Framework conditions for action: A Business perspective European Commission stakeholder conference: Post climate policy for the EU, Brussels, 22 November 2004 Laurent Corbier Program Director, Energy and Climate

2 2 EU Stakeholder mtg _ 22 November 2004 Talking points 1. The WBCSD 2. Context, trends, and challenges 3. Energy options 4. Business perspective: conditions for action

3 3 EU Stakeholder mtg _ 22 November 2004 WBCSD leading international companies 35 countries 20 major industrial sectors Total turnover (2003) 4400 BUSD Employees 12 M Customers each day2.5 B Regional Network 48 national/regional BCSDs and partner organizations representing 1200 local members, mainly in developing countries

4 4 EU Stakeholder mtg _ 22 November 2004 EU, NA and Japan: 80% Regional Network: a counterbalance EU 66 North America 51 Japan 21 Europe - EU North America (incl. Mexico) Asia (Japan & Korea) Europe - Other Latin America Central & Eastern Europe Oceania Asia Africa & Middle East Membership by geographical distribution

5 5 EU Stakeholder mtg _ 22 November 2004 Overall context Rising population Development and poverty alleviation Energy supply and consumption Global warming How do those themes interact? Millenium Development Goals (2000) WEHAB, (2002)

Energy and climate change Facts and Trends to 2050 to set the scene…

7 7 EU Stakeholder mtg _ 22 November 2004 Facts and Trends to 2050: what do we learn? Four key messages… Growth, development and energy demand: the magnitude of the challenges ahead, Energy use and climate impacts: the growing concentration of GHGs and the risks for our societies, The dynamics of technological change: it cannot happen overnight, so we must act now, Options for re-shaping our energy future: a necessary combination of solutions, including behavioral changes…

8 8 EU Stakeholder mtg _ 22 November 2004 Energy options : reshaping our energy future New energy systems are necessary, and so are transitional steps… The rapidly growing energy demand and the variety of needs, require to keep all energy options open. Inertia will prevail: practical timelines linked to practical objectives are key, In that context, three major phases: Energy efficiency and energy conservation CO 2 capture and geological sequestration New and advanced technologies

9 9 EU Stakeholder mtg _ 22 November 2004 Energy options (contd) In addition to energy efficiency and conservation extensive decarbonization of current fossil sources, improved penetration of new renewables, which currently only represent a few percents of the total mix increased use of biofuels, and deployment of hybrid vehicles utilise full potential brought by hydroelectricity and nuclear generation

10 EU Stakeholder mtg _ 22 November 2004 Energy options (contd) Key factors of success and rapid transition R&D, innovation technology diffusion increased international cooperation.

11 EU Stakeholder mtg _ 22 November 2004 Consequences for a global stategy Immediate action Global action Shared objectives and efforts

12 EU Stakeholder mtg _ 22 November 2004 Business has an important role to play Business contribution is key to build new energy systems that respond to the « 4A » principle: Accessible, Affordable, with Acceptable impacts and Adequate returns. Such contribution will be particularly focused on: getting a shared understanding of the facts, and of the resulting challenges facing us; bringing realism and pragmatism into the debate around solutions; proposing acceptable and cost effective solutions, through innovation and increased energy efficiency; participating to the design and implementaion of workable framework conditions.

13 EU Stakeholder mtg _ 22 November 2004 The business agenda What does business need to operate and deliver? Markets Some degree of visibility / predictability Cost-effective frameworks A level playing field And a consultation and cooperation process

14 EU Stakeholder mtg _ 22 November 2004 Current framework conditions Increased Awareness Some early and concrete actions KP: first attempt for a global scheme Local or regional initiatives Emerging carbon market EU-ETS: showing leadership No global involvement Countries Private sector A Fragmented world Complex mechanisms High transaction costs Slow action Achievements and weaknesses

15 EU Stakeholder mtg _ 22 November 2004 What do we need to move forward? A long term action Long term framework A global action An inclusive approach An effective response to the challenge Practical and efficient mechanisms and tools A cost effective action Minimized bureaucracy and costs

16 EU Stakeholder mtg _ 22 November 2004 Key features for a global framework Short term priority:energy efficiency and conservation, Long term objectives: realistic and quantifiable, Global framework and decentralized and focused implementation, Global participation: all emitters; innovative schemes, Mechanisms: workable, cost effective, market-based, Technology development and deployment: resources and new type of collaboration.

17 EU Stakeholder mtg _ 22 November 2004 WBCSDs contribution WBCSD, through the involvement of its member companies, has designed its work programs - such as the Energy and Climate program - to develop the Business contribution. It also promotes and facilitates wide-reaching consultations and dialogues around the identified challenges and related tools and options.

Thank You !