In just over two weeks, more than 100 world leaders will gather in the Scottish industrial city of Glasgow for the UN climate talks called COP26. Their task is no less to determine the fate of our planet.
This characterization may sound dramatic. After all, the UN climate negotiations are held every year, and these are usually fairly stable matters. But next month’s COP26 summit is undoubtedly very important.
In the landmark of the Paris Agreement in 2015, each nation promised to increase its promises of emission reduction every five years. We have reached that deadline – in fact, a one-year delay due to the COVID pandemic means that six years have passed.
This five-year requirement provided a framework for countries to achieve zero-zero emissions in the global economy by the middle of the century. The Glasgow summit is the first real stress test if the world can reach that goal.
Global megatrend towards a clean economy
The Paris Agreement was the world’s first truly global treaty to reduce greenhouse gas emissions. It set a common goal for countries to limit global warming to 1.5 ℃ above the long-term average.
The agreement has been signed and ratified by 191 of the world’s 195 countries, giving it an almost universal legitimacy.
But the actual emission-reducing commitments that countries brought to Paris, known as “nationally determined subsidies”, left the world against 3 ℃ heating this century. This result would be catastrophic for ecosystems and human societies.
Therefore, every five years, countries must make progressively stronger commitments to reduce emissions.
The years since the Paris summit have seen a dramatic change towards climate action. Today, countries that represent more than two-thirds of the global economy has set a fixed date for achieving net zero emissions.
More importantly, many jurisdictions – including the United States, the United Kingdom, the European Union, Japan and Canada – have significantly strengthened their 2030 targets. This is a powerful market signal that drives a global redistribution of private and public investment from fossil fuels to clean energy solutions.
What’s at stake in Glasgow?
While the world is moving fast, there is still a crucial gap between current promises and the goals of the Paris Agreement. Glasgow is seen as the last chance to close that gap and keep the 1.5 ℃ goal within reach.
Without stronger national commitments, we risk crossing irrevocables. “tipping points“In the Earth’s climate system, which locks in uncontrollable global warming.
The Australian government has stepped down to announce net zero emissions by 2050. But such a commitment will not be seen as particularly useful in Glasgow.
In fact, such announcements are just the entrance ticket to the summit. Discussions have continued to ensure much deeper cuts during this decade.
With the exception of Australia, almost all advanced economies have set new targets for 2030 to reduce carbon dioxide pollution. In 2030, Britain’s summit is host country, plans to reduce emissions by 68% below 1990 levels. Meanwhile, the United States will cut emissions by 50-52% below 2005 levels.
The G7 countries have announced that they will do so collectively bisect emissions by 2030. There are clear expectations that Australia will follow suit.
Australia is currently planning to take to Glasgow the same 2030 target it took to Paris six years ago – a 26-28% reduction by 2030, from 2005 levels. It has Prime Minister Scott Morrison hinted he will take an upgraded 2030 projection (rather than target), but this villain will not pass the pattern.
The Paris Agreement is about goals, and countries are necessary to set new goals that represent “the highest possible ambition”. If forecasts indicate that we will exceed our target, a new target for 2030 is clearly needed.
Global diplomatic pressure drives a sea change in Australia’s climate policy. Just this month, the Business Council of Australia backed cuts to emissions by 46-50% by 2030. The Murdoch press has thrown its weight behind zero emissions. Many conservative citizens of the Riksdag also seem to have lost opposition to a net zero target.
There is also a nascent recognition within the Morrison government that the global energy transition is ongoing, and it will significantly increase Australia’s economy.
Thrives in a zero-zero world
Australia’s economy is shaped by trends in the global market. The international car market is rapidly shifting to electric vehicles. And around the world it is wind and solar energy now cheaper than coal and gas.
Our export markets are also changing. When growing economies in Asia meet their climate goals, they will no longer want to buy coal and gas. Instead, they want renewable energy, delivered directly via submarine cable or stored as renewable hydrogen.
Such nations will still want Australian iron ore. But more and more they will want to ”green steel“Made with hydrogen instead of coking coal.
Global demand for batteries, electric vehicles and renewable energy technologies will drive Australian exports of critical minerals – including lithium, cobalt and rare earths. Globally, these minerals will be value $ 17.6 trillion over the next two decades.
With the right policy settings, Australia can grow a pure export mix value $ 333 billion annually, nearly tripling the value of existing fossil fuel exports.
Getting to zero-zero could also create 672,000 jobs and generate $ 2.1 trillion in economic activity by the middle of the century.
Engagement in Glasgow will trigger a global competition against net-zero. But it is not a race we should be afraid of. If we embrace the transition, Australia will prosper. It’s time to get started – we have a world to win.