Cutting emissions will be the toughest task facing UN climate chief Yvo de Boer as he juggles the industrial needs of developing economies with the impact of global warming. Yet many believe he can square the circle. Rhian Kelly, head of climate change at the Confederation of British Industry (CBI), has expressed a widely held view that developed nations should be set enforceable targets now from 2020 to 2050 — but leeway given to the likes of China, India and Brazil.

“By 2020 we’d like them to be taking action – and for that action to look like binding targets,” says Kelly. “We need confidence that there is a process and that by 2020 their businesses will be shouldering some of the burden of reducing greenhouse gas emissions.” That view is shared, but nuanced, by lobby group Business Europe (BE), which wants emerging nations’ leaders to be sector specific. BE adviser Volker Franz says: “What’s important is not that the Chinese building sector reduces its emissions but that the Chinese steel sector does something. An industry that produces products that are traded globally must start doing things that lead to equivalence.”

Some 1,500km away, Aldo Fumagalli also believes that equivalent efforts need to be made, though his worries are about cap and trade. And as head of the Sustainable Development Committee of Italy’s employer association, Confindustria, his frustration is over the industrialised West: “Italians are not against the idea of cap and trade but it must be applied equitably. We hope there can be an agreement that really obliges nations like America, Canada and Australia to make equal commitments.” The US objective is a 4% emission reduction on 1990 levels by 2020, whereas Europe is committed to a 20% cut.

Reduction targets is not the only issue weighing on corporate Italy, where energy costs are historically the highest in Europe, more than double that of some neighbours. Fumagalli says the priority for Copenhagen is technologies to reduce energy consumption and optimise efficiency: “This message has to be very strongly underlined and then translated into government and industrial policy.”

If there is a mood for cutting back in one area, there is a widespread desire for opening up in another: carbon trading, whether via the EU’s Emission Trading System or the UN-backed Clean Development Mechanism (CDM). Both face calls to be expanded to become a truly global with one price for carbon. Franz wants a cap-and-trade scheme that “makes it easy to link different regions and for the private sector to invest in low-carbon technologies through offset mechanisms… but they’re in their infancy and the volume so far isn’t very big.” Kelly adds: “Investment in CDM projects is dropping off as everyone waits to see what happens post-2012. The sooner we can get clarity on the new regime, the sooner business will be more confident about making those investments.”

If targets and trade mechanisms are a big part of the solution, the third pillar will be technology. The private sector is motivated by profit to develop fuel-efficient factories, better domestic appliances and renewable energy, and Copenhagen is an opportunity for governments and institutions to dangle handouts. “The free market does not provide for the take-up of green products initially because they are quite expensive,” says Wolfgang Schneider, vice-president of Environmental and Governmental Affairs at Ford of Europe. He reasons that if governments gave sweeteners to companies and consumers, the take-up of electric cars would accelerate.

At the same time, most industry figures believe that providing technology to developing nations should be accompanied by intellectual property (IP) protection, while any talk of compulsory licensing by emerging nations is dismissed out of hand. “Softening IP rights would be counter-productive,” warns Franz. “The best way to transfer technology is by normal buying and selling. We need support for clean technology markets through subsidised investments, through the CDM for example, and just need to make sure the capital for those investments is there. If, all of a sudden, the patents for clean steel plants were freely available it would stifle further innovation but I don’t think it would lead to the Chinese suddenly building clean steels plants. It would probably do no good at all, but it might do a lot of harm to the international trading climate and incentives for research and innovation.” As for the mooted compulsory licensing Franz calls this a “complete no-go”. He says: “We’re not ready to compromise. Trying to treat clean technology like AIDS vaccines goes in the wrong direction.”

There is also the bigger picture. Dr Werner Schnappauf, director general of the Federation of German Industries, believes European business needs the flexibility to choose on a caseby- case basis how to play its part in cutting emissions: “CO2 reductions are only possible with new technologies, with renewable energies and with more efficiency. We want a system which makes it very flexible for firms to decide whether they will make an investment in new technology, or buy CO2 emission certifi cates or make an investment in CDM.”

Despite some worrying portents, the marriage of business and the environment is not destined to end in divorce. Peter Löscher, CEO of Siemens AG, is positive: “On one hand, the reduction of CO2 emissions is a challenge. On the other this reduction offers a unique chance for sustainable business, which will lead to a triple-win situation for society, the environment and the economy.”

AkzoNobel, a Dutch chemicals giant, is trying to manoeuvre itself into just such a winning position. Director of sustainability André Veneman says the company’s carbon emissions are monitored from raw materials through to its finished products, reduction targets are set for each stage of the value chain and 50% of its executive incentive package is tied to sustainability. Is it all about being a good citizen? Not quite. “There are three mega trends: unsustainable population growth, unsustainable raw material scarcity and unsustainable climate change,” says Veneman. “So we expect a major transition in whatever business – mining, oil, chemicals, coatings, retail, construction etc – and only those companies able to produce products for new populations, while becoming more rawmaterial efficient and reducing their carbon footprint, will be winners.”

CNBC’s Carbon Challenge airs Wednesdays at 09.40 CET and there is also live coverage of the UN COP 15 meeting, 7–18 December.