Financial Times

Letters

Sir, It is unfortunate that Pilita Clark and Ed Crooks present the call from leading oil and gas firms for the widespread introduction of carbon pricing mechanisms in the context of a supposed transatlantic schism (News, June 1). In reality, the prevailing international business view is somewhat more nuanced than it might at first seem.

The anticipated Paris climate agreement will combine a broad range of national and local approaches to combating climate change in what will be a novel form of “bottom-up” global architecture. Carbon pricing instruments (Letters, June 1) can certainly play an important role in spurring emissions reductions in those countries or regions that choose to use them; but it is important to recognise that they are just one part of the policy mix. While carbon pricing may be the most cost-effective climate solution in some countries, other approaches — such as incentive-based systems or efficiency standards — may be a more viable option elsewhere. What’s more, carbon pricing schemes also need to be carefully designed to promote a global level playing field for commerce and to enable future trade-driven growth.

This leads to an important secondary point: the intervention from leading European energy firms is illustrative of a broader effort on the part of the private sector to engage constructively in the development of climate policy. That’s why leading business networks called last month — at the conclusion of the first-ever Business and Climate Summit — for governments to establish a recognised consultative role for the private sector under a future climate accord. Better harnessing of business know-how would be a significant step forward in the way we go about addressing the shared challenge of climate change — irrespective of the specific policy instruments employed.

John Danilovich
Secretary-General
International Chamber of Commerce
Paris, France