We need to put a price on carbon and let companies find the most cost-effective way to cut emissions, writes Renat Heuberger, CEO of the South Pole Group. He talked to Agenda as part of an interview series for the Summit on the Global Agenda in Abu Dhabi.

What are carbon markets, and can they really reverse climate change?

In order to halt climate change, close to 100% of the world’s scientists agree that we must drastically reduce the level of greenhouse gas emissions. But how? What is a fair and efficient way to do so? Carbon markets are certainly part of the answer. They essentially work as follows. A government gives an emission reduction target to an entire industry. Where and how exactly the industry achieves the emission cuts is up to the individual players. They can either invest themselves in measures such as energy-efficiency improvements, or can pay their peers to do so through the carbon markets. The market thus ensures that the least cost-intensive opportunities are identified and made use of. In other words: the maximum amount of CO2 is reduced for a given amount of dollars.

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Outside of markets, what else do leaders need to be doing to combat climate change?

At the moment, there is an amazing amount of business leadership on climate change – more than the world has ever seen before. To name a few examples:

Governments around the world urgently need to gear up ahead of the Paris climate conference. Expectations to reach a meaningful global deal including binding emissions reduction targets are very low. Therefore, attention now centers on action on national or even city level. The most important task for governments is to create rules and regulations, under which low-carbon business can unfold, including a price on carbon.

What technologies offer the most potential for helping address climate change?

Technology to address climate change is readily available, and covers a vast amount of sectors: decarbonized and decentralized energy production systems, battery storage, efficient building technology, low-carbon transport and communication systems, climate-smart agriculture, just to name a few. The problem: we need a substantial price on carbon, to improve market conditions for all these great technologies.

If you could achieve one thing at the GAC Summit, what would it be?

Our focus is on creating financial confidence, incentives and instruments to create a built environment that is net zero-emissions and resilient. My ambition is to link up with as many peers from related Global Agenda Councils as possible, to enable a platform that broadcast best practices.

The Summit on the Global Agenda 2015 takes place in Abu Dhabi from 25-27 October

Renat Heuberger is the Chief Executive Officer of South Pole Group and is a Schwab Foundation Social Entrepreneur.

Image: A bee flies to collect pollen on a mustard field in front of the cooling towers of the Temelin nuclear power plant near the South Bohemian city of Tyn nad Vltavou April 12, 2014. REUTERS/David W Cerny