1. A Corporate Perspective: the Significance of the Kyoto Mechanisms Tom Jacob DuPont tom.jacob@usa.dupont.com October 29, 2002 UN Framework Convention on Climate Change

2. F Science-based solutions... u Food & Nutrition u Health Care u Apparel u Home & Construction u Electronics u Transportation F From a global company u Operations in 70 countries

3. F A company concerned about climate change –Committed in ‘91 to reducing GHG’s –Reduced our global emissions by over 50% during decade of ‘90’s –New goals for coming decade u Attain 65% reduction from ‘90 u Maintain flat energy consumption u Source 10% of energy from renewables

4. Perceived Environmental Risk Very High Perceived Economic Risk Very High Climate Change & Industry Low

5. Perceived Environmental Risk Very High Perceived Economic Risk Very High Climate Change & Industry Low Non-Issue Low

6. Perceived Environmental Risk Very High Perceived Economic Risk Very High Climate Change & Industry Low Non-Issue Environmental Issue Low

7. Perceived Environmental Risk Very High Perceived Economic Risk Very High Climate Change & Industry Low Non-Issue Economic Issue Environmental Issue Low

8. Perceived Environmental Risk Very High Perceived Economic Risk Very High Climate Change & Industry Low Non-Issue Economic Issue Environmental Issue Low DUPONT

9. Perceived Environmental Risk Very High Perceived Economic Risk Very High Climate Change & Industry Low Non-Issue Economic Issue Environmental Issue Significant Complex Challenge Low

10. A LONG TERM ISSUE Concentration ( ppmv ) 1000 800 600 400 Stabilization at: 1000 650 450 2X Pre- Industrial Potential Concentration Targets 200021002200

11. A LONG TERM ISSUE Concentration ( ppmv ) 1000 800 600 400 Stabilization at: 1000 650 450 2X Pre- Industrial Potential Concentration Targets 200021002200 2000 Total Emissions (CtC/yr) 21002200 0 5 10 15 20 Toward Stabilization at: 1000 650 450 “Business as usual” Related Emission Pathways Total current emissions

12. A LONG TERM ISSUE Concentration ( ppmv ) 1000 800 600 400 Stabilization at: 1000 650 450 2X Pre- Industrial Potential Concentration Targets 200021002200 2000 Total Emissions (CtC/yr) 21002200 0 5 10 15 20 Toward Stabilization at: 1000 650 450 Developing country emissions “Business as usual” Related Emission Pathways Total current emissions

13. A LONG TERM ISSUE Concentration ( ppmv ) 1000 800 600 400 Stabilization at: 1000 650 450 2X Pre- Industrial Potential Concentration Targets 200021002200 2000 Total Emissions (CtC/yr) 21002200 0 5 10 15 20 Toward Stabilization at: 1000 650 450 Developing country emissions “Business as usual” Related Emission Pathways Total current emissions Kyoto Protocol

14. The Longer-Term Challenge F Continued emissions in developed nations F Growing Population --> Growing Emissions F Long-term Need –Reduce global emissions, while strengthening global economy F Increasing pressure on emissions!!

15. Longer-Term Solution F Technology evolution/revolution –Accelerate technological advancement u Encourage technological innovation F Mobilize globally –Global economic vitality --> diffusion of technology u Economic growth in more climate-friendly way F Key Notion: Cost-Effective Use of Capital

16. Markets & Flexibility F Market-stimulated investment ---> Global emissions growth –Must have global system encouraging innovation and cost-effective climate action u Workable, integrated market mechanisms u Incentive for FDI as well as climate- specific investment F Must develop, identify and act on least-cost opportunities to minimize impact of that growth

17. Greenhouse Gas Reduction Cost Marginal Cost of Greenhouse Gas Reduction Projects

18. Greenhouse Gas Reduction Cost Marginal Cost of Greenhouse Gas Reduction Projects ** + + + + + ** **

19. Greenhouse Gas Reduction Cost Marginal Cost of Greenhouse Gas Reduction Projects ** + + + + + ** ** Priority For Investment

20. 100% 20%40%60%80%100% 80% 60% 40% 20% Environmental Benefit Cost The “80-20” Rule You accomplish 80% of the environmental benefit with the first 20% of costs.

21. 100% 20%40%60%80%100% 80% 60% 40% 20% Environmental Benefit Cost The “80-20” Rule High Cost/Low Return

22. 100% 20%40%60%80%100% 80% 60% 40% 20% Environmental Benefit Cost The “80-20” Rule High Cost/Low Return Low Cost/High Return

23. 100% 20%40%60%80%100% 80% 60% 40% 20% Environmental Benefit Cost The “80-20” Rule

24. 100% 20%40%60%80%100% 80% 60% 40% 20% Environmental Benefit Cost The “80-20” Rule Trading is the key!

25. Bye, Now...