In my opinion Green Leaders should lead a change of mentality to make each industry and market understand that environmental abatements costs should be include in the financial model in a fair way. In other words the industry should internalize part of the costs and consumers should also pay for another part of it. Finding the right balance is where the challenge relies and this is what the market will dictate.

With regards to how to incorporate this into the new agreement, it could be incorporated in the capacity building option mentioned in the statement Yvo de Boer presented at the opening of the Barcelona Climate Change Talks 2009 (http://unfccc.int/files/press/news_room/statements/application/pdf/091102_opening_speech_barcelona.pdf). For now I would foresee it as a general statement without detailed actions but still worth to start transmitting this change to society.

Nicole, what do you mean by "Green Leaders"? Environmental regulations put in place by government and legislature in each country can define ways in which the environmental costs associated to certain production processes, or products use, are internalized by companies.

This is a well established topic in the realm of Environmental Economics. Pollution (in whatever form: gas, solid, liquid... into the air, soil, water) produces an effect to humans and the natural environment, often in negative ways. The costs associated to such effects are seldom considered in the production and/or use of products... and by products we could include electricity generated in thermal plant that burns coal, for instance. And in use, the emissions coming out of the tailpipe of cars.

Environmental legislation can force or make mandatory the internalization of costs. THe problem with greenhouse gases is that they are not considered "pollutants" in most of the countries, therefore, there is no way to have an standard, norm or legislation that "internalizes" the costs. Only recently the Environmental Protection Agency, in the United States, has given the authority to regulate CO2 emissions, on the basis that "CO2 is a pollutant". That is an example on how this could move forward.

But on the other hand, once the cost is internalized in the Income statement of companies, there is nothing that stops them from increasing the price of their services and products and pass the cost to the consumer. Of course, the consumer can decide on which products and services consume.

Overall. Internalization of costs derived from the global, regional and local impacts of climate change, is a difficult task. Not because of lack of leadership, but because of the complexity on making it operational. And, what costs should be consider when deciding what to internalize? How to attribute to specific companies in every single country ofthe World how much of the cost should be covered by each of them? If the problem is from emissions, what do you do with the emissions accumulated now in the atmosphere that were created (or emmited) in first place by companies that no longer exist?

More questions than answers.