Forumblog.org - The World Economic Forum Blog

Building the Low-Carbon Economy

52 companies team up with 32 experts and organizations to create a low-carbon prosperity Task Force. The task force is a response to an invitation made at the World Economic Forum Annual Meeting 2009 in Davos by UK Prime Minister Gordon Brown.

The Task Force will work with government and UN officials to develop a set of practical projects and policy proposals around the world, which will significantly stimulate the low-carbon economy from 2010 onward. An open letter was sent to Prime Minister Brown, setting out the Task Force’s suggested agenda for the coming months.

The main focus for the Task Force is to identify exactly how to create millions of green jobs in the short run and deflect economic growth onto a more sustainable, low-carbon path for the longer term.

By working with organizations such as the World Business Council for Sustainable Development, the United Nations Environment Programme, the United Nations Foundation and others, a key element of the Task Force’s work is to develop practical ideas on how to get significant flows of green technology and investment into developing countries fast. This will provide a considerable stimulus in the short run for developing countries, as well as a long-term accelerator for sustainable development and low-carbon growth.

The Task Force will be organized to take advantage of key meetings on the international calendar, in particular the World Business Summit on Climate Change in Copenhagen; the World Economic Forum meetings in South Korea, South Africa, China (Annual Meeting of the New Champions) and India; and the United Nations General Assembly in New York in September.

challenging paradigms

Related to the previous blog posted on the late 19^th Century migration, it appears that

Australia

is one of the few countries that more or less maintain a model of migration consistent with those days. They allow a controlled amount of unskilled-labor immigration, and contrary to what could be expected by European policy setters, unemployment of the local population is lowered. I actually thing the

US

accomplishes a similar feat via significant illegal unskilled labor immigration.

Paradigm to question: Countries should first find jobs for their locals before allowing immigration.

Another key problem seems to be that people skills do not match job skills. On the job training has to start playing a bigger role. On the job training and investment in people has played a much bigger role a few decades back, but it seems that the increased mobility of people and the focus on tradable skills have made the economics of investment in people poor in many cases. I’ll use a very brief economics term here, not critical, there appears to be a Nash Equilibrium in people investment. Since you cannot hold to your investment, it is better not to invest, at the end everybody ends up acting in the same way.

Singapore

’s approach to this problem is to make training mandatory.

Singapore

taxes 1% on all payrolls and makes training mandatory. I think even on countries where this type of approach could not be met, it is still clear that mutual and coordinated investment in training by a majority of the market participants.

Crazy ideas:

Put a tax of 1% on payrolls for all employees in the world and invest most of the money in training and a small portion should go to the institution that trained and educated that person, in whatever country tha may be (this could solve some of the Brain –Drain problems of the Philippines and South Africa with their medical personnel etc. )

In the same way that Supply Chain theory has been coping with ever more fluctuating demand by trying to customize products the closest to the consumer, we should take a similar approach on innovation for Education and Training. We need a new set of basic skills that allows for later stage customization according to market needs.

What kind of initiatives should the Forum be aiming to implement?

FT.com asks this question in an online poll.

Some of our existing initiatives have been quite active in the last year or so. The Disaster Resource Network used our business expertise to lend a hand in the aftermath of Hurricane Katrina and the Asian tsunami. The education initiative has now become the Global Education Initiative - the Jordan Education Initiative helped 10,000 students in 300 schools and has been replicated in the Palestinian Territories and Rajasthan. After working with our business partners to establish AIDS programmes in the workplace, the Global Health Initiative now wants these companies' suppliers and distributers to do the same. They have 2 catchy announcements coming up in the next few days...

But back to the original question - what kind of initiatives should the Forum implement?

Climate change and the G-8 challenge

There may be disagreement among G-8 leaders about climate change, but they are under pressure to do something about it. Last month, the heads of 24 global companies issued a plea at a World Economic Forum Roundtable to the G-8 for action to mitigate climate change. "Companies who move expeditiously on climate change can find a competitive advantage that will give them an edge over other companies," said expert Bud Ris, Senior Fellow, New Risks, Centre for Strategic Insight, in an interview.

Read the full interview with Bud below, and if you read French, you can catch an online chat with Bud on Nouvelobs.com

There’s disagreement among the G-8 leaders about the science of climate change. How critical is consensus on this issue to mitigating the effects of climate change?

I believe there is some positive movement towards consensus on the science, which may be one of the most important outcomes of the G-8 meeting. Earlier this week, US President Bush clearly stated that he accepts the fact that climate change is a serious problem. That brings him more closely into alignment with the other G-8 leaders and with the scientific community. A few weeks ago, 11 national academies of science, including those from the US, China, India, UK, and Brazil, issued a statement confirming that climate change is already underway and is, in large part, caused by human activity. So the views of the scientific community are very clear on this point.

Last month you co-ordinated a G-8 Climate Change Roundtable at which 24 heads of global businesses agreed that the science was convincing and issued a joint plea to G-8 leaders. What steps did they call for?

The most important recommendation was a call for a clear and consistent global policy framework -- including all the major emitters of the gases that cause climate change -- that would extend at least to 2030. In order to make proper investments in climate change mitigation, the companies need more certainty and predictability in terms of what will be required. There are many market-based mechanisms (e.g. emissions trading, carbon taxes, technology incentive programmes) that can be employed to give companies the right price signals. Different nations or regional groupings of nations throughout the world may choose to utilize different measures. But, the key point is to ensure some level of consistency among them -- that is crucial for global companies who operate in many different parts of the world.

President Bush has said that any deal along the lines of Kyoto would wreck the US economy but how potent is such a call from the private sector to spur action?

Many of the Roundtable companies are already taking action, and showing that that can be done cost-effectively - without causing significant harm to their bottom lines. Indeed, with the right kind of market-based policy framework, many say that they can create additional shareholder value by taking action. Responding to the challenge of climate change won't ''break the bank.''

Why is it in businesses’ interest to change the way they operate in order to roll back climate change?

Companies who move expeditiously on climate change can find a competitive advantage that will give them an edge over other companies. This is particularly true for companies at the forefront of low-carbon technology development. It is also good for their reputation and brands -- especially now that many investors are looking for companies who act responsibly on issues like climate change.

What would you consider a successful outcome of the G-8 meeting?

I think one of the most important and useful results would be agreement by the US, China, India, and Brazil to engage in ongoing talks about how to design a policy framework within which they could all participate. This would not have to be within the Kyoto Protocol, but could be something that would move forward on a parallel track. Additionally, an agreement to accelerate deployment of low carbon technologies and infrastructure in a handful of emerging markets (e.g. China, India, Brazil, South Africa, and Mexico) would be very helpful in moving solutions forward.

my first WEF

The WEF 2005 in Davos is my first WEF meeting, and it is quite a new experience. I am one of the Technology Pioneers for 2005, which I thought was somewhat of a big deal until I realized that I am surrounded by some of the most important people in the world today. It is pretty amazing to just randomly bump into Ted Turner and then amble into a talk by Tony Blair, followed by a short shuttle ride where I happen upon the Secretary-General of the ISO. These are all people who have a major effect and influence on my life, as well as on the lives of millions of others.

What also stands out is a sense of grand self-importance and purpose, as well as pomp and circumstance. Is it real? Can the world really be made better by the people here, or is this just a giant networking event that allows those in power to stay there, and to keep contact with their peers. There are lots of flowerly words and speeches ("talk is cheap" comes to mind, but here talk is expensive!).

This is a Big Issues meeting where topics such as Poverty and Global Governance and Islam are being tackled. But I wonder if many of the participants here would tackle poverty (in the lower case), such as helping out a homeless man in the street as they step out of their limo and onto his box that he sleeps in, or actually do something (like stop genocides such as happened in Rwanda) when it needs to be done, and not simply condemn it afterwards.

I was also struck by the easy mingling of religious leaders with politicians and businessman - the differences seemed nominal. It reminded me a bit of the section in Animal Farm where the pigs, who had become more equal than the other animals, were standing on hind legs and mingling with the humans. Should religious leaders be so at ease with the power elite? What would Jesus or Moses have done? Would they give a speech or lead a protest against corruption? Would they have dinner with a powerful CEO or would they shame him into distributing corporate profits to those poor and starving so many of us talked about at the sessions here.

What strikes me most is that the group at Davos truly has the full power to make any change in the world that could be for the better. The group assembled here has the financial resources to end poverty, or at least end poverty as we know it. It really could happen. But the power of the collective here is not fully harnessed. It is suggested that things can happen, and some things do, but the potential left at the table is beyond comprehension. This is like a group of the world's best surgeons meeting in a conference room while a patient lays on the table next door. For days the surgeons discuss what to do, they eat, they drink, and they enjoy themselves. Meanwhile the patient lays dying. Finally, at the end, one of the surgeons looks at the patient and maybe does a little work, but then he moves on to other things.

It is a great honor and very exciting to be here and mingle among the smartest minds in the world. It is also a great disappointment to realize what could be, and to know that the practical reality will ultimately be a small drop. Why?

-Rony

Is the world failing itself?

Five years ago, 189 countries and their leaders made solemn promises to solve global problems such as poverty and hunger, human rights and environmental protection. But the release of the second Annual Report by the Forum's Global Governance Initiative makes shockingly clear, that the leaders are breaking their promises. The world remains far off track to achieve its most important goals. Although the responsibility of achieving global goals rests primarily with governments, the report argues that the goals cannot be reached without the active participation of the private sector.

Now we all wonder; will they – leaders of states and business - be ready to make a difference? Is the year 2005 going to be the year of change? Or has our society become so self-absorbed that we don’t care about the greater good anymore?

Business and HIV/AIDS: Too little, too late

For years we have heard stories of what individual businesses are doing about HIV/AIDS or pronouncements on what they should do. The Global Health Initiative of the World Economic Forum has conducted a global survey to tell us what businesses are really thinking and doing.

The results? Businesses wait until rates of HIV are really high before they respond to protect their workers. Businesses in general have a very thin fact base with which to decide whether and how to react. Proven models exist, however, to guide business leaders.

What should we each be doing to ensure next year’s results show more action?

Dr Kate Taylor

Global Financial System: Time for reform?

Reform of the world's monetary system is badly needed.

Witness the Asian financial crisis of 1997 and the more recent economic meltdown in Argentina. The onward march of globalization and the emergence of the East Asian economies underscore the need for reform for the future.

But what needs to be done? And how far should these reforms go?

The agenda for reform is still taking shape and a year-long series of public-private roundtables begins in Rome on Thursday 22 July 2004. (read this press release)

The meeting marks the 60th anniversary of the Bretton Woods Conference that created the International Monetary Fund (IMF) and the World Bank.

These two institutions have been on the receiving end of some tough criticism – for example where the IMF’s governance system is concerned, it has been suggested that the US has a disproportionately large influence on IMF policymaking. Can we expect the US to initiate real reform of the IMF?

So here we go with a first step in Rome where finance leaders from G-7 and other countries, academics and experts will tackle issues like crisis prevention and how to integrate emerging economies in a new global monetary order.

There have been enough currency crises and economic meltdowns to impress on our leaders that now is the time for reform.

Fighting AIDS: cost and supply

Thousands of people from around the world convened in Bangkok for the 15th International Aids Conference. High on the six-day meeting's agenda was the cost and supply of HIV/AIDS medication.

Activists and NGOs have fought hard to get pharma companies to provide cheap or even free AIDS medicines for the millions of sufferers.

Some businesses complain that they have no choice but to give away AIDS drugs - it's a case of realpolitik rather than goodwill, they say. For example, some firms accuse governments of threatening them with removing intellectual property licenses if they do not readily provide their products.

Nevertheless, responsibility for supplying AIDS drugs does not rest solely with business.

Stockpiles of cheap drugs are not reaching the people who need them due to a lack of basic infrastructure to distribute them.

The majority of AIDS patients live in the poorest areas of the globe which are difficult to reach, where there are few if any health clinics and inadequate storage and refrigeration facilities for drugs - if they manage to get there.