IT will be very difficult for the world to accede to 'another Kyoto-style top-down agreement' on curbing greenhouse gas emissions as economies like China and India will not be willing to set limits for their own economic growth, said World Business Council for Sustainable Development (WBCSD) president Bjorn Stigson yesterday.

The Kyoto Protocol is an international treaty that assigns emissions caps to signatory nations, mainly the developed countries, and has led to the forming of a global market for emissions rights, or carbon credits. The treaty expires in 2012.

'Kyoto is really based on countries sitting down and negotiating emissions caps, which means limiting the ability to grow,' and it is unrealistic to expect emerging economies to agree to this, said Mr Stigson. 'We need a model that is more flexible in terms of countries' contributions.'

He said the council - a coalition of 200 of the world's largest companies, with a total market capitalisation of some US$6 trillion - has devised an alternative, 'bottom-up' framework for reducing emissions, modelled after the global financial markets.

Under this scheme, companies and industries must agree to bear certain responsibilities - such as reducing emissions and transparently reporting their processes - before they gain access to a market where they can sell carbon credits.

In a March report called Policy Directions to 2050, the WBCSD looked at how this could be achieved for different countries, and published policy guidelines on how such a market could be formed, said Mr Stigson.

Companies in Asia-Pacific are already starting to pay attention to their environmental footprint, he said, thanks to pressure from their multinational clients who, in turn, face pressure from eco-conscious shareholders.

For example, one of Australia's largest logistics companies was recently told by a client, British retail chain Tesco, that it must come up with a sustainability plan within three years or Tesco will eliminate it as a supplier, Mr Stigson said.

He foresees that environmental performance will become an important prerequisite, or passport, for companies to sell goods and services to the global market, much like how the ISO 9000 standard has become a mark of quality.

The problem is that the current ISO 14000 standard judges a firm on its processes and not its actual performance, he said. There are as yet no globally recognised measures for environmental performance - this means firms like Tesco must ascertain for themselves whether their suppliers are meeting certain standards or not.

Mr Stigson also said there has traditionally been little Asian participation in the WBCSD - excluding Japanese firms, the council boasts only 19 Asian members, and none from Singapore.

Having historically focused on the Organisation for Economic Cooperation and Development (OECD) nations, the council is now trying to change this, and is in talks with Singapore firms, he said.

It could take a while. Indonesia's Asia Pacific Resources International Holdings was recently admitted as the WBCSD's third and latest South-east Asian member - the two others are from Thailand - but only after five years of dialogue.

Is this article useful to you?