An influential group of Canadian chief executives says climate change is the "most pressing and daunting" issue the world faces today and business must do its share to fight the problem. 

A task force of the Canadian Council of Chief Executives released a report Monday that calls for a national action plan that would see government, business and individuals working in concert to make real reductions in greenhouse gas emissions.

"We know enough about the science of climate change to recognize that aggressive global action is required," the report said.

The CEOs acknowledge that success in this area will come at a "significant" cost, but say it's one that must be borne by all sectors.

"The key is to make the right decisions about what investments in the short term will produce the greatest returns both now and over the long haul, for Canada's economy and for the global environment," the report said.

The CEOs argue that Canadian businesses have already done much to make their operations more energy-efficient, but say industry must do more.

The document said: "The ultimate goal must be to achieve substantial absolute reduction in emissions of greenhouse gases in Canada and globally."

But to achieve that, the report said government must ensure that companies are not "arbitrarily penalized in the short term" so they can make the necessary investments to cut their emissions while still improving productivity.

Investing in technological innovation is the best way to bring about the cleaner technologies that will reduce greenhouse gas emissions, the task force said. 

The technology funds being proposed by the federal and Alberta governments are critical to provide industry with the kind of incentives needed, the CEOs said.    

Government intervention seen

They acknowledge that market forces alone are unlikely to be enough to do the job and that some kind of government intervention will be necessary.

One way to foster the needed change, they say, is through emissions trading systems that set a cap on emissions and then allow companies to take part in a market in tradable permits — much as the Kyoto Protocol does.

The federal government is proposing a domestic emissions trading system that would allow heavy polluters to buy carbon credits from other companies as one way to meet new greenhouse gas targets.

The CEOs' report said emissions trading is "attractive in theory" and that challenges in creating a fair and effective system can be worked out.

The other way governments can persuade businesses and consumers to cut emissions is by imposing a carbon tax. "But Canadians must recognize that significant levels of taxation likely would be required to drive significant changes in behaviour."

The CEOs said they are not proposing a new carbon tax. But they say if government decides to go that route, it should replace other forms of taxation so it doesn't turn into a "revenue grab."

They also warn that "any new tax in Canada must not discriminate against any particular sector or region" — a clear reference that Alberta's oilsands operations not be singled out for special tax attention.  

The report was released the same day that Quebec's controversial carbon tax on energy companies goes into effect — the first of its kind in Canada.