Proposed market-based measures from the protocol include emissions trading and "sink" credits.
Emissions trading provides opportunities for companies to cash in on efficiency gains by selling their emissions credits to others that cannot meet their target reductions. Alternatively, sink credits may be allotted in recognition of the carbon dioxide that trees absorb while growing. These tradeable credits would be allocated to forests established since 1990.
Other flexibility mechanisms allowed for under the protocol are "joint implementation" and "clean development". Both are significant opportunities for businesses.
Joint implementation allows developed countries to receive credit for investment in emissions reduction activities in other developed countries; clean development gives developed countries credit for investment in emissions-reduction activities in developing countries.
Frequently, actions that reduce greenhouse gases have other benefits, such as reduced energy costs. New Zealand is in a unique position to harness substantial renewable energy resources - hydro, wind, geothermal and biomass (including bio-fuels).
Using these energy resources not only reduces carbon dioxide liability, but also reduces our dependence on costly fossil fuel imports.
Solutions to climate change are technically challenging and subject to immense debate at national and international level. The issues are often complicated and cooperation between all sectors of society is needed to find the answers.
The Business Council for Sustainable Development believes business has a crucial role to play in New Zealand meeting its climate change obligations and developing solutions to reduce the effects.
We have accepted this responsibility by starting a project that will address the measurement, accounting and reduction of corporate greenhouse gases and explore the business opportunities that are likely to arise out of a carbon-constrained economy. The Ministry of Economic Development is co-sponsoring this project.
Specific opportunities could include energy efficiency, converting waste to energy, biofuels, ruminant efficiency, research and development of new technology and related international consultancy services.
Business requires an effective long-term framework in which to operate and the Kyoto Protocol contains the seeds of this.
The key for domestic policy on climate change is to establish a raft of policies and measures that recognise our unusual greenhouse inventory and stimulate the behavioural and process changes required to address the issue, at a pace that optimises business opportunities while minimising casualties.
The New Zealand and world sustainable development bodies share the definition of "sustainable development" adopted by the Government as development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
* Dr Rodger Spiller is executive director of the New Zealand Business Council for Sustainable Development.
Dialogue on business
nzherald.co.nz/climate
Intergovernmental Panel on Climate Change (IPCC)
United Nations Environment Program
World Meteorological Organisation
Framework Convention on Climate Change
Executive summary: Climate change impacts on NZ
IPCC Summary: Climate Change 2001
