The way to Glasgow
Written by Enrique Lendo, Business Development Mexico Advisor.
Twenty-twenty marked the beginning in the way to Glasgow, city in the United Kingdom that will host the United Nations Climate Conference in 2021, also known as the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 26). The Conference was originally scheduled for late 2020 but, due to the COVID-19 pandemic, was postponed until November 2021. The main goal of COP26 is to reach a universal commitment towards “Net Zero” emissions by midcentury.
The way to Glasgow began early in January with an unprecedented leadership from the private sector, which advanced hurriedly towards decarbonization. The World Economic Forum ranked climate change and environmental risk at top of its tables, while BlackRock announced it will stop funding fossil fuel investments. In August, British Petroleum presented its carbon neutrality strategy and ExxonMobil was expelled from the Dow Jones due to its loss of value. City Group announced a $250 billion-dollar green fund and Morgan Stanley disclosed for the first time the carbon footprint of its products. By December, 1,500 companies, with a combined value of $11 trillion dollars, and 30% of the oil industry had committed to Net Zero targets.
Subnational governments and citizens also hasted the pace to join the way to Glasgow. In July, Tamaulipas became the first subnational government in Mexico to put a price on carbon as California committed to banning gasoline vehicles by 2035. In November, the citizens of the United States elected a president who has set the fight against climate change as national priority. By the end of the year, 950 cities and provinces around the world had committed to carbon neutrality, and 74 % of US voters perceived climate change as an important issue to determine their decisions.
National governments arrived late to this race, but they will very likely set the stage in 2021. In September, China surprised the world with its Net Zero target before 2060, followed by Japan and South Korea with similar targets by 2050. In December, the UK and France convened a summit to celebrate the 5th anniversary of the Paris Agreement. By then, 110 countries had announced their intentions to set Net Zero targets by 2050. The US, Mexico and Brazil were not allowed to talk at the summit due to lack of commitment. However, that same day, Joe Biden announced the US will rejoin the Paris Agreement the first day of his administration and he will host his own climate summit in the first 100 days.
With the upcoming commitment form the US, 65% of global emissions will be carbon neutral by midcentury. Russia, India, Indonesia, Brazil and other large emitters will have to be dealt with in order to reach the goal set for Glasgow. Their commitment will depend on convincing them that environmental degradation does not constitute a political agenda but a demonstrated fact with increasing human and physical impacts. In 2021, there will be more floods like the one in Tabasco and more wildfires like the ones in California, and another $ 1.5 billion dollars’ worth of climate related impacts worldwide pushing the risk further up in capital markets.
The good news is that these markets are already responding by punishing dirty investments. In 2021, for the first time in history, investments in clean energy will overtake these of fossil fuels and by 2024 there will be more renewable energy installed capacity. Post-COVID economic recovery provides us with the opportunity to build back better, meet the Paris Agreement targets, propel investment, and create millions of new jobs.
In 2021, the way to Glasgow will continue. Committed countries will increase the pressure on polluting countries through diplomacy and trade sanctions. Capital markets will further decarbonize their portfolios. Citizen will demand politicians to enhance their commitment and subnational governments will reinforce their leadership.
what will you do in the way to Glasgow?
Article originally published in Reforma news paper