The UN Climate Change Conference in Cancun, Mexico, which was concluded on 10 December 2010, ended on a positive note. All parties, including industrialized and developing countries, agreed on the general objective of low-emissions policies in order to keep global temperature rise below two degree Celsius. Mitigation of global warming remains an important risk strategy. However, it appears, that adapting to the emerging reality of climate change, might become the dominant approach in the future. For the private sector, the emphasis on adaptation measures will offer tremendous opportunities.

Even though the Cancun conference, in contrast to the Copenhagen talks in 2009, reached a general consensus (minus Bolivia), concrete and binding emissions reductions schemes are still missing in the agreement. Nor did the industrialized and the developing countries approach a ‘big deal’ for emissions trading, whereby wealthy countries with a higher than benchmarked emissions per head ratio would essentially buy emission rights from poorer countries with a lower ratio. Climate activists, who think in terms of ‘carbon justice’, cannot be satisfied with the Cancun outcome, but it saved the negotiation process, after all.

Moreover, a variety of mechanisms for fostering mitigation and adaptation action on the ground took shape. This also reflects the insight, that facing the reality of steady global warming and the cumulation of weather extremes witnessed in 2010, a more pragmatic approach is due. The realization that it is time to improve early warning and protection against floods, snowstorms, forest fires, heat waves and droughts, has set in.

The more concrete agreements can be sorted as follows. A number of measures support low-carbon development. The parties strengthened the so-called Clean Development Mechanism under the Kyoto Protocol, driving investments into emissions reduction projects in developing countries. The importance of technology transfer and cooperation is also acknowledged by the establishment of a Technology Executive Committee and Climate Technology Centre and Network. Furthermore, widely welcomed as a mitigation measure, the UN deforestation scheme gained stronger backing, which means that certain countries, Indonesia for example, will receive compensation for reducing emissions by avoiding deforestation. How that kind of emissions reduction will be accounted for, remains to be worked out.

In terms of climate finance generally, a new Green Climate Fund has been agreed upon, with equal representation of the developing countries. However, the detailed structure, and particularly the funding, require further negotiations. An interesting issue is, whether the Green Climate Fund will not only distribute financial support for climate action, but also be able to raise money from auctioning carbon credits or levies on international aviation and shipping, for example. For now, the industrialized countries separately pledged some 30 billion dollars in fast start finance up to 2012 and announced raising 100 billion dollars annually by 2020. In order to generate that sum, all sources, public and private, will have to be counted in.

Finally, and of major relevance to the private sector is that enhancing adaptation action has gained a prominent status in the Cancun agreement. A new Cancun Adaptation Framework has been established to improve programs aimed at reducing vulnerability and building resilience in developing countries affected by climate change. An Adaptation Committee has been assigned with the implementation of projects, for example in the areas of water resources, health, agriculture and food security, infrastructure, socio-economic activities, freshwater and marine ecosystems, and coastal zones.

Companies active in those sectors, including insurance companies, can follow the information provided by the UNFCCC on its respective website. It details the Cancun Adaptation Framework as well as the existing Nairobi Work Programme and it links to the private sector initiative page. Apart from listing examples of ongoing engagements, the page contains useful links to partner institutions, for example to the World Business Council for Sustainable Development (WBCSD).

The WBCSD, a global association of 200 companies advocates a strong role for the business sector in developing climate adaptation projects, technology diffusion and green growth, in cooperation with governments, non-governmental and international organizations. Headed by the experienced business leader, Björn Stigson, President of the WBCSD since 1995, the association not only offers a wide range of publications about the link between responsible business activities and sustainable climate friendly development, but also entertains an impressive both worldwide and regional network of partners. As a key platform for demonstrating business cases, best practices and innovation, the WBCSD has become a major driver of international climate policy.