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May 26, 2009 – 7:49AM

Business leaders vowed to help world governments set a price on carbon, establishing a market that governments can use to cut greenhouse gases.

“I think we can craft some pretty clear direction,” said Tony Hayward, the chief executive officer of BP PLC.

That approach requires governments to join a new UN-administered treaty for regulating greenhouse gases that proponents hope to hammer out by December.

It would set limits on carbon dioxide and then issue permits to companies that divvy up how much of the overall pollution each of them can emit. Any unused portions can be traded to other companies.

Hayward said most executives he had spoken with agree the world “is going to establish a carbon price” – making carbon emissions a global commodity, with a universally accepted price, probably through so-called “cap-and-trade” by governments and the marketplace.

The other option is a direct carbon tax, favoured by some at the meeting.

The predictions came at a global business summit where corporate leaders are focusing on how to help politicians negotiate a new global climate treaty to succeed the Kyoto treaty that expires in 2012.

Hoping to create a global carbon market, the organisers of a world business summit on climate change said 2 million new jobs would be created in the US alone if it increased its reliance on cleaner sources of energy.

The Copenhagen Climate Council study said the US would gain that many jobs, if its electricity use grew by just half of 1 per cent a year and a quarter of its electricity came from wind energy and other renewable sources.

EU Commission President Jose Manuel Barroso told the CEOs of major international corporations that similar investments could produce a million new jobs in European Union countries.

“Change also brings big economic opportunities,” he said.

In 2007, EU leaders pledged that by 2020 the European Union would cut emissions of carbon dioxide and other major warming gases by at least 20 per cent from 1990 levels, and increase its reliance on renewable energy sources to one-fifth of all its energy used.

“Achieving a 20 per cent share for renewables, for example, could mean more than a million jobs in this industry by 2020,” Barroso said. Such a plan must be joined, he said, by “a satisfactory international climate agreement in which other developed and developing countries contribute their fair share to the limiting global emissions.”

Barroso said the EU intends to limit the cost of its package to about half of 1 per cent of its GDP.

“Some people, however, have questioned whether this is the right direction for Europe during the economic crisis,” he said, but the answer is that “the costs of climate change will be much higher if we don’t make adjustments now.”

He said the hoped for December agreement in Copenhagen on a UN-administered treaty will be “a major milestone on the path to a global carbon market which would increase business opportunities, particularly for European industry, and help to bring average carbon costs further down.”

Oscar-winning actress Cate Blanchett, the artistic director of the Sydney Theatre Company, appealed to CEOs not to let politicians fail at Copenhagen in December because of questions about who will pay the costs.

She urged them to think like her 7-year-old son Dash, who wanted to know why a dragon in a J.R.R. Tolkien story would risk setting himself on fire by jealously sitting atop a hoard of coins.

“Copenhagen must stop our butts from burning,” said Blanchett, who starred in the film version of Tolkien’s “Lord of the Rings” trilogy.

Also Monday, at a climate meeting in Paris, German environment minister Sigmar Gabriel said the talks got off to a bad start.

“The industrialised nations don’t have a common position, and the developing countries are not ready for their own reduction commitments,” he told reporters. “If we don’t agree, India and China will not respond.”

He said the United States isn’t going far enough, fast enough, since Germany wants medium-term US commitments for emissions cuts by 2025-2030, instead of 2050.

Just how far governments are willing to go is the key question at talks in Paris this week among top environment officials from the United States, China and 15 other high-polluting nations.

But at least one thing can be agreed on.

“No one contests the urgency of the problem,” French Environment Minister Jean-Louis Borloo said. “No one contests the probably irreversible character of the problem.”

The environment chiefs from nations representing 80 per cent of global greenhouse gas emissions also are discussing how to raise $100 billion ($A127.8 billion) a year to help poor countries adapt to climate change.

© 2009 AP

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