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Guest writer Mindy S. Lubber is President of Ceres and the Investor Network on Climate Risk

I’m a bit of an odd duck here, a public interest activist among the world’s most powerful business and political leaders. These are the people with the power to effect the critical changes needed to address climate change, the people whose hearts and minds I try to win over every day at Ceres. And now they’re all here in one place.

Immediately upon arriving at the World Economic Forum I find reason for optimism – climate change dominates the formal agenda and the hallway conversations. Did I make a wrong turn somewhere and walk into an international environmental conference?

At the first plenary session, the assembled masses, mostly captains of industry, are asked if they favor mandatory caps on greenhouse gas emissions and 71% are in favor. Am I dreaming? This could be a tipping point because one year ago this would have been unthinkable. Maybe this winter’s warm weather and the lack of snow here in the Alps has finally gotten everyone’s attention.

While speeches, resolutions and workshops won’t move the world to the 70% reduction in carbon emissions by the year 2050 needed to stabilize atmospheric CO2, there is a sense of clarity, conviction, and urgency on climate change, and a growing consensus that leaving the solutions to market forces won’t cut it. If you told me a year ago that the CEOs of ten corporate giants such as Alcoa, GE, BP, Duke Power and others would be calling for mandatory curbs on greenhouse gas emissions I would have said, “yeah, right.” But a headline in the Washington Post last week read, "CEOs Urge Bush to Limit Greenhouse Gas Emissions." Now we’re talking!

Yes, even some of the most committed free-marketeers are recognizing that the markets need the clarity that emissions caps would provide; that mandatory caps would stimulate economic activity, not dampen it, and encourage smart investments in new energy efficient technologies. I sense in Davos that a sea change is underway, an encouraging turning point in public and corporate attitudes. To stem the impact of climate change we are going to need BOTH mandatory reductions in greenhouse gas emissions and the innovative power of capital markets. As Jim Rogers, CEO of Duke Energy has said, voluntary curbs on greenhouse gas emissions won’t stimulate the needed investment and usage of new technologies: "The claim that there is no CO2 abatement technology just doesn't cut it. No technology is available because no one can make money trying to develop it under a voluntary program."

What a difference a year can make.

Business leaders here are looking for opportunities to innovate and for technologies to build – venture capitalists and Wall Street investment leaders are seeing opportunities, not problems. Venture capitalist Vinod Khosla, for example, is developing next-generation biofuels that he believes can run all automobiles in the US by 2030. They are talking about how they are all lining up their businesses and strategies to reduce the risks from climate change, and more importantly develop new products that will stem climate change while making them money at the same time. After all, these are mostly capitalists and when they talk “green” it isn’t necessarily the environment they are talking about. They see climate change as a business opportunity, not just an environmental problem and that’s a good thing because innovation is going to be an important part of the solution.

Here's a smattering of the examples I heard about yesterday:

• Dupont, which hosted President Bush yesterday at its Delaware headquarters, is looking to double annual revenues from renewable-based product lines by 2015.
• More than 400 companies are making solar installations in California under the state's ambitious 10-year Solar Initiative, which will eliminate the need to build five large power plants.
• Insurance giant Marsh is developing new insurance products to help companies and investors participate in Europe's $30 billion a year carbon-emissions trading market.
  

What's needed now is a clear market signal from Washington that sets the parameters of the regulatory environment in which companies in the world’s largest producer of greenhouse gas emissions will operate. "You have to have government set the goal, set the timetable," Yale professor Daniel Esty told a group of businessmen and government officials here. Then it will be off to the races in the low-carbon, clean technology gold rush.

Ceres is a US-based coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. It also directs the Investor Network on Climate Risk, a network of more than 50 leading institutional investors with collective assets totaling $3.7 trillion.

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