Two Reasons Why the Private Sector is Slow to Cut Carbon
This blog post was originally posted on the Globalisation and Development Blog on 9 March 2012.
Last week we started a new IDS seminar series on Business and Climate Policy. The reason for bringing business into the climate change debate is clear. For the green transformation to happen it requires enormous investments. The International Energy Agency estimates that 85% will need to come from the private sector.
We ask our speakers (from the private sector) to address two issues:
Our first speaker was Jonathan Shopley*, Managing Director of The Carbon Neutral Company and Board Director of the Climate Markets & Investors Association. Shopley’s own work is concerned with accelerating green private investment but his excellent seminar served to keep a sense of realism about the pace of change.
My two main take-aways were:
The latter is in fact an old dilemma for progressive policy makers. In order to bring about change they need to work with the private sector. The problem is that the sunrise industries they seek to support are poorly organised, while the sunset industries are highly organised in business association and have strong policy networks. The late Joerg Meyer-Stamer called this the ‘life cycle paradox’ of industrial policy**.
**Joerg Meyer-Stamer, ‘Paradoxes and ironies of locational policy in the new global economy’, in Hubert Schmitz (ed), Local Enterprises in the Global Economy, Cheltenham: Edward Elgar 2004, pages 326-348.