TOPIC OF THE WEEK- TWEEK
Climate change compliance creates entrepreneurial opportunities
THE COP SERIES
Nikhil Bramdaw South Africa 2 December 2011
“It always seems impossible until it’s done”, Nelson Mandela. Adopted as an unofficial theme of the UN Conference of the Parties (COP) 17th conference on climate change mitigation in Durban (28 November-9 December 2011), the sentiment by Nelson Mandela hints at the complexity of the issues that are being tackled at the gathering. While the issues are themselves complicated, the tangled diplomacy required to reach a multilateral consensus has in itself provided much fodder for the voracious (and often partisan) media present in Durban, South Africa. One broad fault line has already emerged between the developed and the developing world and their respective commitments to reducing carbon emissions. This has already led to Canada’s withdrawal from negotiations (to be formally announced in 2012) and much suspicion building around the position of the United States. The broad objective of the discussions is to secure a second commitment period to the Kyoto Protocol to reduce emissions. Effective from 2008 and anticipated to be renewed in 2012, the Protocol has proved to be the most significant sticking point at both the preceding Copenhagen and Cancun deliberations on climate change.
THE GREEN ECONOMY
In this complex scenario, however, while governments haggle over targets and emissions volumes, a trend has emerged where the private sector has embraced the ‘green economy’ with greater enthusiasm than policy dictates require. While this is a positive reflection on corporate social responsibility, it also makes good business sense on a number of levels. One of the more obvious of these is the enhancement of corporate reputation. A responsible corporate citizen is often and perceived to be an attractive one. Beyond the sometimes intangible reputational kudos that can be earned, there are real bottom line advantages to addressing climate change as well. The incentivisation of initiatives (through tax relief, for example) which address climate change is likely to grow as policy matters get more firmly bedded down as well. In such a scenario, the entrepreneur often has the opportunity to shine.
PROSPECTS FOR THE ENTREPRENEUR
Opportunities may be greater for smaller entrepreneurial enterprises, because they are generally they can take advantage of an agility which results from smaller operations, smaller bureaucracies and have fewer decision-makers. Where compliance has been regulated or legislated, the requirements of a smaller enterprise are often less onerous as well. The second area of opportunity lies in the development of solutions that are climate-friendly. Technology, for example, often plays a significant role in managing and measuring emissions, energy usage and renewable and non-renewable resource consumption. Gathering data for their own sake is not the objective of such initiatives, however; enhanced reporting is. The solutions do not always have to be high-tech either. In the developing world, low-tech solutions relating largely to supply chain and logistics issues have also found their place. Developing environments also offer fertile ground for innovation. The ubiquitous mobile phone, for example, has provided rural populations with opportunities ranging from mobile banking to media access. Technology also provides opportunities in the development of infrastructure related to energy generation. While solar and wind energy generation have been the preserve of an eccentric few in the past, they are increasingly entering the mainstream as alternatives to coal or nuclear sources of power. The scope for innovation here is still quite large as are opportunities to plug into mainstream power grids as alternative energy sources. As COP17 unfolds and some of the policy matters are decided, the regulatory uncertainty which bedevils the area should be addressed. This would also provide a clearer view for entrepreneurial opportunities.
As part of the COP Series, the World Entrepreneur Society will provide exclusive insights and unique stories deriving from the 17th conference on Climate Change in Durban.