Every product or process has an environmental impact; steel production is an industry which emits high C02 emissions – the main climate change gas. Somebody, somewhere must bear the cost of repairing or avoiding the damage done. WWF Cymru believes that any decision to purchase steel should be based on its C02 emission per unit profile as well as price.

Of course, WWF Cymru acknowledges that moving to a low carbon economy will create the greatest challenges to industries, such as steel, which produce high emissions. However, as David Miliband, Secretary of State for DEFRA, stated in November 2006; "Every Industry needs to be an environmental industry in one sense or another.

Every business needs to take resource productivity as seriously as it takes labour productivity." Steel firm Corus may not share this view wholeheartedly, as it complained to the Welsh Affairs Select Committee last week that European efforts to combat climate change through the Emissions Trading Scheme (ETS) may drive steel production away from places like Port Talbot to South East Asia.

It has also compared the higher wages paid to Welsh workers with those paid to workers in India, stating that it cost £39,000 to employ a Welsh steelworker compared to £5,000 for the equivalent employee in India. This implies that steel production may move elsewhere on wages costs alone. If rules on CO2 emissions and employment conditions were applied globally they argue, steel production in Wales would be competitive.

Unfortunately, environmental agreements such as the EU's Emissions Trading Scheme (ETS) and social deals such as the minimum wage, are a long way from being legally binding worldwide. When they are, when all the world enjoys the same standard of living and there are no 'developing' countries, the cost of production will be the same wherever Corus operates. Only then will the free market result in sustainable steel production. But until that time, we, in the rich western countries of the world, have two choices: we can enjoy the benefits of low prices and accept that our factories will move elsewhere, or we pay more and so reduce the environmental and social impacts.

The Welsh Assembly Government (WAG) has also used the excuse of "global competition" for not setting targets for CO2 reduction in Wales. It fears that driving down emissions from plants like Corus would make them uncompetitive. But although it is beyond the powers of the WAG to create a 'level playing field' for steel production world wide, and a truly global free market is many years into the future, there are things that the WAG and Corus can do together that could lead the way for a sustainable steel production industry.

WAG already specifies sustainable construction methods in its public buildings: if it included the most sustainably manufactured steel as part of that specification (i.e. steel that has been produced under current best practice CO2 reduction strategies, such as the ETS) and require its partners and suppliers to do the same, it would begin to give European steel a competitive edge.

WAG and many other organisations in Wales already specify ethical and sustainable produce in their procurement policies. Such brands as Fairtrade coffee and the Marine Stewardship Council fish produce are now securing market advantage in the supermarkets, despite their higher price.

It may seem unusual and illogical, in a world where world markets provides us with everything we need at the lowest possible price, to be calling for prices in Wales to rise. But we know the cost of not acting on climate change will be massive, and will be hugely destructive to global economies, including ours in Wales. Paying a higher price now, to avoid catastrophic impacts later, is a wise policy. We cannot expect WAG to define global marketplace rules for products like steel but equally it cannot keep looking for excuses for inaction.

There are ways of using the market to drive solutions especially within industry.
Corus could lead the world in sustainable steel production, and turn the Emissions Trading Scheme into a mechanism which stimulates business advantage and turn European manufacturers into brand leaders. WWF will continue to work to make C02 reduction a company success criteria so that the markets reward those industries that are ready to lead and innovate.