By Ben Hirschler
DAVOS, Switzerland (Reuters) - Climate change is back on the global agenda, with debate in the corridors at Davos given fresh impetus by U.S. President Barack Obama and U.N. Secretary-General Ban Ki-moon both highlighting it as top priority this week.
Yet business leaders are still struggling to find the economic incentives to change current practices.
The World Economic Forum (WEF) has not held back in its own assessment of the dangers, with former Mexican president Felipe Calderon warning of "a climate crisis with potentially devastating impacts on the global economy".
Christine Lagarde, managing director of the International Monetary Fund, summed it up for any Davos doubters: "Unless we take action on climate change, future generations will be roasted, toasted, fried and grilled."
There is a disconnect, however, between increasing evidence of extreme weather - from Superstorm Sandy in the United States in October to record heat in Australia this month - and the limited response from politicians and businesses.
In some cases the clash is stark, as highlighted on Friday when Greenpeace activists shut down a Shell gas station near the WEF meeting in protest at oil drilling in the Arctic that is made easier by a warmer world.
Many companies tout the opportunities presented by a shift to a low-carbon economy, yet the reality is that the continuing economic crisis has discouraged businesses and governments from developing a truly long-term view.
The rapid growth in shale gas - a greener alternative to coal when it is burned, although not when it leaks into the atmosphere - has also made renewables comparatively less attractive, adding to the challenge.
LACK OF URGENCY
The result is that while global investment in renewables is rising, the world still needs to spend $700 billion each year to curb its addiction to fossil fuels, according to a study issued by the WEF this week.
"There is a clear lack of urgency in the climate debate," said Greenpeace Executive Director Kumi Naidoo. "Big business is holding us back."
Business, in turn, complains that the failure of governments to provide a clear regulatory framework limits its ability to plan for the future.
After past failures, governments aim to work out a new U.N. plan to address climate change in 2015 but it will only enter into force from 2020.
"Climate change is a long-term issue and it is not clear how it is going to play out or what the returns are going to be," said PricewaterhouseCoopers International Chairman Dennis Nally.
"So CEOs have to measure how this investment stacks up vis a vis other opportunities that can generate clearer returns."
In practice, only a quarter of CEOs surveyed by PwC said they planned to raise investment in climate risks as cash is rationed and allocated to projects with the most obvious near-term commercial returns.
That doesn't mean CEOs are not worried, according Fred Krupp, president of the Environmental Defense Fund, who said virtually every corporation was affected to some degree. Continued...