizations enjoy trust, if no formal mandate, and tend to have high levels of expertise but low levels of resources. But by working together, the region will have the mandate, skills and resources to deal with climate change mitigation at a new and more effective level.
Noeleen Heyzer is executive secretary of the UN Escap and Anders Nordström is director general of the Swedish International Development Cooperation Agency. Comments are welcome at firstname.lastname@example.org