If ending climate change were easy it would have been done by now. It isn’t, which is why Rishi Sunak’s contribution to Cop’s finance day came close to failing a basic credibility test.
The UK chancellor came to Glasgow to announce the creation of an “historic wall of capital for the net zero transition around the world”. He said financial institutions had been brought together to deploy assets worth over $130 trillion in pursuit of net zero.
If so, all that remains is to identify suitable green investments. $130 trillion is equivalent to 30 years’ spending on clean energy infrastructure and climate mitigation at the upper end of the $2.6 to $4.6 trillion-per-year that John Kerry, the US climate envoy, said yesterday was needed.
It is five and a half times US GDP and more than the value of all the world’s publicly traded equities combined. It would be enough for all the tech transfer, grid reengineering, diesel scrappage, renewables subsidies and mass-scale afforestation the planet desires.
There would be no need for more Cops.
In reality…
- None of the undertakings by the 160 firms that have signed up to the Glasgow Financial Alliance for Net Zero (Gfanz) is binding.
- Like the pledges signed by countries six years ago in Paris, they are promises to publish plans, not promises to carry them out.
- According to the Carbon Tracker Initiative “none of the financial assets announced are currently aligned with net zero”, because they’re managed by investors not yet fully or in some cases even partially divested from fossil fuel producers and industries that depend on them.
The vast size of the Gfanz assets number is best thought of as a measure of the share of the financial services sector that wants to be seen as on the right side of climate history – i.e. close to 100 per cent.
This doesn’t make Gfanz meaningless. We promised not to approach Cop as catastrophists and there’s no doubt that
- private capital needs to be unleashed on the climate challenge, not least because public funds won’t come close to solving it;
- the systematic, standardised climate risk disclosure that Gfanz envisages will attract big flows of climate-friendly funds; and
- those funds are already flowing.
“We see financial centres looking for green investments all the time,” says Fiona Howarth, CEO of Octopus Electric Vehicles. “We see a real appetite [from banks] to do more in this space; to be collaborative, innovative, flexible.”
Business leaders lined up to support Sunak and Mark Carney, the former Bank of England governor who assembled Gfanz. Alison Rose, the NatWest CEO, said her senior team’s bonuses would henceforth be tied to climate action. That’s already true at Lloyds and ITV.
But remember: the context is ten years of Cop failing to line up the $100 billion-a-year of public climate finance promised in Copenhagen. Thanks to $30 billion pledged in the last few months by Japan and others that could materialise by late next year, but the narrative on the $100 billion is one of delay, failure and inadequacy. Multiple leaders including India’s Modi and the absent Xi Jinping have rightly noted it’s not nearly enough.
So three lanky men (Sunak, Carney and Kerry) came to Cop to change the narrative by promising almost literally the world. A fourth, Dale Vince of Ecotricity and the Forest Green Rovers football club, was spotted emptying his pockets at security to get into the Blue Zone.
What did he think of the $130 trillion promise? “We’ll see about that.”
The Readout
At yesterday’s ThinkIn sponsored by McDonald’s, we heard from Chris Kempczinski, McDonald’s Corporation President & CEO, and Co-Founder & CEO of Gro Intelligence Sara Menker on how to get businesses, governments, suppliers and customers to Net Zero.
The key points:
- Understanding chains of command is, in a number of ways, about power: power of the purse, power of the voice, and power to convene “coalitions of the willing” in any quest to make food systems more sustainable.
- How this translates to government power, however – moving from buzzwords and targets to a rules-based system – is a much bigger question.
- We considered whether this difference between the earth (supply) and humans (demand) need always be a fundamental tension. We may now have the data to understand the impacts and economics of different kinds of farming, but this doesn’t mean we’ve internalised them – and it certainly doesn’t mean we’ve acted upon them.
If you missed the ThinkIn, you can read our summary and watch it back in our app and online.
watch now
Catch up on our series of ThinkIns at The New York Times Climate Hub in Glasgow
Who should pay to save the rainforest?
How far can we go with the technology we already have?
Talk is cheap. What should CEOs actually do about the climate crisis?
Too slow, too many cars – can we change the electrification roadmap?
How do we kick start the renovation revolution?
eco-nomics
Debt monster
A dozen Glasgow police impounding a four metre tall, eight metre long inflatable Loch Ness monster will linger as a defining image of activism at Cop. Police Scotland said it was seized because it “breached maritime restrictions” put in place for security and safety. But there was a serious message behind the inflatable – debt. Specifically, the “monstrous” debt of poor countries holding them back from taking climate action. Heidi Chow, executive director of the Jubilee Debt Campaign, told Tortoise the campaign wanted to put Nessie on the Clyde next to the conference centre to highlight the importance of tackling debt “if we are going to achieve climate justice”. She isn’t alone in pushing for debt to be on the Cop agenda, and indeed its absence is peculiar. Mohamed Nasheed, the former Maldives president who speaks for the Climate Vulnerable Forum, a group of 55 countries representing over a billion people in the countries hit hardest by climate change, is asking at Cop for $500bn of climate finance along with debt relief and restructuring to lighten the burden of existing debt and new debt from climate finance loans. As he noted on Tuesday, “the Maldives cannot pay its debts if it is underwater”.
engagement and activism
The 40,000
Glasgow was expected to be the biggest Cop ever – and the numbers that prove it. Analysis of the provisional participant list by Carbon Brief shows that just shy of 40,000 people registered to attend. 21,688 of them – more than twice the number actually allowed in the Blue Zone because of Covid – represent nation-states and the European Union. Only three countries didn’t register any participants – the island nation of Kiribati (at severe risk from the impact of climate change but also Covid), and Myanmar and Afghanistan (which have both suffered recent political upheavals). The true picture of who actually came to Cop won’t be known until later. The virus, accommodation shortages and quarantine rules will likely mean many others will have been forced to stay away – and on a given day, many of those who did come won’t get in.
policy
Flower of Scotland
Despite the lack of a seat at the negotiating table, Nicola Sturgeon has been keeping up appearances at Cop. No wonder; the Scottish First Minister has green credentials to tout. They include a high-ambition net zero target of 2045, 97 per cent renewable electricity consumption and a sizable store of carbon in Scottish trees. But while it’s been all smiles during meetings with Biden, Sadiq Khan and Greta Thunberg, Sturgeon has made efforts to distance herself from the Cop presidency and Boris Johnson has given her plenty of ammunition. The latest point of contention is Westminster’s decision to give the green light to two carbon capture and storage projects in the north of England over a third in the Scottish North Sea. Speaking at the launch of the New York Times Climate Hub, based in what’s usually a huge night club not far from her home turf in south Glasgow, she expressed a hope that Johnson would reconsider the project post-Cop. You’d have thought a true Unionist would invest in a little goodwill.
science and tech
Cryo-shame
The prize for the saddest pavilion in the giant northern lobe of the conference centre where delegates go to get footsore and nod off is hereby awarded to the Cryosphere pavilion. It’s staffed by cheerful types from snowy places but they hit you with tall storyboards as you walk in, and the stories are almost all about melting. One says a maximum of half the current glacial volumes in polar regions and the Himalayas will still be there at the end of this century even if all current nationally determined contributions (NDCs) towards cutting emissions are adhered to. There’s one glimmer of hope. “Snowfall and seasonal snowpack would begin to return as soon as temperatures decline”. Some trends are reversible.
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Thanks for reading.
Giles Whittell
@GWhittell
Additional reporting by Ellen Halliday, Phoebe Davis and Barney Macintyre.
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