Private sector climate action

DW: In the past you have described yourself as a pessimist when it comes to the ability of the UN and governments to lead us towards a global carbon price. Why are you a pessimist?

Caio Koch-Weser: I am not convinced that the UN is the best forum for these negotiations to come to a global agreement quickly, unless it is supported by many other initiatives from the bottom-up. I believe that we have a defining moment in 2015 with the French COP (the 21st Conference of the Parties United Nations summit on climate change, due to be held in Paris).

We should do everything possible to make this a success, but we need innovative schemes - of groups, of likeminded countries, of likeminded industries with transformational projects - to go ahead and to then go to the politicians and say 'give us a regulatory framework for this to work.'

You have called for corporations to take action to build green infrastructure investment, what is it you envision?

I envision of course very large amounts of finance to flow into a green economy and green sustainable growth. Very large amounts are already being spent on that if you look globally, but we need a reliable policy framework. We need transparency; we need policy frameworks with longevity, credibility and certainty.

I am a great believer that ‘give me a carbon price and I will deliver the CO2 reduction' is going to work - as long as this carbon price is stable, reliable and lasting. In that sense I think we can see a big wave of innovation, including in China where they have really understood the problem and are moving in that direction. For them, composition and quality of growth is now becoming much more important than just the quantity so to speak, the rate of growth.

I notice that you are quite optimistic in terms of what China might be able to bring in terms of pursuing an international carbon price.

China should do even more, but their new leadership has understood that pollution, coal and transport cost - and the quality of urban life - has become a major concern of Chinese citizens. I think they will make a virtue circle out of that, they call it ecological urbanization, the reduction of pollution and health problems.

To make this an opportunity rather than just a cost, it drives them quickly to schemes like cap and trade, or carbon taxation and of course building standards for energy efficiency. In that sense I am optimistic.

I think they understand better than some western democracies what the challenge is and what the opportunity might be. By forming clubs of likeminded sectors, like renewables and energy efficiency, it might be a bottom-up approach that complements the UN. I don't want to sound too negative on the UN, but the UN cannot do it alone.

So you would like the corporate sector to be given more opportunities to take leadership roles in combating climate change?

Yes, but also to create new ideas ourselves. I think we cannot rely on civil society demanding government setting the policy framework and then business coming in. We need a different sequence in future also, where you have civil society rightly demanding, you then have big private sector players coming together and generating the transformative ideas and concepts and then going to the politicians and saying 'for that to happen we need this and that regulatory reform or this and that incentive or policy.'

Governments are often overwhelmed these days and you need more initiative of a strategic nature coming also from the private sector in innovative alliances.

Caio Koch-Weser is the Vice Chairman of Deutsche Bank Group, Non-Executive Director of British gas and oil multinational BG Group and Chairman of the European Climate Foundation. He was a key speaker at the Energy Security Forum in Frankfurt, Germany earlier this year.