CEOs call for more climate change regulations
Now I normally think business confidence polls are a bit like polling children about bed time. The general pattern of events seems to be you poll some of New Zealand’s wealthiest individuals under the guise of wanting to know what business leaders of companies think. Then you assume that the business leaders’ views represent the broader business community.
To add to the scientific credibility of the exercise you don’t ask the survey respondents about anything quantifiable, but how they think other businesses than their own might be performing in the future. You then give this all to the media as a story which goes something like ‘business fears recession due to excessive regulation’ or business calls for lower taxes’ etc. You can imagine how much credibility a similar survey of business confidence that polled say unemployed mothers, or South Island naturalists might have. And yet we treat the views of this small group of business leaders as a credible insight into our economy, rather than ingenuously biased.
Having said all that though, here’s an interesting business confidence survey. It comes from the annual World Economic Forum at Davos, Switzerland and survey’s CEOs from across the entire globe.
Climate change, despite the highly-visible debate over global warming, was cited as a concern by only 34% of CEOs worldwide (down from 40% last year), while the remainder said they did not feel this was a threat to their business. Only 37% said their organisation was investing significant resources to address the risks and opportunities presented by climate change. However, in marked contrast to their fear of over-regulation, four-fifths of CEOs, called for an increase in government action to reduce emissions. Support for increased government intervention was highest among CEOs in Asia Pacific, at 90%, and lowest in North America, 64%. CEOs also favoured collaborative efforts to mitigate climate change.
To summarise, business leaders have moved on from climate change being the latest topic of the week, and are not in any hurry to do much about it. However, they do want something to be done by others. In other words they want laws to make sure that there are no free-loaders, or that everyone shares the potential cost fairly. I guess sometimes the market’s invisible hand doesn’t have all the solutions.
January 23rd, 2008 at 5:43 pm
New Zealand’s main business survey (NZIER’s quarterly survey of business opinion) gets about 500 responses from a range of business sectors, which gives it a fair claim to being representative.
Contrary to your suggestion, most business survey questions are related specifically to the respondent’s business (the general business confidence question being the main exception), and very quantifiable: specific questions about whether they’re going to raise their prices, or employment levels, and what they expect their sales to be.
There are also surveys of consumers (i.e. the general public) about their confidence, and of households about employment, and these are given plenty of credence in the media.
Does it not make sense to value the opinion of business survey respondents about things that they have either direct control over or intimate knowledge of e.g. pricing intentions, sales, and hiring plans, even if those respondents are potentially “wealthy”?
Furthermore, research suggests that business surveys have predictive power (over the short-term at least) for other economic variables, suggesting that they do indeed provide a “credible insight into our economy”.
Like any survey, the results can be slanted to fit a preconceived narrative, but the surveys themselves are undeserving of your criticism.
January 24th, 2008 at 10:06 am
the businesses are chosen at random & weighted according their size to get an overall picture of the economy, they don’t just pick a few wealthy business “leaders”
January 24th, 2008 at 11:01 am
There is logic here.
There is an underlying assumption that “improving” business to reduce environmental impact is a cost option, and for one company, no matter how well environmentally motivated, to stick it’s neck out and do “something” when their competitors do little or nothing exposes them to commercial risk.
If the government mandates that something is done then everyone jumps together, and the relative costs of the companies remain balanced.
Of course, some companies will have worked out that environmental impact reduction can bring benefits, and thus this can be a competitive weapon.