If a global climate agreement doesn’t work for business, it won’t work.

Following another finish in “overtime,” the annual UN climate change conference wrapped up in Lima, Peru on December 13. This was the 20^th Conference of the Parties to the UN Framework Convention on Climate Change, or UNFCCC, and one could be forgiven for a sense of déjà vu. After all, we have become accustomed to the inevitable cliff-hanger ending of these annual “COP” meetings, just as we have come to depend on a last-minute compromise.

The Lima meeting’s purpose was to set the stage for the home stretch of negotiations of a long term inclusive climate agreement to be finalized next December in Paris. Yet despite a modest agenda, it proved extremely difficult for member states to agree to even a brief five page outcome document. In my view, this means we should not be too complacent as we look ahead to 2015. Much has changed since the international community negotiated the Kyoto Protocol in 1997, and business has a lot on the line.

Negotiators did make progress in framing commitments to lower greenhouse gas emissions and fund developing countries’ climate efforts. I attended alongside USCIB’s Norine Kennedy and many dozens of USCIB member executives and representatives of our global business network. Our colleagues from the International Chamber of Commerce played an important coordinating role, facilitating private-sector engagement across the board in Lima.

This was my fourth COP, and a major difference I noticed from prior meetings was while governments still face gaps and differences in opinion, positions put forward by business groups are converging in three key areas that are – in USCIB’s view – deal-breakers for the future of the agreement.

Commitments and Transparency

The climate agreement to be signed in Paris must provide a clear framework for international cooperative action, committing all large emitting economies to the measurement, monitoring and reporting of nationally pledged activities to control and reduce greenhouse gas emissions, such as those announced recently by the United States and China.

UN negotiators needed to reach agreement on credible measuring, reporting and verification for all national commitments to ensure transparency and assess progress going forward. In Lima, China and a number of other, largely developing, countries resisted measurement and reporting tools to ensure that countries are living up to their commitments.

Financing and Investment

We need to leverage private investment if we are to have any hope of marshalling the $100 billion in annual financing that UNFCCC parties say is required to ensure adequate resources for climate mitigation and adaptation. Yet governments seem stuck in the same old “aid, not trade” mindset. The UN’s Green Climate Fund, designed to finance developing countries’ efforts to combat climate change, did reach its initial $10 billion capitalization target. But going from $10 billion to $100 billion depends on the mobilization of private investment and innovation.

Negotiators must now work toward a 2015 Paris agreement with measures that enable markets and foster business investment – as well as government aid – aimed at reducing greenhouse gas emissions and adjusting to climate impacts. The UNFCCC should promote innovation through financially efficient and well-targeted support mechanisms to scale up new technologies and strong, protection of intellectual property.

Private-Sector Engagement

If a global climate agreement doesn’t work for business, it won’t work. This was the message my colleagues and I delivered repeatedly in Lima. With so much riding on economy-wide transformational change that will rely on the private sector, the Paris outcomes must anchor the role of business in the UN climate agreement through actions to reduce emissions, pursue efficiency, transform energy systems and build more resilient infrastructure.

We made some progress on this front. Our well-attended BizMEF Lima Dialogue (see photo) won praise for engaging with key governments and other stakeholders in support of securing the private-sector commitment and expertise that can drive meaningful change. Given the wide impact that a UN agreement will have on markets, regulations and national competitiveness, an agreed and recognized structure is needed to provide business expertise and support.

UN negotiators should make space for a business consultative channel as a resource of technical and practical expertise for governments and the UNFCCC process.

So where does this leave us, with one year to go before the big Paris climate summit? The challenge of climate change is real on economic, environmental and social fronts, with opportunities for business in new markets and for the global community to enable climate friendly development and energy access.

Negotiators have a lot of work to do between now and next December. Have they bitten off more than they can chew? I think not, but getting this agreement past the finish line will clearly require pragmatic problem-solving and engagement with the private sector. Business innovates and invests in ways that the public sector can’t, and tapping into that innovation could well be the difference between success and the same old same old in Paris next year.

Peter Robinson’s bio and contact information

Other recent postings from Peter Robinson:

What’s the Rush on Global Tax Reform? (Summer 2014)

Setting the Rules of the Road in Cross-Border Commerce (Spring 2014)

It’s Time to Clap with Both Hands on FDI (Winter 2013-2014)

Making Sure the Business Voice Is Heard in International Agencies (Fall 2013)