World leaders are unable to agree on a joint global climate policy. If we seriously want to reduce the world’s CO₂ emission, we should be focusing instead on the contracts made by companies in Europe and the USA with their suppliers in developing countries. Research shows that large amounts of CO₂ could be saved.

2013.10.04 | Ida Hammerich Nielson

When a factory in China emits a sizeable amount of CO₂ into the atmosphere, it can result in tornadoes in the USA. The climate problem is global,but the countries of the world are unable to reach agreement on a global solution.

Instead, they have different regulations regarding how much CO₂ companies may emit. But what is the use of strict regulations for CO₂ emission in a country like Denmark if Danish companies move their production to a country that allows significantly more CO₂ emission? This brings us back to square one.

Katerina Peterkova has studied law, and she has just submitted her PhD dissertation on sustainability.Her work included studies of a new type of CO₂ regulation that could provide better results internationally than agreements and regulations within the individual countries. She proposes taking a look at the companies’ agreements with their suppliers.

“When Danish companies move their production to a country like China, they must have a contract with the supplier. In this regard, it could be an advantage if they influenced the supplier to emit less CO₂, for example by writing that they’ll only approve a supplier that reduces their emission of CO₂ by five per cent per year,” she says.

Legislation must help companies

More and more companies in Europe and the USA are already using their contracts with suppliers in developing countries to reduce CO₂ emission – partly because they are under pressure from consumers, NGOs and investors in their own countries.

And this is the way ahead, according to Katerina Peterkova. “However, the countries’ governments must to a greater extent help the companies to include demands for less CO₂ emission in their contracts and to do so in a standardised way,” she says.

“One option is that the governments ask the companies to report what efforts their suppliers are making to reduce their CO₂ emission.At the same time, the governments could advise the companies and provide them with financial incentives to include CO₂ emission requirements in their contracts,” she adds.

Large amounts of CO₂ could be saved

Katerina Peterkova tried to calculate the amount of CO₂ emission that could be saved if the companies systematically made demands on their suppliers regarding their CO₂ emission. Her findings include estimates for specific industries, including the food and drink industry, which emits a considerable amount of CO₂.

“If the world’s eight largest companies in this branch – including Danone and Coca-Cola – demanded that their suppliers reduce CO₂ emission by ten per cent, it would be the equivalent of saving the annual CO₂ emission from an entire country like Greece. It would really make a difference,” she says.

 

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Katerina Peterkova’s research results were presented at the Science for the Environment conference, which attracted approximately 150 participants from all over the world to Aarhus University last Thursday and Friday.

Science for the Environment

 

Further information

Ph.d. Katerina Peterkova, Aarhus University, School of Business and Social Sciences, Department of Law, Tel. +45 87165186, katpe@asb.dk