The world is polarised. To expect COP26 to forge global consensus around climate change mitigation is perhaps a chimera. The world needs to find another avenue—one that draws on the power of global society whose members are conjoined by the interests of humanity
Spend a few days in Europe and one cannot help but be struck by the change in the tenor of the discussion on global warming. It is no longer about the credibility of the scientific data regards the trajectory of global temperatures—whether the data does no more than generate a lot of hot air as people like US President Donald Trump would aver, or whether it is indeed a harbinger of an existential crisis? That debate has been settled. The consensus view is that the world is on a pathway towards disaster. The discussion is now all about what must be done, by whom and by when? It is about the steps that must taken by firms, sectors, governments to reduce carbon emissions; the mix of regulations and incentives that must be put in place to hasten the transition towards a decarbonised future; the tests that entities must pass to counter the charge of ‘greenwashing’. It is about tackling an immediate threat not about an unfolding crisis with indeterminate future implications.
What is missing in this Eurocentric debate are the big questions.
Will these efforts by the developed world be sufficient to alter the trajectory of global warming? Who will pay the costs of ‘sustainable development’ of poorer nations? Does the current UN-led multilateral effort offer any prospect of a consensus around an appropriate and urgent global action plan?
The movement towards decarbonisation in the West has built up a strong momentum. There are tangible markers.
The most impactful is technology and innovation. Together, they have almost bridged the ‘competitiveness gap’ between the current fossil-fuel-dominant energy system and a renewable and ‘clean’ energy alternative. Many reports provide supportive data of this trend. Let me cite the data from one, by Bloomberg. The global average levelised cost of electricity generated from solar (PV) per megawatt-hour has fallen from approximately $360 in 2010 to around $60 in 2019. The cost of electricity from offshore wind has reduced from $190 to around $90 over the same period, and for onshore wind from $100 to just under half at $50. The cost of storage has also reduced comparably. A lithium-ion battery cost approximately $1,000 per kilowatt of storage in 2010. These costs fell to around $380 by 2015, and last year they averaged $180. Bloomberg’s forecast assumption is that costs will fall to $100 by 2024 and around $30 by 2030. The message is clear. There will be many obstacles to the creation of a non-fossil-fuel, clean energy system. But competitiveness will not be one of them. Technology will overcome that obstacle.
The second marker is the conspicuous shift in the ‘decarbonisation’ strategies of companies and financial institutions. All of these entities have, for long, affirmed their green credentials, but few have provided details of their strategies, the time frame and how precisely they plan to achieve their ‘clean energy’ targets. Now, they are filling in these gaps. BP has announced, for instance, that it will achieve net zero carbon emissions across all of its operations by 2050; Shell has said it will become a major electricity company and it has invested in solar, battery manufacturing and charging solutions for electric vehicles; Goldman Sachs has stated it will not finance any new coal power plants unless these plants have incorporated carbon emission reduction technologies; AXA, the insurance giant, has indicated it will not insure new coal construction. These are just a few examples of the paradigmatic shift that has taken place in the corporate and the financial world.
The third marker is the mix of regulatory, pricing and fiscal measures that western governments have put in place to contain the growth of fossil fuels in the energy mix; incentivise investment in technologies like carbon capture and sequestration and, in general, reduce the per capita stock of greenhouse gas emissions.
Together, these are heartening and necessary developments, but they are not sufficient to move the world off the ‘global warming’ treadmill. This is because two-thirds of global carbon emissions come from emerging economies, particularly China and India, and, whilst these countries have made tremendous strides down the pathway of decarbonisation, they are still not moving fast enough. And for good reason. They are impeded by the trilemma of, on one hand, generating growth, and on the other providing their citizens access to affordable energy, and protecting the environment. The global challenge is to help them resolve this trilemma and accelerate the pace of decarbonisation.
The question is, can this challenge be met through the current UN-led multilateral effort? Or is this an illusory expectation? The world is fractured and polarised by resurgent nationalisms and hardened boundaries. To expect, therefore, the COP26—to be held in Glasgow in November this year—to forge an international consensus around a climate change mitigation and action plan that results in the developed world making good on their financial commitments (the sine qua non for resolving the above trilemma) is indeed perhaps a chimera. The world needs to find another avenue—one that does not take off from the current international system, but draws on the power of global society whose members are conjoined by the interests of humanity. It has to be an avenue that leads towards ‘new sovereigns’ defined not by conventional post-Second World War national and political boundaries, but by planetary identities forged on the back of a common objective to tackle cross-border issues like global warming and/or health pandemics.
This may sound too idealistic. But then who would have expected the singular efforts of Greta Thunberg, the 17-year-old Swedish schoolgirl who skipped classes every Friday to sit in front of the Swedish Parliament week after week to attract not just the attention of Swedish parliamentarians but that of the world. She offers an example of what is possible if the society deems that ‘enough is enough’ of ‘politics as usual’. The world is headed over the cliff. There is much to be done, but a crucial next step is to integrate the developing world more firmly into the search for a global response. This requires the society to pressurise the developed world to help finance the sustainable development of the developing world.
The author is chairman & senior fellow, Brookings India