Why the private sector belongs at the table in climate change negotiations

On 19 December, the Bangkok Post published “Time to take the power away from the polluters,” an op-ed piece written by Dorothy Grace Guerrero. In the piece, Ms. Guerrero argues that the private sector should not be involved in international climate change decision-making. This would be wrong.

Ms. Guerrero does, however, make a number of valid points. Ambition at the 20th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP20) held in Lima, Peru was disappointingly low; the resulting Lima Accord expresses “grave concern” over the likelihood that existing commitments will fail to keep temperatures below 2 degrees Celsius, much less the preferred 1.5 degrees. This will further raise pressure and backload expected progress to the Paris COP21, the next United Nations climate change conference in December 2015.

There is, moreover, as Ms. Guerrero argues, a deep and worrying chasm between the wealthier developed countries and the developing countries where populations are disproportionately suffering the impacts of droughts, typhoons and sea level rise. Similarly worrying is the inequities within countries, where marginalized populations of indigenous, forest-based or otherwise poor communities heavily dependent on natural resources are now being affected by climate-related disasters and unpredictability.

Ms. Guerrero goes on to lament that the United Nations includes the private sector in discussions leading to agreements intended to mitigate climate change and help countries adapt to the current and future negative impacts:  “The UN process has sadly been captured by and largely subordinated to market mechanisms as supposed solutions to climate chaos.”

However, market mechanisms – the tools of the private sector – provide precisely the type of innovation and agility that is required to develop the responses needed to tackle climate change.

Already, there is a growing global push towards a ‘green economy’ that is low-carbon, resource-efficient and socially inclusive. Strategic public and private investments in developed and developing countries are being directed to reduce greenhouse gas (GHG) emissions, improve resource efficiency and prevent the loss of biodiversity and ecosystem services. The private sector is essential to this push and can accelerate the necessary transition to a green economy by building on the synergies between green economy initiatives and climate change opportunities.

To put the issue in more specific terms, let’s consider the issue of forests, which are a key part of the global climate change equation given the role they play in mitigating global warming through sequestering carbon emissions. They are also an important part of helping local communities adapt to climate change impacts.

In order for forests to stay standing and continue to provide a rich and diverse habitat for biodiversity, there must be direct economic benefits for all concerned, particularly rural communities, the importance of which is underlined by the fact that in the Asia-Pacific region, over 450 million people are dependent on forests for their livelihoods. The private sector can play an increasingly important role in ensuring economic benefits for local communities by, for example, providing a market for these communities’ forest products, and help in assuring appropriate recognition of the rights of local communities in forest landscapes. Such private sector-local community partnership is growing as it is being encouraged by an international community which understands the potential the private sector has in sustainable development and poverty reduction. National governments are also encouraging such partnership, recognizing the valuable role the private sector can play in supporting sustainable rural development, including environmental stewardship, when the conditions for its engagement are appropriately designed.

Ms. Guerrero is correct in arguing that addressing climate change is urgent and related measures have thus far been insufficient. She is also correct in her claim that there are major equity and power differences between and within countries.

However, rather than seeing the private sector only as a threat, we should also see it as a critical part of the solution. It is through sustainable supply chain development by communities in partnership with private sector actors in an intelligent and strategic policy environment that we have the best chance of developing solutions not only to climate change challenges, but also, crucially, to the economic and overall development of the world’s most marginalized communities.

This piece was originally published by the Bangkok Post and has also been republished by The Jakarta Post.