The UN's climate change conference (COP15) is well underway and Minter Ellison's Special Counsel Cheryl Edwardes, has been in Copenhagen focusing on some of the significant issues impacting on Australian business and government.

In her first bulletin for clients she reports on some of the business discussions which have taken place and the government positions which have been adopted. She also shares her personal views on the process.

Business leadership

In recognition of the interdependence of environmental and social health, the mantra for forward-looking business appears to be changing from 'if it is good for the environment it is good for business', to 'if it is good for the people then it is good for business'.

International business leaders are openly saying that if governments cannot come to agreement, then business will take on the leadership role.

At the Copenhagen Climate Council's function on Saturday 12 December, key industry leaders shared their thoughts with participants. The forum was chaired by Australian scientist and author Tim Flannery and included presentations by Duke Energy, China Power International, Schneider Electric, Vestas, Coca- Cola, Arla Foods, Microsoft and Accenture.

Key messages from the business community included:

• business leaders are the key to solving the impacts of climate change
• consumers want companies to change
• business strategies should reflect a low carbon footprint in order to meet requests from clients, consumers and suppliers
• banks will be looking for low-carbon strategies when assessing forward investments.

A similar message emerged from the Climate Spark business forum, where business leaders said that 'world politicians will not solve the problem; new technology will solve the problem' and 'from the threat of climate change, comes opportunities'.

Government

The US has clearly said it is not interested in extending the Kyoto Protocol or signing a treaty similar to the Kyoto Protocol, so don't be surprised if it is replaced by a political agreement — which would not have to be ratified by the legislatures of the US and other countries (including Australia).

At a reception on Thursday 10 December Penny Wong, Minister for Climate Change and Water, reinforced that a meaningful post-Kyoto deal required a significant number of countries to sign up for binding targets. Given the reluctance of China and other major countries to adopt binding targets, this certainly raises a question mark over Australia's conditional promise to increase its emissions reduction target from 5% to 15%.

Climate change negotiations – 10 years on

Attending the COP15 in Copenhagen has allowed me to reflect on how international climate negotiations have changed since I attended COP5 in 1999, as the then WA Minister for Environment.

In 1999, discussion squarely focused on ratifying the Kyoto Protocol which created binding emissions targets for some developed nations. Kyoto concludes in 2012, so now the primary question is the nature and scope of a 'post-Kyoto' deal.

One notable difference is the serious involvement of the United States. The Obama administration has signalled an entirely new approach to international engagement on climate change. The US has sent the largest number of delegates and has a broad and significant role in all negotiations.

Technology and innovation have also moved up the agenda in political and business forums. The message is that political agreements can only take matters so far, and that investment in technology and technology transfer is the key to delivering real solutions.

The increased focus on investment means that COP15 is well attended, not just by specialist carbon funds but mainstream financial institutions and investment funds. The risks and opportunities created by climate change and carbon markets are much higher on the mainstream finance agenda than they were 10 years ago.

COP15

Copenhagen's Bella Centre is host to 35,000 attendees including 3500 media representatives. Anyone wanting to comment on the proceedings will find plenty of opportunities: microphones and speaking corners are located throughout the venue.

The diversity of interests among delegates is striking. Negotiators from developing countries and small island nations, who are fearful of the physical impact of climate change, are attempting to focus debate on adaptation, while those from larger developing countries are fixed on protecting their national sovereignty. The approach of developed countries varies widely according to their respective parliaments' position.

Debate continues on the effectiveness of various regulatory models countries are adopting or proposing to adopt, in order to achieve emissions reduction targets. Even though an emissions trading scheme (ETS) is in place in the EU, and will possibly be adopted in Australia and the US, the comparative benefits of ETSs, carbon taxes and command-and-control instruments by the energy and environmental agencies, continue to be considered. This follows on in part from the US Environmental Protection Agency's recent announcement that it intended to regulate greenhouse gases as 'pollution' under the US Clean Air Act (an Act which has as its primary objective, the prevention of damage to human health).

Several side events are being conducted outside COP15 by environmental groups, industry bodies, energy associations, economic forums and countries. The noise and colour on the streets outside the official venue has been widely reported in the press. Particularly striking are the 1000 or so young people wearing bright orange T-shirts emblazoned with the slogan "How old will you be in 2050?" a stark reminder to delegates that the future of today's youth rests on the outcomes of Copenhagen.