With COP26 fast approaching, Scott Petersen looks at how some countries are more prepared than others for this critical climate conference.
With COP 26 just weeks away, we look forward with anticipation to the prospect of thousands of climate change experts, scientists, politicians, lobby groups and other interested parties, descending on the SEC in Glasgow. I wonder what the carbon cost of all that will be? I’m sure someone will work it out if they haven’t already.
At least Alok Sharma, the UK’s COP26 Minister, can rest easy after missing the bullet in the cabinet reshuffle and will therefore enjoy the honour of being the President at the forthcoming event. Having spent the last seven months flying 200,000 miles to 30 countries to canvas support, it might have been a tad embarrassing had he been shuffled aside at this stage. Nevertheless, his globetrotting antics have drawn criticism from the Green Party and others, who see these actions as excessive and hypocritical. Perhaps, they have a point.
As the host, the UK approaches COP26 in a difficult place. Circumstances are conspiring against us, and we appear to be treading water, perhaps even slipping backwards, in terms of our own progress towards achieving Net Zero. A recent report from the Climate Action Tracker claims that of all the nations involved in the COP26, only Gambia appears to be on track to meet the requirements of the 2015 Paris Agreement on Climate Change. Elsewhere in the world, the likes of Australia, Switzerland, New Zealand, and Russia, have not accelerated their aspirations in any way – submitting similar or less ambitious 2030 targets than they had expressed at Paris in 2015.
If you think that Gambia, as a developing country, has it easy because of its relatively low emissions, think again. Through a proactive effort, Gambia has passed laws that prioritise expanded green energy. In 2013, its Parliament passed the New Renewable Energy Law, which set aside funding for renewable infrastructure, research and development, as well as local equipment production and promotion. It’s doing where other are talking, and the only obstacle Gambia faces that’s preventing it from achieving its goals right now, is unsurprisingly lack of funding.
One area where they have received financial support has delivered remarkable results. With $20.5m from the Green Climate Fund (GCF) grant, together with $5 million from the Government of the Gambia, they have created the “Large-scale Ecosystem-based Adaptation Project in The Gambia” (EbA), designed to rehabilitate up to 10,000 hectares of degraded forest and wildlife parks through reforestation, as well as the restoration of 3,000 hectares of abandoned and marginal agricultural lands.
Back in the UK, our switch to renewables and massive investment in offshore wind is not delivering the same levels of progress. Recent, unfavourable, autumn weather conditions have created a drop in output from renewables (and winter hasn’t even started) which has forced National Grid ESO (NGESO) to call on fossil fuel-based generation to balance the shortfall. In a volatile market, already high gas prices from Europe soared even further, forcing the retrograde step of turning on coal-fired generation from West Burton A power station. It’s all down to the economics of the balancing challenge faced by NGSEO. Coal is cheap and as balancing costs ultimately trickle down to people’s individual fuel bills, the decision is a simple one for NGESO – turn on coal! But how does this policy support our commitments to the Paris Agreement? Answer – it’s doesn’t, it’s completely at odds with net zero objectives.
Then recently to compound things, the fire at National Grid’s IFA interconnector in Kent has taken out a further 1GW of capacity, forcing energy prices even higher.
The important thing to remember is that COP26 isn’t the end point of the global movement to net-zero, but a milestone on the journey. What happens after COP26 is probably more important than what happens at the event itself. After COP26, markets, countries and individual businesses will all be disrupted as the low-carbon transition continues. The pace of change and the level of disruption may however be dictated by the discussions at Glasgow.
So, if we are struggling at a national level, what’s the picture like on the ground? How is British business adapting to the looming climate crisis? Again, the portents are not good. A recent article in the FT highlighted that many major companies are omitting information about critical climate-related risks from their financial statements. A review of 107 global companies in carbon-intensive sectors found that more than 70% did not indicate whether they had considered climate when preparing their 2020 financial statements.
This is a situation that cannot be allowed to continue and indeed, the Government is already increasing the pressure on smaller businesses with the introduction of Streamlined Energy and Carbon Reporting (SECR). SECR will require large unquoted UK companies that have consumed more than 40,000 kilowatt-hours (kWh) of energy in the reporting period to include energy and carbon information within their directors’ (trustees’) report. 40,000kWh is a relatively small amount of electricity, sufficient perhaps for a medium-sized business in the UK, occupying around 12,000 sq. ft. in a two-storey office building and accommodating 50-250 employees.
But measuring and reporting is only the beginning. Businesses need to be taking meaningful action, and the plans and programme they implement need to be based on science-based targets. It’s no good simply saying that your company will be net zero by 2030 without measurability and linking science-based targets to the goals of the Paris Agreement, notably to limit warming to 1.5°C. Yet, figures on the science-based-targets website show that (globally) only 1,809 companies are taking action, 899 have science-based targets and 785 have committed to the 1.5°C reduction. There is a long way to go.
Too many companies are dodging the real carbon-cutting initiatives and going straight to offsetting as a quick and easy solution. One can only hope that the price of carbon will continue to increase at a rate that will make this option ultimately unaffordable. Currently, that price is around $5 per tonne and the investment community is smelling an opportunity. In the last year, Asset Managers including Manulife, Gresham House and JPMorgan have all entered the forestry offsets market trading with organisations looking to offset for their greenhouse gas emissions. It’s already a market worth billions of pounds and covering millions of hectares of forestry and they are waiting eagerly for the price to rise to the expected $50 per tonne by 2030. Aren’t we all?
It will be interesting to see the COP26 conference unfold in November, providing us with a clearer vision of the road to net zero 2050. Apparently, an African country is in the frame for COP27 in a year’s time. Perhaps Gambia should be rewarded with that honour based on its record to date?