10 Sep 2018
Ambitious targets, large-scale innovation and a focus from government, business and civil society on a coherent policy framework are three must-haves if the world is a chance to keep global warming to below 2 degrees celsius.
These are the key takeaways from September’s Global Climate Action Summit (GCAS) in San Francisco – a summit designed to lift momentum behind the global response to climate change ahead of COP24 in Katowice, Poland.
"It was hard not to be come away from the summit in some way optimistic.”
While the enormous challenges of delivering against Paris were the top of mind for all attendees it was hard not to be come away from the summit in some way optimistic - in large part due to the relentless optimism of the US hosts.
The summit brought together business, investors and civil society to showcase climate action around the world across five areas - energy systems, inclusive economic growth, sustainable communities, land and ocean stewardship and climate investment.
The mobilisation of finance at scale cut across almost all major themes at the summit. In particular the setting of science-based targets and the development of mechanisms to trade and price carbon were seen by participants as the key way to ensure investment certainty which would allow governments and businesses to plan, innovate and position for the transition.
A call to action released by the GCAS at the conclusion of the event boasted of over 500 public commitments made at the event in the interest of reducing emissions.
A combined 100 regional government and business leaders and committed to emission and temperature targets outlined in the Paris agreement, while a reported 488 businesses have committed to science-based targets.
Over 60 leaders committed to a 100 per cent zero emissions target in relation to transportation. Another 38 reportedly committed to zero emission targets around building and construction.
Almost 400 investors with $A32 trillion in funds under management committed to a low-carbon transformation.
Attendees heard repeatedly from stakeholders across diverse economic and political persuasions about the need to raise the level of ambition through more aggressive emissions reduction targets. Now obviously this is a gathering already committed to a course of action but equally the stakeholder realms they represent is growing.
Representatives from both sides of US politics spoke about a tax on carbon as being the most-efficient and transparent way to drive change.
Critically, it was noted in order for a tax of this nature to be truly effective, the distribution of proceeds had to be equitable. This is an important recognition that climate change will impact the poorest the first, hardest and longest.
Innovation will be critical in helping to underpin the level of investment needed to help more exposed/vulnerable communities invest in resilient infrastructure and adapt to a lower carbon economy.
The choice of San Francisco as the host city for the Summit was no accident. As a global innovation powerhouse nestled in northern California – the state with the largest economy in the US and overall fifth-largest economy in the world – it was an apt setting for many to come together ahead of COP24 to hear about how the world could set about reducing emissions to net zero by 2050.
Fittingly, it was during the summit California Governor Jerry Brown signed a bill establishing a legal target of zero emissions for the state’s electricity system by 2045 - and in a completely unexpected move, signed an executive order setting a target of zero emissions by 2045 for the entire California economy.
While it is not clear how this goal will be met – or at what cost - it is clear California over the last two decades has proven itself more than capable of meeting or exceeding its targets through the adoption of both innovative technology and public policy solutions. There will be winners and losers of course.
California started setting climate goals during the administration of then-governor Arnold Schwarzenegger and it has generally met or exceeded them.
The state’s emissions have already fallen below 1990 levels, at the same time emissions throughout the US have also begun to fall. The year 2017 marked the country’s lowest level of carbon emissions in 25 years. Again, there are particular circumstances and in the US the development of coal seam gas and better energy efficiency have been major contributors.
The role of innovation –technological, economic and financial - in helping achieve global net zero emissions was also a theme of much discussion at the summit.
In the case of California, the state already gets more than half its power from sources that do not emit carbon (making its target of an 100 per cent emissions free energy system by 2045 seem not insurmountable), sales of electric cars continue to grow exponentially. Additionally the state has one of the world’s most stringent building codes.
China had one of (if not the) largest delegations of any country at the summit. The transformative role technology is playing in helping China meet its efficiency targets and growing energy needs - including through massive investment in renewables - was not lost on the 4000 or so delegates – although clearly much more is needed.
Paul Orton is Head of Project & Export Finance, Institutional Banking at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
10 Sep 2018
23 Nov 2017