Optimism is rising for a global COP solution Among the executives polled for this study, more are confident than pessimistic about COP21 leading to a fair and reliable carbon pricing system. Overall, 55% of respondents are confident, versus 45% that are pessimistic (see Figure 6). The most frequently pessimistic responses in our survey were from US-based participants, where 67% of respondents express pessimism that negotiations at COP21 can lead to a fair and reliable system. Global optimism may have been fueled by the general build-up to COP21, as well as the fact that companies were included in pre-meeting discussions – a dramatic change from the past when COP focused purely on inputs from governments and NGOs. However, 68% of respondents believe it will be primarily up to national governments to lead the fight on climate change. Given the lack of concrete outcomes from previous COP meetings, this is a pragmatic response from our survey respondents. “A communiqué that says we are going to agree to a two-degree world just won’t cut it in terms of giving the global investment community the certainty it needs,” says EY’s Nelson, referring to the often cited maximum target of a +2 degree Celsius change in average global temperature. Countries attending COP this year must submit intended nationally determined contributions (INDCs), which has the potential to drive a bottom- up solution to climate change, and encourage countries to take broader actions to reduce their emissions. “My greatest hope for COP21 is that it will send the signals the major markets need in order to implement policies that will achieve emissions reduction targets,” he says. “That might seem somewhat modest, but if we have the US and China setting ambitious targets for emissions reductions, it will send a significant message to the global investment community.” Figure 6. How confident are you that the COP negotiations can lead to a fair and reliable carbon pricing system? Highly pessimistic Highly confident 14% 12% Somewhat pessimistic 31% 43% Somewhat confident Shifting the carbon pricing debate I 11