What are the prospects for the commitments of countries after the CPC26? Let’s get to know.
Due to the active interest of the participants in the COP26, there is a sense of risk this year – something must happen soon with business and our homes. But there is a second feeling – of opportunities.
There are literally only a few people in each country capable of conducting climate negotiations at the COP26 level. This is one of the most challenging topics for humanity because the mediator at such meetings must be a lawyer and know technology, politics, geopolitics, energy, environmental issues. That is, you have to understand many interdisciplinary things. And climate change is a multidisciplinary issue.
The first important topic is the climate neutrality of business. We are already used to the concept of “climate neutrality” at the national level. Companies that declare such neutrality are developing their own decarbonization plans. Thus, they give up direct sources of CO2 and equivalents of this gas or switch to green or low-carbon energy. Or abandon their existing fossil fuel business models altogether.
When the state approves a nationally determined contribution, the business also declares carbon neutrality. This applies to reporting and environmental social governance.
For example, let’s mention the story that told me Oleksiy Ryabchyn, a Ukrainian politician and scientist. One of the shareholders of Royal Dutch Shell sued the company for lack of climate ambition, for insufficient plans to allocate finances for carbon neutrality. He won the lawsuit against the company. As a result, when the court ordered the company to be more ambitious, Shell moved to the UK, changing its jurisdiction. It paid taxes in the Netherlands before. So, there are very interesting processes.
The second topic is finance. The largest financial institutions, global banks, or asset management companies are becoming “green” funds and banks. These banks are the managers of the climate money that will come to the countries after the COP26. They have criteria, the taxonomy of how and for what purposes money will be transferred. The rules are very tough, and COP26 pledges are literally pushing the business out of fossil fuels.
Coal has already lost in the fight; the next will be oil and its projects. Gas is still being financed, but an increase in gas production is already difficult to finance. You may still obtain money for improving gas production.
It is essential for a business that finances go in the “green” direction.
The third thing that follows from the first two is Article 6 of the Climate Agreement. If it will use the program of energy efficiency of methane and other, the business is capable of involving a certain financing. We need to think about this now. The rules are not entirely clear yet, but international organizations will make the rules public while projects are being developed.
The fourth thesis is about climate governance architecture. It concerns personnel. In the coming years, government and business institutions will need talented people who will consider changing the economy for carbon neutrality.
Fifth, investing in energy efficiency is profitable for businesses and the state. For business, it is competitiveness: hydrogen projects, carbon projects, methane emissions reduction, green energy.
We are on the verge of substantial economic changes in the next decade. And it is essential for businesses around the world to be at the forefront of “carbon neutral.” Finally, after thirty years of struggle by scientists and activists to introduce climate change into the political agenda, it is becoming a top issue in business circles. And there is hope for the planet.
Why is it more vital for us to pay attention to what kind of agreement was reached in Glasgow by world politicians rather than the fact that these politicians flew uneconomically? Read the answer in our author’s column here.