by Flemming Hedén, Senior Engagement Manager at GES
Where are we on the path to fixing the climate mess that we have created? Nowhere near is the correct answer. At current speed, if all promises are kept and if already discounted technological breakthroughs become a reality, we will still be far from the goal set at COP21 in Paris.
Is anyone trying to do something about it? Clearly, yes. There is now more activity than ever before, this is true even outside of the scientific community which has been shouting about the urgent need to act for a long time. Now, non-specialists the world over rapidly go through the five stages of climate change acceptance: denial, anger, bargaining, depression, and acceptance. With acceptance in place, action is the logical next step. Luckily, it is sometimes those that resisted change most stubbornly that later become the strongest advocates for change.
That this fundamental shift cannot be stopped was clearly shown at the recent COP23 meeting in Bonn, where, for the 23rd time, the parties to the UN framework climate change convention met to work out the details of how to save the world from man-made climate change. The new U.S. president announced in June this year that the country would cease all participation in the Paris Agreement and with a key greenhouse gas emitter out of the agreement the whole thing could have fallen to pieces.
Falling apart was not what seemed to happen. Instead, the resolve of the rest of the world seemed to grow even stronger. A coalition of twenty countries and two US states, Oregon and Washington, pledged to go completely coal-free by 2030. And a coalition of US cities, states and businesses, representing more than half the U.S. economy and population, came to the meeting with a pledge to align with what the U.S. as a nation agreed to in Paris (“We Are Still In”). These are important signals to investors that, no matter what, the world will deal with man-made climate change.
Bit-by-bit, at COP23 the details continued to be pinned down on matters such as “Loss and Damage” which in general terms is a kind of insurance initiative that would oblige developed, industrialized countries to provide funds to reimburse poor and developing countries for economic losses due to the impacts of climate change. This is, of course, part of a bigger and still unresolved problem over who should pay for fixing the problem. But there is increasing agreement that we all will be losers if we continue to avoid the difficult questions.
There is also a growing awareness that by delaying action, the problem will only become bigger. Very rapidly, things that seemed unthinkable just a few years ago, now seem wholly possible and real. Just look at what is happening with renewable energy, it is exceeding expectations and projections. Still, there are plenty of reasons to say that this is far from enough and that more mental barriers need to be broken down.
Do not be surprised if, in the near future, a price on carbon emissions, perhaps through taxes, will get real teeth. Courts have already started ruling in favour of individual and generational climate justice. Now, investors need to position themselves appropriately and keep their eyes closely on the ball to stay on the right side of history.