The cost of climate (in)action
Last Wednesday, Rishi Sunak, Chancellor of the Exchequer, announced this year’s Autumn Budget, pledging a major increase in public spending amid higher-than-expected economic growth. Amongst the expected reforms: cuts to universal credit, investment in ‘Levelling Up’ policies and a reduction of taxation, there was a curveball that made environmentalists’ hair stand on end: domestic flight taxes would be cut in half.
The move has been dubbed “astonishing” and the WWF has criticised the budget announcement, arguing that it “takes [the UK] headlong in the wrong direction”. The rest of the budget announcement also made little reference to the climate crisis, denting its climate credibility days before COP26. The climate-shaped hole at the budget announcement was glaringly obvious, but what remains to be seen is the impact this will have on the UK’s negotiating power at COP this week.
Just days from COP26, The Science Based Targets initiative launched the world’s first Net-Zero Standard to provide credible and independent assessments of corporate net-zero target setting, enabling companies to align both their near and long-term climate action with a 1.5c warming pathway.
This new tool is a gamechanger for the business world, as companies were previously reliant on self-defining net-zero targets without any evaluation of their ambitions or integrity.
Under the new rules companies are required to commit to reducing direct and Scope 3 emissions by at least 90 % by 2050, and to set science-based goals which cover the next 5-10 years. Beyond the 10-year period, and only once at least 90% of emissions have been cut, are they able to neutralise any residual emissions.
Seven firms from a diverse range of industries have had their net-zero targets certified as part of the SBTi’s pilot scheme. These include: AstraZeneca (UK), CVS Health (US), Dentsu International (UK), Holcim (Switzerland), JLL (US), Ørsted (Denmark), and Wipro (India). More companies are now invited to commit to set net-zero targets, which the SBTi will begin validating from January 2022.
Alberto Carrillo Pineda, Co-Founder and Managing Director of the SBTi, said:
“For the first time, the SBTi Net-Zero Standard offers companies robust certification to demonstrate to consumers, investors and regulators that their net-zero targets are reducing emissions at the pace and scale required to keep global warming to 1.5°C. We’re now inviting all companies with net-zero targets and ambitions to show stakeholders that their decarbonization pathway is aligned with science. And the rest of the business sector – we call on you to join the Race to Zero.”
The current planetary emergency is at a tipping point. The impacts of the climate crisis, biodiversity loss and inequality are being felt across the world, and two years after the first case of Covid-19 was reported, we are still facing the repercussions.
The shared experience of Covid-19 highlighted the global interconnectedness of our societies and systems as supply chains slowed, economies shrunk and our health systems balanced on the brink of collapse. The science became clear: climate, biodiversity and human health are fully interdependent.
Promises of a ‘green recovery’ post Covid-19 were made, but nature has been absent from many of the discussions, despite it playing an essential role in building a resilient future for us all.
CDP’s new five -year strategy considers the important role nature plays in achieving our climate goals. The strategy recognises that the global goal of net carbon neutrality needs to be matched by an equally clear goal of net positivity for nature. This will require eliminating biodiversity loss and prioritising restoration to ensure the transition towards a nature-positive economic system by 2050.
Global leaders have many opportunities to discuss our current state of emergency over the coming months, starting with COP26 next week. As the fragility of our planet and systems continues to be exposed, it is clear it will take a global effort to find a solution to this emergency, and a nature-positive future is a very good place to start.
A coalition of global business groups has called for the creation of an international carbon price strategy at this week’s COP26 summit. The move illustrates the growing interest in, and pressure on, industry to take stronger action on climate change, not least due to concerns about the potential costs of complying with mismatched local policies.
The businesses are advocating for consistent carbon pricing across regions and sectors, which would incentivise all stakeholders to transition towards a low-carbon future; however it is unclear as to whether such an agreement will be reached at COP, since governmental approaches to carbon pricing will differ. It is expected that China, India and the US will oppose interventionist policies, preferring instead domestic initiatives which may hinder progress made.
In contrast, the EU will be willing to take a more aggressive approach, having already extended its own carbon pricing scheme to new sectors within the bloc and made promises to impose a carbon border tax on imported goods. It is possible that a market-based approach may be most appropriate, which the Brussels-based European Round Table for Industry (ERT) is in favour of. Their idea is that focus be placed on incentivisation – motivating industry to reduce their carbon emissions at each stage of their value chain.
As the world’s leaders and eyes descend on Glasgow, another scientific report on climate change delivers ‘another thundering wake-up call’, according to the UN Secretary General, Antonio Guerres.
The report highlights national plans to cut carbon fall very far short of what’s needed, and current pledges will fail to keep the global temperature under 1.5c in this century.
Findings show that the current plans cut greenhouse gas emissions in 2030 by around 7.5% compared to the previous pledges made five years ago. But this is nowhere near enough to keep the 1.5c threshold within sight, and that we require 55% cuts by the same date to keep this target alive.
But there is hope that, if long term net-zero goals are met, temperatures can be significantly reined in. Now is the last chance for countries to step up to the plate and implement ambitious and credible plans before it is too late.