Sunday, May 19, 2024
HomeFinanceThe make-or-break decade has begun: climate action must start now

The make-or-break decade has begun: climate action must start now

The make-or-break decade has begun. João Pedro Matos Fernandes, Minister of the Environment of Portugal, which currently holds the Presidency of the Council of the European Union, defined the upcoming years as crucial.

“The present generation is already suffering because of climate change so we need to make some changes to have a better world in the near future,” he said during the online event Investing in Climate Action: The Make-or-Break Decade, organised by Project Syndicate, the European Investment Bank and the European Commission.

The spirit of the Paris agreement still pervades most of the countries, especially in the European Union whose Member States committed to increase the greenhouse gas emissions reduction target by 55 per cent by 2030. And the steps taken between now and 2030 will determine whether we can avert the most devastating effects of climate change in the future.

During the event it was underlined how the climate challenge is demanding determined action and significant investment – going far beyond current levels, especially considering that the costs of not acting will be far greater.

Mauro Petriccione, Director-General for Climate Action at the European Commission reminded that the EU is doing the right thing in terms of transforming the economy. It doesn’t mean there are promises that this strategy will succeed but all the available instruments have been put in place.

Indeed, commitment is not questioned. The question is how to make climate action a reality through concrete policies and without leaving anyone behind, as pointed out by Teresa Czerwińska, Vice President of the European Investment Bank who urged to turn knowledge into tangible actions.

For her, there are two important aspects: on one hand the right financial instruments, like the European Fund for Strategic Investments (EFSI) or the green bonds. On the other hand, financial advisory for all the players engaged in the transition.

Everybody has to cooperate, especially private institutions. Although this trend had already started before the coronavirus pandemic, Oliver Bäte, Chairman of the Board of Management of Allianz noted that there is still a perception that environmentalism is not good for profits.

“The good news is that we have more than 50 per cent of global GDP who has committed to net-zero, what we need now is to have more measurable data so that we can assess the progress of the financial market in real-time,” he said. “The EU Taxonomy is a good instrument but only 2 per cent of top companies are operating according to it. We don’t have time, so let’s make the companies complying with the taxonomy first and let’s invest later. It is not just about innovation: we have to put the money into the brown industry too because it must get investment to transition.”

Christine Lagarde, President of the European Central Bank warned that doing things in a delayed and not organised way could also be negative and the risk to the euro area economy could be substantial.

“The primary responsibility lies in the governments’ hands but it requires support from everybody,” she said. “A true social and environmental carbon pricing must be included in the system and accurate information on exposure and carbon intensity of companies must be presented in a standardised way.”

On a positive note, international cooperation is taking root once again and the European Union is not alone in its aspiration to become the first carbon-neutral continent. John Kerry, United States Special Presidential Envoy for Climate said that it is a good moment for the US after losing credibility and precious time when withdrawing from the Paris agreement.

“it is challenging beyond belief,” he said. “We are told by scientists, not politicians, that we have to reduce a certain amount of emissions within a certain period of time in order to keep alive the prospect of 1.5 degrees and net-zero by 2050. If we do not reduce enough during this decade, all models show that the curve to get to net-zero will be so steep that it won’t be possible to achieve. We cannot wait for a miracle we don’t even know what it is.”

Therefore, it is going to take all of the planet and all of the countries and the 2021 United Nations Climate Change Conference (COP26) is regarded as a key event.

Agreeing with Mr Kerry’s words, Frans Timmermans, Executive Vice President of the European Commission underlined the importance of combining the post-COVID-19 recovery with a green recovery otherwise he is afraid we will miss an opportunity that it might not return.

Mr Timmermans emphasised that the US has to clarify its national contributions while also it’s important to pledge money for adaptation and mitigation in developing countries. Thus, he expressed his hopes that the US will clarify its Nationally Determined Contributions (NDCs) at the summit organised by President Biden on 22 April.

“If we look at what happened in the US under the presidency of Donald Trump we can see that while the administration was supporting fossil projects, in realities cities were decarbonising, States set up emission trading systems and the coal phase-out in fact accelerated,” he said. “We have to make sure that the voice of corporations, cities and other participants are heard so we have to reimagine how politics are done.”

The issue of climate change is a perfect example of this as actions have to be delivered locally, as part of a global movement. The Executive Vice President of the European Commission pointed out that right now we are in a unique situation as in the next couple of years we have this incredible opportunity to invest in our future. However we need to set it in motion now, it is possible as we have the money the technology, what we need is the political will and understanding that this is a global challenge that we have to address now.

Sign up for our newsletters

    Monthly newsletter – Delivering the most important energy stories of the month selected by our Editor-in-chief
    Weekly Oil&Gas roundup - All major news about the oil and gas industry, LNG developments, the upscaling of new gases and related EU regulations arriving in your mailbox every Monday.
    Weekly Renewables&Climate roundup - All major news about investments in renewable energy sources, environment protection, green hydrogen and new innovative ways to tackle the climate crisis arriving in your mailbox every Tuesday.

    Most Popular