The world has limited time to act if it wants to avoid the worst effects of climate change.
The covid-19 pandemic was the big problem of 2020, no doubt, but I hope that by the end of 2021, the vaccines will have been activated and we will talk more about the climate than about the coronavirus.
This coming year will be decisive in tackling climate change.
According to Antonio Guterres, UN Secretary General, we are at a “tipping point” for the climate.
In the optimistic New Years spirit, here are five reasons why I think 2021 could confuse fatalists and see a breakthrough in global climate ambition.
1. The crucial climate conference
In November 2021, world leaders will meet in Glasgow, Scotland, to work on the successor to the historic A sane Paris 2015 .
Paris was important because it was the first time that virtually every nation in the world came together to agree that they all needed to help address climate change.
The problem was that the commitments made by countries to reduce carbon emissions at the time did not reach the goals set by the conference.
In Paris, the world agreed that by the end of the century the increase in global temperature would not be above 2 ° C compared to pre-industrial levels. The goal was to limit the rise to 1.5 ° C, if possible.
The reality is that we are not moving in that direction.
Under current plans, the world is expected to exceed the 1.5 ° C limit in 12 years or less, and reach 3 ° C of warming by the end of the century.
Under the Paris agreement, countries promised to meet again every five years and increase their carbon reduction targets .
That was supposed to happen in Glasgow in November 2020, but due to the pandemic it was postponed for this year.
Thus, Glasgow 2021 can be a meeting in which cuts to carbon emissions are increased.
2. Large emission reductions
The biggest announcement on climate change last year came completely out of nowhere.
At the UN General Assembly in September, Chinese President Xi Jinping announced that his country was aiming to become carbon neutral by 2060.
Environmentalists were stunned.
Reducing carbon has always been seen as a costly endeavor, but here was the world’s most polluting nation , responsible for about 28% of global emissions, pledging to cut its emissions unconditionally, regardless of whether other countries will follow suit.
That was a total change from previous negotiations, when everyone was afraid to bear the cost of decarbonizing their own economy, while others did nothing, but enjoyed at the expense of those who had done the task.
China is not the only one to have this initiative.
In 2019, the UK was the first of the world’s major economies to make a legal commitment to net zero emissions.
The European Union did the same in March 2020.
Since then, Japan and South Korea have joined what, according to UN estimates, are now more than 110 countries that have set a goal of net zero by mid-century.
As the UN explains, net zero means that we are not adding new emissions to the atmosphere. Emissions will continue, but will balance out by absorbing an equivalent amount from the atmosphere.
Countries that have set the goal of reaching net zero represent more than 65% of global emissions, and more than 70% of the world economy, says the UN.
With the election of Joe Biden in America, the world’s largest economy has now rejoined the carbon reduction chorus.
These countries now need to detail how they plan to achieve their new aspirations, which will be a key part of the Glasgow agenda, but the fact that they are already saying they want to get there is a very significant change.
3. The fall in the cost of renewable energy
There’s a good reason so many countries now say they plan to have net zero emissions – the falling cost of renewables is completely changing the calculus of decarbonization.
In October 2020, the International Energy Agency, an intergovernmental organization, concluded that the best solar power schemes now offer “the cheapest source of electricity in history.”
When it comes to building new power plants, renewables are already often cheaper than power generated by fossil fuels in much of the world.
If countries increase their investments in wind, solar and battery power in the coming years, prices are likely to fall further, to a point where it will become profitable to shut down and replace coal and gas power plants.
This is because the cost of renewables follows industry-wide logic: the more you produce, the cheaper it gets , and the cheaper it gets, the more you produce.
This means that activists will not have to pressure investors to do the right thing.
For their part, governments know that by increasing renewables in their own economies, they help accelerate the energy transition globally, by making renewables even cheaper and more competitive everywhere.
4. The pandemic changes everything
The coronavirus pandemic has shaken our sense of being invulnerable and reminded us that our world may be turned upside down in ways we cannot control.
It has also caused the most significant economic upheaval since the Great Depression.
In response, governments are stepping forward with stimulus packages designed to jumpstart their economies.
And the good news is that it has rarely, if ever, been cheaper for governments to make these kinds of investments. All over the world, interest rates are around zero or even negative.
This creates an unprecedented opportunity to do things better this time.
The European Union and the new Joe Biden government in the US have pledged trillions of dollars in green investments to jump-start their economies and start the decarbonization process.
They both say they hope other countries will join them, helping reduce the cost of renewables globally. But they also warn that, along with this carrot, they plan to wield a club: a tax on imports from countries that emit too much carbon.
The idea is that this can help encourage those laggards in reducing carbon, such as Brazil, Russia, Australia and Saudi Arabia, to be encouraged to cut emissions.
The bad news is that, according to the UN, developed countries are spending 50% more on sectors linked to fossil fuels than on low-carbon energy.
5. Business is also going green
The falling cost of renewables and mounting public pressure to act on the climate are also transforming attitudes in business.
There are strong economic reasons for this. Why invest in new oil wells or coal-fired power plants that will become obsolete before they can pay for themselves over their 20-30 year life?
Indeed, why carry carbon risks in your portfolios ?
The logic is already developing in the markets. This year alone, Tesla’s skyrocketing stock price has made it the world’s most valuable auto company.
Meanwhile, the share price of Exxon , which became the world’s most valuable company, fell so much that it was pushed out of the Dow Jones Industrial Average of major US corporations.
At the same time, there is a growing drive to get companies to incorporate climate risk into their financial decision making.
The goal is to make it mandatory for companies and investors to demonstrate that their activities and investments are taking the necessary steps to transition to a world of net zero emissions.
Seventy central banks are already working to make this happen, and integrating these requirements into the global financial architecture will be a key focus for the Glasgow conference.
Everything is still at stake.
So there are good reasons for hope, but it is far from a done deal.
To have a reasonable chance of hitting the 1.5 ° C target, we must cut total emissions in half by the end of 2030 , according to the Intergovernmental Panel on Climate Change, the UN-backed body that compiles the science needed to report the politics.
This would imply achieving the emission reductions that occurred in 2020 each year thanks to the massive confinements due to the pandemic.
Emissions, however, are already returning to the levels they were in 2019.
The truth is that many countries have expressed high ambitions to reduce carbon, but few have implemented strategies to achieve those goals.
The challenge for Glasgow will be to get the nations of the world to adhere to policies that will begin to reduce emissions now.
The UN says it wants to see coal phased out entirely, an end to all fossil fuel subsidies, and a global coalition to reach net zero by 2050.
That remains a very difficult task, even if global sentiments about facing global warming are beginning to change.
