In 2016, after decades of painstaking work to deliver environmental progress based on government and corporate cooperation, we saw important political shifts in the world. The shocks of Brexit and the US election are the most visible part of this, but the signs are more widespread than the rise of populism, driven by stagnant wages and deep divisions among society.
I have felt the dismay in those who worked so hard to deliver the Paris Agreement, and their sense of concern that in this newly shaped environment we will fall back. We all knew in 2015 that we were setting a course and a destination, but that the speed of the shift was going to have to be iterative, with increasing cycles of ambition.
The fear is that this will now become a weak point, and that the ambition will not materialize. That would be highly dangerous; missing a target on climate and potentially unleashing natural feedback loops from which we may not recover is not that much better than never having set one at all.
I hear these concerns, and I understand them, but I myself take a different view.
There are three parts to my response.
The falling cost of renewables
First, we should remember that the Paris Agreement resulted in large extent from a deep shift in the underlying economics of our society. In recent years we have seen dramatic drops in the cost of renewable energy, to the point that solar is now the cheapest form of new energy, and the world record for unsubsidised power from solar is now below $30 per megawatt hour.
This makes renewables strong enough to permanently disrupt the monopoly of fossil fuel based energy around the world and indeed, fully half of the investment in new energy in 2015 went into renewables. That progress is being mirrored in the development of battery storage capacity, and is set to radically transform the world’s transportation sector, which currently accounts for over 50% of fossil fuel use. This is part of a long-term trend that is still unfolding as further breakthroughs in technology continue to bring prices down and capacity up.
Further, even the economics of resource exploitation are changing; in December 2016 the winning bid for a potential sea-floor development for a US offshore wind farm provided the US federal government over double what it got for new oil leases in the Gulf of Mexico earlier in the year.
Of course, a country could provide massive public subsidy for coal to try to protect the industry from the underlying economic trends, while simultaneously removing support for renewables and we may well see that, but the result of such an approach is questionable. Ultimately, a country cannot withstand the global shift forever, in particular with the state of public finances and the need to provide wage growth and jobs, any country that resists this trajectory also relinquishes potential competitive advantage in the new marketplace and in the long run, will only damage itself.
All on the same team
Second, there is overwhelming evidence now that people everywhere want their elected leaders to provide them with a safe and stable environment, including limiting climate change. Those who voted for populist candidates last year, and may do so again in 2017, are not voting for polluted air and health risks for their children. On 8 November, 2016, US citizens voted for more than $200 billion in local measures, funded by their own local tax dollars, to improve quality of life and reduce carbon pollution.
Ultimately we must understand that averting climate change is not part of the partisan debate. We are all united in wanting to live in a safe, stable environment and to provide our families with good jobs that will serve the economy of tomorrow. There is no us vs them when it comes to delivering a low-carbon future. Paris was achieved for everyone, and we must not let that fall from our minds or allow ourselves to be drawn into narratives of political divide.
Thirdly, leadership on climate change is proving to be remarkably resilient, even in this mixed up year, and it is evident and building from all sectors of society. For example:
National leaders are meeting potential setbacks with ambition, such as the 47 developing countries that upped their climate change plans to go to 100% renewable energy, well beyond what their NDC’s lay out, a week after the US election. The Indian government then forecast that India will exceed the renewable energy targets it set in Paris by nearly half, three years ahead of schedule. India predicts that 57% of its total electricity capacity will come from non-fossil fuel sources by 2027. The Paris Agreement target was 40% by 2030.
States and cities are continuing to lead the way. One hundred and sixty five states and regions in 33 countries representing one billion people and $25 trillion in GDP (35% of total GDP), have committed to transforming their economies to stay under the 2°C limit as part of the Under2MOU. The C40 cities, in which 1 in 12 people worldwide live, have adopted 2020 as the deadline to turn the corner on their emissions as part of plans to ensure their cities remain competitive, attractive and resilient. This leadership at the city level will deepen and grow with the announcement of the Global Covenant of Mayors as a merger of the Global Compact and the EU Covenant of Mayors, and will begin a period of significant expansion later this year.
The private sector is also not slowing down. Close to 90 multi-national companies have committed to using 100% renewable energy, creating incentive and demand for further progress. Further, and very importantly, over 200 businesses have set science-based targets to reduce their greenhouse gas emissions in a manner that is sufficient given the scale of the challenge. We are even seeing high emitting industries such as the aviation industry begin to challenge themselves with limits on emissions.
Financial institutions already recognize the risk to their clients and beneficiaries of not participating in the transition to the low carbon economy. In October 2016 Société Générale joined the ranks of financial institutions that have committed to no longer finance new coal-fired power plant projects, and align their financing and investments with a 2°C climate pathway.
The fossil fuel divestment movement just passed the $5 trillion threshold across 688 institutions in 76 countries, and in the US alone, sustainable, responsible and impact investing assets have grown by 33% in just two years to $8.72 trillion.
Importantly, the financial industry is also moving forward with recommendations laid out by the Task Force for Climate-Related Financial Disclosure that should be adopted by the G20 in June. The recommendations will drive better accountability and transparency and ensure that business plans are stress-tested against the 2°C target.
These steps alone are not enough to achieve the Paris goals, but they are vital signals of intent, and show us what is possible with a strong vision and commitment. The benefits are already being felt in a steady increase in secure, long-term renewable-related jobs and reduced carbon pollution.
As the groundswell of momentum towards the Paris Agreement rose in 2015, global carbon intensity fell by a record-breaking 2.8%, and many emerging economies saw big reductions in their coal consumption.
At the same time global GDP grew 3.1%. That was the third year in a row that we glimpsed a world that has decoupled economic growth from greenhouse gas emissions.
Our ability to solve the challenge of climate change, which is also a challenge of energy, food security, immigration, health and fair economic growth, especially for the world’s most vulnerable people, is very strong. We must remain optimistic and realistic, pragmatic and visionary. We need to work together in radical collaboration, reaching out across the divides that have grown within our societies.
The next five years will make the difference, and this incredible opportunity demands immediate and urgent responsive leadership from us all. Despite the hurdles we have faced and will continue to face, the overlaying imperatives for achieving a long-term climate-safe world are on everyone’s side. I urge everyone to raise ambition so that we can go further, faster together.