After Copenhagen: the European business perspective

European businesses were disappointed with the climate change agreement hammered out in Copenhagen. Here’s one way forward.

BUSINESSEUROPE was disappointed by the limited outcome of the Copenhagen conference on climate change. The national commitments likely to be attached to it by the end of January look insufficient to tackle climate challenge globally. European companies will have to face competitive distortions at the international level for a long time to come. While we are committed to developing new, low-carbon technologies and processes, it will be much harder to carry out the necessary investments without the certainty that clear, ambitious and equivalent greenhouse gas-reduction targets provide.

There are positive elements in the Copenhagen Accord. For example, the agreement creates key mechanisms on climate change adaptation, deforestation and technology transfer. The “Copenhagen Green Climate Fund” will manage a considerable amount of money, according to the general commitments made by the signatories, and the concrete pledges for 2010 to 2012 made by the US, Japan and the EU. But the institutional and political modalities of this fund are not clear at all. All the new mechanisms now have to be quickly given substance if we want to make real progress towards a truly global agreement. The EU’s conditional commitment to move from 20% to 30% emission reductions did not trigger meaningful further commitments from other countries. They were focusing their negotiations on the framework for a future international climate regime, while the EU was discussing figures.

Climate policy action will continue in 2010, not only within the UN Framework Convention on Climate Change culminating in COP16 in Mexico City in November, but also in the G20, the Major Economies Forum and other international bodies. In these continuing negotiations, a number of policy issues are key for European companies.

The ultimate aim of our efforts must be a global price on greenhouse gases across all countries and sectors, because only this will ensure an economically viable transformation of the world into a low-carbon society.

Equivalence: All developed countries must commit to binding emission-reduction targets that are equally strong in terms of quantitative reductions and the necessary financial efforts. In that respect, the evolution of the draft climate bill in the US Congress this year will be of utmost importance. On the domestic side, we call on the EU institutions not to further increase the 20% emission target until we are clear that other major economies have made more substantial and binding commitments. The EU should work with international partners to ensure that pledges to the Copenhagen Accord are as strong as possible and to fully analyse these national pledges once they are appended.

Competitiveness: Sound international competition for industry needs to be safeguarded at the global level. A process must be started so that industrial sectors exposed to international competition have equivalent obligations. Without a global level playing field, Europe should continue to give an adequate amount of free allowances to trade- and carbon-intensive industry sectors under the EU Emission Trading Scheme (ETS). The EU sticks to the emission-reduction target set for industry under the ETS, namely a 21% reduction from 2005 to 2020. Otherwise, unilateral EU action will lead to carbon leakage, i.e. fewer jobs in Europe and more emissions everywhere.

Actions in developing countries: As agreed under UNFCCC, countries have to act in line with the principles of common–but differentiated–climate-protection responsibilities and action based on respective capabilities. Advanced developing countries like China and India must commit to setting their own binding emission targets or policies so that global emissions peak by 2020 at the latest.

Transparency: All countries, except the least developed countries, must establish a strong, universal monitoring, reporting and verification regime for all major economic sectors, including land-use and forestation. A small first step towards this end was made during the Copenhagen conference, when developing countries agreed to regularly publish their domestic mitigation action according to international guidelines and to have those actions that require international support independently monitored. It is essential to build on this. An enforceable and strong sanction mechanism for non-compliance with reduction commitments must also be established.

Intellectual property rights: Technology dissemination must be promoted by creating enhanced national and regional enabling environments involving the private sector while protecting intellectual property rights. The “Technology Mechanism” created in the Copenhagen Accord must be substantiated in that spirit.

Market-based finance mechanisms: Like the Kyoto Protocol’s Clean Development Mechanism, these provide incentives to business to invest in emission reductions within developing countries, and must be strengthened. Companies need certainty as soon as possible about the future of these mechanisms after the first commitment phase of the Kyoto Protocol ends in 2012.

These views are those of BUSINESSEUROPE.


©OECD Observer No 276-277 December 2009-January 2010

Economic data

GDP growth: +0.6% Q3 2017 year-on-year
Consumer price inflation: 2.3% Dec 2017 annual
Trade: +4.3% exp, +4.3% imp, Q3 2017
Unemployment: 5.5% Dec 2017
Last update: 12 Feb 2018


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Ambassador Aleksander Surdej, Permanent Representative of Poland to the OECD, was a guest on France 24’s English-language show “The Debate”, where he discussed French President Emmanuel Macron’s speech at the World Economic Forum in Davos.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Papers show “past coming back to haunt us”: OECD Secretary-General Angel Gurria tells Sky News that the so-called "Paradise Papers" show a past coming back to haunt us, but one which is now being dismantled. Please watch the video.
  • When someone asks me to describe an ideal girl, in my head, she is a person who is physically and mentally independent, brave to speak her mind, treated with respect just like she treats others, and inspiring to herself and others. But I know that the reality is still so much different. By Alda, 18, on International Day of the Girl. Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018