VZCZCXYZ0007
RR RUEHWEB

DE RUEHLO #0875/01 0861617
ZNR UUUUU ZZH
R 261617Z MAR 08
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC 8020
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHBJ/AMEMBASSY BEIJING 1022

UNCLAS LONDON 000875 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV KGHG UK
SUBJECT: UK/Climate Change: Businesses Concerned Over 
Competitiveness, Regulatory Risks 
 
 
¶1.  (SBU) Summary: At a March 19 DCM-hosted lunch for 
businessmen on climate change, guests expressed concern 
about climate change regimes raising regulatory risk and 
eroding UK and European international competitiveness. 
Guests want an international climate agreement to bring 
in China and India, and to establish a "level playing 
field" for industry.  China has approached the UK-based 
firm "Carbon Trust" for collaboration on consumer labels 
showing a carbon footprint.  U.S. and UK boardrooms are 
much more knowledgeable on climate than they were 18 
months ago but most corporations have a gap on climate 
and environmental strategy between executive levels and 
department heads further down the food chain.  One guest 
predicted that consumers and financial firms will 
increasingly set the environmental agenda, eroding the 
policy position of NGOs.  End summary. 
 
Carbon Trust CEO Was Guest of Honor 
----------------------------------- 
 
¶2.  (U) The DCM hosted a lunch, jointly organized by the 
Commercial Section and the Business Council for 
International Understanding, on March 19 for businessmen 
to discuss issues related to climate change.  Guests 
attended from Dow Chemical, AES Electric, Rolls-Royce 
Fuel Cell Systems, ConocoPhillips, CH2MHill, Marathon 
Oil, Morgan Stanley, and Cairneagle (a financial 
consultancy).  The Guest of Honor was Mr. Tom Delay (no 
relation to the former Congressman), CEO of the Carbon 
Trust, a government-supported company that works with 
businesses to assess and reduce carbon footprints.  (For 
more on the Carbon Trust, see www.carbontrust.co.uk ) 
 
No "Chief Environmental Officer" 
-------------------------------- 
 
¶3.  (SBU) Mr. Delay opened the meeting by saying that 
boardrooms in the United States and Europe now have a 
much clearer picture of the risks and opportunities of 
climate change than they did even 18 months ago.  He said 
that many businesses seem unsure how to handle 
environment and climate at the executive level; there is 
a gap between executives making strategic decisions and 
environmental department heads further down the food 
chain.  Most firms do not have a "Chief Environmental 
Officer," he said, but he went on to cite BP as a firm 
that is "years" ahead of other firms in taking on climate 
and environmental issues as part of its basic business 
operations.  In individual conversations after lunch, 
guests expressed a desire to see more of a leading role 
played by government in showing the way forward on 
climate change mitigation.  (Note: Even among this group 
of knowledgeable executives, there was clearly 
uncertainty about climate policy and technology.) 
 
Firms Seek "Level Playing Field" 
-------------------------------- 
 
¶4.  (SBU) Competitiveness and a "level playing field" 
were the predominant climate policy concerns of the 
guests.  Delay said that China, India and other 
developing countries need to be part of a global 
agreement on carbon.  He noted that China has approached 
the Carbon Trust about establishing a Carbon Trust in 
China, and that one of the projects of interest to China 
was labeling consumer products with their carbon 
footprint.  Carbon Trust has also had discussions with 
the State of California about establishing a California 
Carbon Trust. 
 
Tough To Reconcile Growth with Cap-and-Trade 
-------------------------------------------- 
 
¶5.  (SBU)  Mr. Delay from Carbon Trust said a regulatory 
framework setting a "price for carbon" through a cap-and- 
trade system is essential for sending the right price 
signals to the private sector to encourage investment in 
low-carbon technologies.  He admitted that reconciling a 
cap-and-trade system with the need for continued economic 
growth in developing countries was a tricky problem.  He 
added that in his opinion, financial institutions and 
consumers will exercise more and more direction on 
environmental policy relative to the NGOs who currently 
set the agenda. 
 
Comment 
------- 
 
¶6.  (SBU) Business's point of view is clear: they want 
regulatory certainty and a method for keeping their 
industrial capacity in developed countries competitive 
 
with developing countries.  There does not seem to be a 
clear preference from industry for cap-and-trade. 
 
LEBARON