Climate Change 2021

Whilst the Coronavirus pandemic has shifted our focus from the potential impacts of Climate Change over the last 12 months, it has certainly exposed us to a heightened sense of vulnerability, particularly in Western culture.  Whilst we begin to look forward to a post-pandemic world in 2021, the hope is that this renewed sense of vulnerability in the developed world can be harnessed to embolden us to tackle the even bigger threat of Climate Change.  Below are 5 strategic reasons as to why we consider 2021 to be a very important year in our bid to control our impact upon Climate Change.

Glasgow 2021

In November of this year, the world will gather in Scotland to determine, with legally binding agreements, how we intend on a country by country basis, to cut our carbon emissions to limit global temperature rises to 1.5C above pre-industrial levels.  Currently, we are due to breach this important ceiling within the next 12 years.  Under the Paris 2015 climate accord, participating countries agreed to review emissions every 5 years.  Glasgow 2021 is therefore a globally significant meeting that must be successful if we are to have any chance of avoiding catastrophic Climate Change within the next 2 decades.

Political Context is Changing

Amongst the darkest days of the pandemic in 2020, an important gesture was presented to the World that gave us hope.  Chinese President, Xi Jinping, announced that China aimed to be Cardon Neutral by 2060.  In a single announcement, the world's largest emitter of carbon dioxide, consented to join the world in decarbonising their economy.

China's announcement came on the back of a string of the world's largest economies and carbon emitters promising legally binding net zero carbon commitments.  In June 2019 the UK committed to a carbon neutral economy by 2045, Scotland went one better by committing to this by 2035!  The EU has committed to net zero carbon by 2050.  To date, more than 65% of global emissions, representing 70% of the world's economies, has committed to being carbon neutral by 2050.

Perhaps most significantly of all, last week, President Joe Biden of the United States of America, confirmed the USA's intention to rejoin the Paris Climate Accord of 2015, undoing the damage of the Trump administration's exit from the agreement in 2016.  In one executive order, President Biden turbo charged the potential for what could be achieved in Glasgow at the end of the year.

Cheap Energy

2021 may be the year considered a tipping point; the year that renewables began to make absolute economic sense.  As wind, solar, hydro and battery technology begins to ramp up, so the cost of installation tumbles through economies of scale and technological advancement.  When it comes to building power stations, renewables are now often cheaper than their fossil fuel equivalents.  According to the US Energy Information Administration, half of electricity will be from renewables by 2050.

As this scales, institutional investors will increasingly push their money to these technologies, divesting from fossil fuels.  Like a fly wheel, the transition will only gather pace.  Already we can see the effects of this in the performance of stocks such as Tesla and the collapse of companies such as Exxon.

Covid-19

The pandemic has given the world economy the greater economic shock since the great depression of the 1930s, greater even than the financial crisis of 2008.  Interest rates have collapsed, industries and businesses are in free fall .  But in every economic crash there is opportunity.  Cheap interest rates are allowing governments to invest heavily in new green opportunities to decarbonise their economies.  This is an unprecedented opportunity for the world to reprioritise with the burden of our fossil fuel economies weighing slightly less.  Due to Covid-19, we have already suffered the financial shock of decarbonising.  Now is the opportunity to invest in our new carbon neutral economy as we move out of recession.

The Business Case

A cornerstone of Glasgow 2021 will be ensuring that the world's financial structure is motivated to invest in a decarbonised economy.  Mandatory action for business and investors to ensure that their activities and investments are making the necessary steps to decarbonise, to reach net zero, is a must.  The stock market is already beginning to show that the investment culture is changing.  In order to ensure the rate of change required is maintained, this must be legally binding in the financial architecture of world markets.  Glasgow 2021 presents our single opportunity for the next 5 years to make this happen.

The Covid-19 global pandemic has at time of writing cost the lives of in excess of 1 million people in a very short period of time.  It has resulted in the greatest financial shock in living memory, including two world wars.  What it has done is bring us closer together as a world community with a shared purpose and vulnerability.  In 2021 we need to harness this shared purpose and sense of community and use the opportunity as we navigate out of this global crisis, to effectively tackle Climate Change, our greatest challenge yet. 

In November, our small country will once again have the eyes of the world community focused upon it.  We as a nation, have always punched above our weight.  Glasgow 2021 is our opportunity to lead once again and ensure that we do all we can to protect our world from the ravages of Climate Change.