COP 28- are we on track?
Hi friendly readers,
As you may be aware, the next round of COP has just occured, featuring many debates and decisions that can effect our future in the discussion. Since there’s so much going on and so many technical terms under discussion, it can be a bit overwhelming, and leave a pessimistic ‘the-world-is-ending’ taste in your mouth, so I’m here to try and break down some of the big and bad topics into a more discursive piece.
I had the pleasure of going to a panel run by the Aldersgate group and hosted at Pinsent Mason a few weeks ago that discussed not only the kinds of things likely to come up at COP, but also what COP needs to do in order to set about achieving these goals, and as part of the audience, I looked like I was staring at my phone most of the time because I was frantically taking notes of the amazing discussion to write up for you all, which is what I’m posting about today.
The event was hosted by Hayden Morgan, Partner and Head at Pinsent Mason, and the speakers were:
⁃ Rachel Solomon Williams of Aldersgate group.
⁃ Lee McDonough of DESNZ
⁃ Bridget Beals from KPMG
⁃ Phillipa Spence at RamboLL UK.
⁃ Sophie Mirimadi from AVEVA (software company).
⁃ James Wilde of Phoenix group.
Firstly, I need to reiterate that I was taking notes as several people were having live discussion, so some points may be in great detail, and others not so much, because I’m one person with one set of hands that can only type so fast, but that’s why there’s a comment box: to add your insights and questions (don’t forget the Environmental Forum is still live if you want to take your discussions to a more general topic over there!). So, on to what was discussed. I’ve split the many (many) discussion notes I took into key themes and questions that were discussed.
(Please note- I didn’t grab everyone’s names in the audience who asked questions, so I’ll try to make it clear where someone else asked a question, but I can’t always provide the exact name, and I am working off of some very random notes I managed to take, just for transparency).
Are we on track for our climate goals? And if not (spoilers, the answer is not), what can be done?
The Global Stocktake: The release of the Global Stocktake has shown that we are not on track to achieving our sustainability goals, so it was evident that COP needs to address this, and what comes next. Furthermore, it needs to be made clear how the goals set to help our climate, which transcend across national and physical borders, can also be applied transparently across all businesses to achieve the goals we have set. We are past the target setting stage- we know the situation we are in, so how do we lay the foundations within a company scene?
Furthermore, it was identified that actually logistics is a bigger issue than changing minds in some cases. Software innovation is not occurring fast enough, and when you looked at companies willing to invest in green solutions, it wasn’t that none of them were willing, it was that there weren’t enough green solutions out there for the investment to go to! The Pheonix group for example pledged billions towards reduction solutions, so having the motivation isn’t the issue. What they’ve found is a difficulty in having investment options (which is how you end up with investment in coal, because it’s there, we know how it works, and it’s easier).
The proposed solution: increase the clarity in frameworks so that companies can actually put cases together to push for investment in new software or sustainable infrastructure where the solutions are there- because actually many are willing, but red tape gets in the way.
Can anyone afford it?
The answer, to my great pessimistic self’s surprise, wasn’t no.
In one conversation between the panellists it was actually said that in order to achieve the 1.5 goal, we need about a 17% reduction in carbon/emissions (according to PwC) and this meant that there needs to be investment worth trillions in the UK, which can actually be covered by pension companies alone. The real question is, why should they?
With UK pensions, you put your money with a pension company, they invest it for a bigger return, and then you get your monthly allowance from that to live off when you retire. Consequently, you can’t invest with no confidence you’ll get at least the same amount back (and let’s be real, you always want more back, not the same amount). So yes, pension companies alone could afford the amount required, but when there’s no guarantee, why should they?
A solution: make investment in energy efficiency more appealing and make more of them.
I know it’s so easy to make a promise and not keep it (can you see the pessimistic side coming out yet?), but there are examples of where this is in the making and can be rolled out to make good progress. The AVEVA speaker spoke about Toyota who wanted to reduce their energy consumption by 38% and carbon emissions by 25% in 18 months. Short turn around right? Well some of the solutions proposed include new carbon technology, Carbon Capture and Storage, though carbon technology is still being developed so whilst this is good, it’s not at its best, however it still has scope to improve so it just depends how you want to weigh it.
Another case study discussed was Brilliant Planet who use algae to sequester carbon at a rate 30 times greater than a forest. (and if you’re reading this thinking you’ve sniffed out Ani’s next research craze, you may not be wrong…).
However, the UK issue is that there is a lack of international money and talent, so a lot of development is transitioning to the US where the dollar has a better rate and there are tax rebates on offer for businesses that have the right criteria. At this point there was a great line mentioned about how the UK needs to develop or else “Decarbonisation can mean deindustrialisation”.
So where does the money need to go, or not go?
So after an hour-ish of talking all things environment, the talk went to where do we need to send our investment, and also where do we need to stop investing?
So first, energy efficiency:
The built environment is a huge emitter, so improving energy efficiency would help a great deal. The issue would be scaling up to make it affordable for developers and homeowners, but with Smart Systems in buildings, and the number of clients that are willing to get advice on how to improve their buildings, we have a good chance to make a positive difference.
Adapt don’t divest:
One of the key pieces of advice that was given was that companies need to price risk within their investment strategies so that when translating this into commercial policy, there can be a realistic push for achievable policy. Second, rely less on the government to drive value for certain products or trends, and instead base your strategy off the market.
As to why not divesting was recommended at this panel, there was a really cool bit of theory the speakers proposed to justify this: 25 companies are responsible for 40% of emissions, and these are ‘fossil fuels etc’ as I wrote (I was pushed for time typing as fast as speaking), but by working with these companies to develop sustainable strategies (One speaker mentioned that BP and Shell were part of the companies developing sustainable strategies), instead of divesting away from these companies, you can hold them accountable and enforce the positive change. If you drop the company altogether, someone with looser morals can snap up the connection to create even worse impacts.
In fact, oil and gas companies were cited as those in the best position to invest in renewables, if you make it look attractive enough. An audience member mentioned that according to the Lancet Countdown Publication of November 2023, the fossil fuel industry can blow the carbon budget by over 100%. Therefore, it is important to make sustainable investment look good, but with collective drivers you can translate a long term benefit as better than short term economic gain.
So are there examples where scaling up can occur in a sustainable strategy? Yes! Offshore wind is a fabulous example where government confidence and policy meant the risk associated with investment fell dramatically and investors started to chase offshore wind. The only issue is, now we need more offshore wind to invest in! (Linking back to pensions as I wrote about before, this is why coal is still invested in, because it has a ‘guaranteed’ return in comparison).
As asked by the audience: what happens if the climate goals can’t be achieved:
This one set a tone for the room, because it’s obviously not something we want to think about, but you have to.
Well there was an emphasis on adapt and focus on your best case scenario instead of simply setting back up targets and back ups, and this was because once you set one back up you set a precedent that your first target isn’t the one you really need to meet. The strategy becomes less rebuild society and more adapt NOW.
And at that, it wasn’t just stick to one goal and try and try, there was a nice focus on adjusting to your new baseline to get the most sustainable and green result. New Zealand for example has spoken about how it won’t rebuild certain places that have been hit by cyclones because it’s not viable- so they’re focussing on managed retreat and relocation- ie, adapt to your new baseline.
Which leads nicely onto the last bullet point I had written down for the entire talk, which I think is a good point to end on:
“Keep 1.5 alive”
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