Listen to this article
This is an experimental feature. Give us your feedback. Thank you for your feedback.
What do you think?
I think one of the most interesting and compelling things at Davos is how much this gathering of business leaders, politicians, NGOs, and other thought leaders has helped in sensitising and exposing people to different dimensions of what is happening in the world.
While it is true that businesses have to make a profit, and deliver value to the customers, it is increasingly becoming clear that businesses also have to create larger goals and sense of purpose, where they can make a definite and positive impact to change the world. The Davos atmosphere is very conducive to promoting these ideals in companies.
The goal of the World Economic Forum is to make the world a better place, and you have business leaders working with other leaders to discuss all the global issues that we face, such as terrorism, pandemics or carbon emissions, AIDS, etc. We’ve got business leaders participating in intense debates that discuss these topics and I think it really helps them to understand the enormity of what is happening. So when they go back to their offices, I think that their thoughts and ideas get influenced by their Davos experience in some subliminal way, leading to more positive actions. This is truly the lasting impact of Davos on everyone who comes here.
Today, I also attended a very interesting discussion with Bill and Melinda Gates and Tom Friedman. It really gave me tremendous insight into how Bill and Melinda look at the whole process of philanthropy and how they believe they can make a difference in solving some of the problems in this world. Whatever they had to say is really an important lesson for all entrepreneurs who also want to do purposeful philanthropy and is truly an inspiration for all of us.
This year Davos is clearly about climate change and sustainability. But as is common with such complex topics there is as much confusion as clarity. At Davos there is a consensus that developmental models impacting the environment need to be rethought in the context of global development, especially in the case of India and China. Today, 70 per cent of the world’s carbon emissions originate from the US and Europe. The carbon emission per capita in the US is 24 tons per annum, whereas it is 4 tons in China and 2 tons in India. Everyone agrees that if India and China achieve the same standard of living as the US, we will need more than one planet for all of us to live together.
Given the fact that 70 per cent of the world’s carbon emissions are from the US and Europe and people of India and China want a better standard of living, we cannot then deny them development. So, it is very clear that we have to fashion a new kind of development model, which is less injurious on the environment. While there is agreement on this, the question is who does what and who pays for what? It is also clear that there is a role for government and there is a role for business. For government, there are basically five responsibilities.
The first is to create regulations to encourage the right kind of behaviour. For example, having fuel emission standards for automobiles or mandating that x - percent of petrol should be bio fuel and so forth.
The second way that governments can make a difference is by creating global grading systems for different kinds of emissions so that less efficient organisations pay more. This essentially puts a price on environmental degradation.
The third way governments can achieve this is by having taxes on those forms of activities that they believe are harmful to the environment.
The fourth role of government is to give subsidies to those forms of behaviour which they think is good for the environment.
Finally, governments have to support the technological development so that new innovative ways are coming up to develop carbon efficiency technologies.
Companies in turn have to work to become more innovative, more efficient, more environmentally friendly, and have to reduce their consumption of energy, water, or plastic, you know they have to make more things biodegradable and so forth, that is up to companies to do.
So there is a role for company, there is a role for government, and often in the conversation the lines are blurred as who does what.
The other issue is who pays for all this? Developing nations believe that they should not retard their growth because of a problem created by someone else. They want adequate compensation for the cost of inventing and implementing sustainable growth.
So the key issue at Davos is, “will we be able to out of all this create a framework as to not only what needs to be done but who does which part of it and most importantly who pays for it?”