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The world is still struggling to implement meaningful climate policy

by Ace Damon
The world is still struggling to implement meaningful climate policy

“HOW DARE YOU!” Even by her passionate standards, the UN General Assembly address by Greta Thunberg, a young Swedish climate activist, was exciting. "How dare you continue to look away and come here saying that you are doing enough when the necessary policies and solutions are not yet in sight." She has seen or heard little at the one-day UN climate summit or across the region. a series of meetings around her that made up the New York weather week to placate her anger.

The summit ended with a torrent of new announcements. There was a commitment from 65 countries and the European Union to achieve zero net carbon emissions – removing as much carbon dioxide from the atmosphere as they are producing – by 2050. Germany, Slovakia and other countries have joined an alliance to halt construction of power plants. coal; 32 countries are now members. Companies and investors have announced measures to reduce emissions from remittances, buildings and more. Narendra Modi, Prime Minister of India, has set a new target of 450 gigawatts for his country's renewable energy capacity, more than five times the current level. UN Secretary-General Antonio Guterres said he was pleased: "Today, in this room, the world has seen clear ambition and concrete initiatives."

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Some ads were promises of future ads. In total, 59 countries said they would soon be making more ambitious commitments under the Paris agreement, which aims to keep global temperatures "well below" 2 ° C above those in preindustrial times; A global round of such increased commitments will be negotiated next year.

Even if all promises are kept, the difference between what the summit has promised and what needs to be done remains a gulf. If Modi quintupled India's renewable energy capacity in 11 years, that would represent annual growth no higher than worldwide renewable generation in the 2007-17 decade – and he said nothing about controlling the support that state-owned banks in India have. India offer coal companies. India has not committed to net zero by 2050 or any other time – just like the US, China or Russia.

Far from the UN, the companies took action. About 87 companies, including Nestlé and Salesforce, a major software-as-a-service provider, pledged to achieve zero emissions in their business by 2050. Jeff Bezos made them ten years better, announcing that Amazon would reach zero by 2040. and was buying 100,000 electric trucks to achieve that goal. Overall, about 650 companies, with a market value of $ 11 billion, have signed up to the Scientific Goal-Based Initiative, a consortium of NGOs that certifies and monitors the commitments companies make to align with Paris goals. Many aim to reduce emissions by about 2.5% per year. They are trying to reduce energy consumption in their supply chains and also in the way their products are used. On average, these emissions are nearly six times higher than a company's direct operations, says Alberto Carrillo Pineda of CDP, an NGO that monitors corporate climate efforts.

Unfortunately, while goal-setting companies represent 14% of the stock market value in the world, they emit only 2% of their carbon. Between 1988 and 2015, according to the CDP, 71% of greenhouse gas emissions came from fossil fuels sold by 100 energy giants. On the afternoon of September 23, heads of companies such as ExxonMobil, Royal Dutch Shell and BP sat in the airy Morgan Library for a forum organized by the Oil and Gas Climate Initiative, an industry effort to reduce emissions from operations and invest in technologies that help mitigate climate change.

The companies promised to limit methane emissions and highlighted their investments in carbon capture and sequestration. But they also explained that they continued to develop new oil and gas fields. "We are meeting the demand for a product that improves the quality of life in the world," said Mike Wirth, chief of Chevron.

They are unlikely to stop unless demand falls. This can happen if or when the regulatory war on carbon enters a new phase. A new report from Principles for Responsible Investment, an unsupported investor group with $ 86 billion under management, predicts "abrupt and disruptive" climate policies by 2025, when authorities agree on the urgency of the climate challenge. Bank of England Governor Mark Carney used his UN speech to emphasize the need for companies to be made to disclose the costs that climate change and climate policies could bear.

A supplement to better assess the climate risks of investing is to invest in things that reduce climate risk in the first place. This is the goal of the Climate Finance Leadership Initiative (CFLI), a handpicked group of banks, asset managers and energy developers by Michael Bloomberg, former mayor of New York City and UN special envoy on climate change.

There is a huge need for energy investment in poor countries. There is a huge amount of capital in the pension funds of the rich world. At present, however, carbon-free energy in developing countries does not appeal to their appetite for safe and reliable investments.

That's where CFLI comes in. By bringing together asset managers such as AXA and the Government of Japan Investment Fund, banks like HSBC and energy project developers such as Enel, it can cover the line of renewable investment projects – from raising capital and allocation for project development.

In a recent report, the CFLI said closer ties between private finance and development finance would allow greater use of risk-sharing tools between public and private investors. With that in mind, on 25 September the CFLI announced a link with the Association of European Development Financing Institutions. Association members have experience in emerging markets; they can define CFLI projects and bear some of the risks.

CFLI plans to invest $ 20 billion over the next five years. Compared to the trillions needed in clean energy, that doesn't sound like much. HSBC's Daniel Klier argues that by creating successful pilot projects, CFLI can demonstrate the appeal of its strategies to remove risks from renewable energy investments.

These promising initiatives are unlikely to appease Thunberg. "All you can talk about is money and fairy tales of eternal economic growth," she raged at the general assembly before seeking to recruit another UN body for her cause. Under the “third optional protocol” to the Convention on the Rights of the Child, the Committee on the Rights of the Child may be required by children who are denied their rights. Thunberg and 15 other young people have filed a complaint against five countries that have ratified the protocol – Argentina, Brazil, France, Germany and Turkey – for following climate policies that do not respect or protect the rights of children. They are nothing if not determined. ■

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