May 25, 2009 / 3:59 AM / 11 years ago

Big business says needs cash to cut CO2 emissions

COPENHAGEN (Reuters) - Industry needs financial backing to reduce carbon emissions and fight climate change, business leaders told a climate conference on Monday, drawing criticism that they put profits before the environment.

Electricity pylons in Johannesburg's Alexandra township stand against the skyline of the city's Sandton business district in this May 25, 2008 file photo. REUTERS/Mike Hutchings/Files

The May 24-26 meeting of more than 500 business leaders will issue a call for governments to set clear long-term climate policies when they meet in Copenhagen in December to try to reach a new global climate pact to replace the Kyoto Protocol.

“The big constraint is funding,” said Steve Lennon, managing director of South African utility Eskom, referring to the need to cut the cost of alternatives to fossil fuel energy.

“This is not about capability, it’s about cost,” said Tony Hayward, chief executive of British oil company BP. “The issue is the gap between the energy that is provided today and the energy that we’re talking about and which today is more expensive.”

BP has a joint venture with mining company Rio Tinto to split fossil fuels into hydrogen and carbon dioxide, bury the latter and sell the hydrogen as a clean fuel to utilities — but says it needs public funding support.

A leading consultant said companies are aware of the strong public concern about global warming and do not want to be seen not to be supporting measures to slow climate change.

“Oil companies are talking about their renewable energy portfolios but investing in fossil fuels,” said Adam Werbach, chief executive of Saatchi & Saatchi S, a marketing and consultancy company.

“This is the amazing effectiveness of PR (public relations) in the last decade. A decade ago people actually said what they thought. Now it’s behind the scenes.”

Climate bonds, carbon markets and renewable energy subsidies were ideas put forward in Copenhagen by heads of companies such as PricewaterhouseCoopers (PwC) and investors Vantage Point Venture Partners as ways of promoting cuts in carbon emissions.

“(Subsidy) payments should reduce over time, be focused on carbon savings, need to reward the delivery of low-carbon energy,” said BP’s Hayward.

“That’s pretty descriptive, you can take that and translate that into legislation if you choose.”

Royal Dutch Shell, another oil major, said in March that it would scale back investments in solar and wind power because they could not compete with fossil fuels — and announced that it would increase oil output by 2 to 3 percent annually over the next four years.

PwC Chief Executive Samuel DiPiazza said businesses wanted the “gradual but aggressively challenging” introduction of carbon prices which penalize greenhouse gas emissions.

Some doubted the sincerity of large western companies which say they want to fight climate change.

“It’s just lip service that many of them pay,” said Harish Hande, managing director of the Solar Electric Light Company, which has supplied solar power to about 100,000 households in India, where more than half the population have no electricity.

Reporting by Gerard Wynn; editing by Tim Pearce

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