December 18, 2019
As we enter the decisive decade of the 2020s—when significant steps towards decarbonization have to happen if we are to stave off the worst impacts of climate change—the 2019 UN climate conference in Madrid, COP25, was a poor jumping-off point.
This year’s COP was designed to pave the way for greater ambition on the part of national governments. Unfortunately, they failed to live up to the importance of the moment. In advance of the climate conference, the UN Environment Programme’s Emissions Gap report called for annual emissions reductions of 7.6 percent if the world is to keep global heating to 1.5°C. Measured against that benchmark, the last COP of the 2010s represents a serious setback.
There were multiple disappointments in Madrid. There was no agreement on alignment of carbon market rules, which would provide guidelines on how countries can trade emissions internationally. Also, countries did not prioritize the ground rules that would protect vulnerable nations after a climate disaster.
Even the aspirational language emerging from the negotiations took a step backwards from the more concrete commitments to heightened ambition in the run-up to next year’s pivotal COP26, when the “ratchet” of national contributions is intended to happen. And while 121 nations have committed to net-zero emissions, this is less significant in terms of impact: these countries represent only 15 percent of global emissions.
There is little doubt that this reflects, in part, the absence of American leadership under the current administration in Washington. While American business and investors were visible and there was political representation from a climate-friendly delegation of congressmembers, state governors, and mayors, they are not able to shift national government commitments. While the We Are Still In coalition remains vibrant and important, it cannot make up for the loss of climate diplomacy from the White House. And with the exception of the European Union, other major emitting nations did not step up either.
But while this was clearly a COP where national governments did not seize the day, there were still some glimmers of hope.
Because while national government action matters—a lot—it is far from the only pathway to progress. And in many other areas, COP showed important steps forward. Many businesses, reflecting what is known in the hallways of the climate talks as “the real economy,” continue to make new commitments. Nearly 800 companies are now committed to net-zero emissions by mid-century.
Many businesses, reflecting what is known in the hallways of the climate talks as “the real economy,” continue to make new commitments.
While many heavy-emitting industries remain on the sidelines, there are some interesting new commitments. For example, Spanish oil and gas producer Repsol made its COP host country proud by announcing the first net-zero commitment in that sector to include Scope 3 emissions. More broadly, the number of companies joining the UN Global Compact’s Climate Ambition Coalition, committing to a 1.5°C target has doubled since September, expanding to 177 companies representing US$2.8 trillion in market capitalization. Goldman Sachs and AXA have both announced new divestment strategies.
In addition to action by businesses and investors, public demand for climate action continues to be heard. Coinciding with COP, Time named Greta Thunberg the Person of the Year for 2019, and “climate emergency” was named the word of the year by Oxford Dictionaries. It is clear public expectations about climate action are stronger than ever and growing.
What does this mean for business? Looking ahead to 2020, business has both the interest and the opportunity to continue to raise its ambition. Companies can act by joining the growing parade of businesses committed to 100 percent renewable energy in service of augmented science-based targets and aligning their business strategies with the 1.5°C target.
Companies also can enable progress by working with their supply chains as the number of businesses seeking deep Scope 3 emissions cuts continues to grow. And finally, business should leverage its influence by calling on governments to drop the timidity that was—unfortunately—on display in Madrid. A loud business voice was vital in the run-up to the Paris Agreement in 2015, and it will be essential to delivering the strong result that will be badly needed at COP26 next November in Glasgow.
The need for heightened urgency is coming from the science, the streets, and the employees of global companies. 2020 must be a year when the promise of Paris is given new life in Glasgow. With business engagement in the year ahead, we can redefine Madrid as a footnote in history, rather than lasting damage to climate ambition.
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