As a board director, I suggest we need to think about climate change and carbon pricing through the prism of risk management. What are the risks of taking action such as pricing carbon, and what are the risks of not doing so? Let's remove for the moment any personal views that climate change is real or not. From a risk management perspective we know that there is scientific support that climate change is real. That could be wrong. But as with all risk assessment, as directors we have to set our appetite for risk, and take action accordingly. Who would not take action on some other risk if we thought it was only 20% likely to occur? I would hope none of us.
Therefore the challenge is to adopt policies and programs in our organisations along the lines that GE and many other global companies have done: ask what we can do to reduce our energy consumption and to reduce our emissions. Both will usually improve our bottom lines, even if the climate doesn't change.
The world certainly seems to be taking steps along this road. The reason for introducing a price on carbon is not that our 1.5% contribution to global emissions makes a difference. Rather it is to ensure our economy remains competitive, and in fact is ahead of the game.
Therefore the challenge is to adopt policies and programs in our organisations along the lines that GE and many other global companies have done: ask what we can do to reduce our energy consumption and to reduce our emissions. Both will usually improve our bottom lines, even if the climate doesn't change.
The world certainly seems to be taking steps along this road. The reason for introducing a price on carbon is not that our 1.5% contribution to global emissions makes a difference. Rather it is to ensure our economy remains competitive, and in fact is ahead of the game.
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