Distinguished panel convenes for the latest episode of CERAWeek Conversations – available at https://ondemand.ceraweek.com/cwc
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Bridging economic gaps widened by the COVID-19 pandemic; U.S.-China cooperation amid heightened tensions and leaders able and willing to listen to what is rising up from the grassroots are among the conditions for success at the upcoming United Nations Climate Change Conference (COP26) in Glasgow, a distinguished panel of experts says in the latest episode of CERAWeek Conversations.
Heading into the November meeting in Glasgow, countries that comprise nearly 75% of global emissions and 80% of global GDP have committed to net zero. Yet this week’s report by the Intergovernmental Panel on Climate Change (IPCC) sounds a dire warning: emissions are still rising, and the Paris accord climate targets are not on track to be met. The world is at inflection point on how it aligns climate action with climate aspirations.
In an exclusive conversation with Amb. Carlos Pascual, senior vice president, global energy, IHS Markit (NYSE: INFO) a former U.S. Secretary of Energy, the lead French diplomat to the 2015 Paris Agreement and the former head of the California Air Resources Board outline what COP26 must deliver.
“Many countries are looking at COP26 as the foundational point that will help translate those aspirations into action,” Pascual said. “CERAWeek Conversations provides inside knowledge on energy, climate, technology and policy. We are going to combine all of these looking at the prospects for success at COP26.”
Mary D. Nichols, distinguished visiting fellow, Columbia University Center on Global Energy Policy
Ernest Moniz, president and CEO, Energy Futures Initiative
- Laurence Tubiana, CEO, European Climate Foundation
The complete video is available at: https://ondemand.ceraweek.com/cwc
Interview Recorded Thursday, August 5, 2021
(Edited slightly for brevity only)
- On the scale of net zero ambitions and criteria for success at COP26:
Ernest Moniz: “I take the starting gun to be in many ways 1992 in Rio [de Janeiro]. With the net zero 2050 focus we are actually at the midway point—29 years behind us and 29 years ahead to mid-century. Frankly, the elephant in the room is that we have not made nearly enough progress in the first 29 years to put us in good shape for reaching something like net zero. While a process was put in place for ambition, it really is kicked to Glasgow to put that ambition forward in the context of net zero going forward. The NDCs are critical. In the U.S. we have our own more ambitious NDC. It is extremely difficult to reach those 2030 goals. We can’t do it unless we come out really hard. It’s going to be tough. But I do think that there are elements of bipartisanship—the infrastructure bill, the innovation agenda—but still a tough road [ahead] in terms of some of the critical policy issues like carbon pricing.”
Laurence Tubiana: “What is really good is that the progress on the long-term target is there. COP26 has to capitalize on the short-term actions consistent with the net zero goals that more than 115 countries have adopted and with an element of credibility. On one side, the success of COP26 is [more ambitious 2030 targets] and [for] 2050 a pathway for how to get there. On the other side, understanding that more than five years after Paris the impacts of climate change are more clear than ever. So, we need to have a financial package that supports the losses and damages that climate change is really [causing] already. These are the two elements: credibility across the board, speaking the truth to everybody [about] short and long-term ambitions; and understanding that the impact of climate change is not for the future. It’s now and there are financial consequences to that.”
- On the role of subnational actors and private industry in the climate agenda:
Mary Nichols: “The light that continued to shine [after COP21 in Paris] and the progress that has been made on the technology front to move that agenda has been rising up from states within the U.S. representing more than half of our population which have either comprehensive or partial climate policies of their own as well as from many other parts of the world. Those communications have continued and have been enormously strengthened in the last few years by the increasing drumbeat of demand for action coming from the private sector, not just a handful of major global players but much larger numbers of companies adopting pledges. It doesn’t mean that it will happen, and in fact there is an interesting dilemma around trying to help companies figure out how to even measure net zero. [But] that gives us a tremendous opening to work with new partners. The table is set for a very successful COP if the leaders there are able and willing to listen to what’s rising up from their grassroots.”
- On U.S.-China relations, international partnerships and environmental justice in the global climate agenda:
Ernest Moniz: “China and the U.S. reaching some form of condominium on climate despite the obvious extreme geopolitical tensions that have developed in the last six years since Paris are critical. In the net zero context it’s encouraging that China also put forward net zero even if it’s somewhat beyond mid-century. That reflects the reality that not all countries at different levels of economic development are going to be able to meet a mid-century target.”
Mary Nichols: “At this point there’s still a very fragile enthusiasm for the U.S. being back into global discussions and commitments. One of the things that has led to is the increasing importance of Europe’s role. In California we have a lot of interactions with China both at the national and the subnational level. I’m part of an institute that’s jointly-led between the University of California and Tsinghua University. We have very regular discussions with them. You can see that they are looking more than they ever were before towards Europe as a source of political strength to keep the climate work going so that we have [more of] a triangle than a bipartisan interaction. It offers even more opportunities to deploy and to learn from each other’s actions.”
Laurence Tubiana: “The lack of [global] solidarity around the vaccine issue is emphasizing the divergencies that exist [between rich and poor nations]. We are faced with an increased divergence after a moment where inequality between countries was narrowing. That’s not the case anymore because of the pandemic crisis. These are objective elements that make bridging the gap between perceptions, the future and expectations. It’s now more difficult than it was in 2015 when we had a more positive economic context and a lot of capacity to outreach to many developing countries to prevent this divide from happening. China’s decision will be key to that even balance. If China decided to go ahead with a more ambitious commitment, that will play in the vision that everyone has to go forward and that it is a common threat [for which we need] to have common responsibilities, even in a very tense geopolitical context. The divide exists because of the vaccine crisis, because of the lack of finance, because of economic divergencies and that is a very big challenge and a big responsibility in particular for G7 countries; but not only for them because as we know most of the debt is owned by [China].”
“The repressiveness of the policies we are implementing will make this a make-or-break beyond whatever engagement targets [are set] and COP [agreements]. We have to really put social issues and environmental justice at the core of any action if we want any action to be implemented and developed.”
“The idea that there is a triangle which is absolutely crucial for shifting the global economy to net zero--the convergence of policy instruments, decisions on financial regulations and all that will happen in China, the U.S. and Europe—that will determine the future. It’s so important that we work on the convergence of them, whatever form it takes. Beyond the geopolitical tensions, there are norms that aim at the same target which is deeply decarbonizing the economy in this timeframe.”
Ernest Moniz: “At neither the national nor the international level are we sufficiently focused on [environmental justice]. Ambition of the type that we want is going to require much more attention to our policies being progressive and not having the poor bear a much bigger burden than they can take on.”
“This issue of environmental justice is just one dimension of enormous political coalitions we need to put together if we’re going to be able to move together at a fast clip. There are unfortunately a number of voices who try to narrow the debate and narrow the solutions and fragment coalitions rather than building them.”
- On the policy, regulatory and investment landscape to achieve net zero goals:
Ernest Moniz: “Right now there is an enormous premium on the public sector enabling the private sector to make those investments with a reasonable prospect of stable policy. We certainly cannot argue that we have a stable view ahead in terms of where policy is going. Certainly, in the U.S., the partisanship is one clear example. The public-private partnerships, establishing the rules of the road with a sufficient certainty for companies to change their business models, for banks and pension funds to expect returns as they invest in the clean energy deployment that we need to start seeing right now [are needed]. Clearly the early stages, the innovation stages, are decently supported with some bipartisanship. When you start getting to advanced demonstrations and deployment, we’re going to need a lot more partnerships between the public and private sectors in this decade.”
“There’s no way that we are going to get the kind of deployment pace that we need to meet the NDCs that are coming forward for 2030 without rapidly unlocking private capital. We are seeing non-traditional investors now beginning to make large scale eight and nine-figure investments in low-carbon deployment. I don’t think that is yet all settled. There’s a lot of issues to be resolved in terms of the returns and how diligence is performed. But it is happening, and corporate disclosures are all part of the same churn going on. But we need to resolve this in the next few years to have impact by 2030.”
Laurence Tubiana: “The carbon price, as high a price as it is in Europe, will not be met by the same response in the U.S., at least immediately. China is in another camp, of course, with a carbon market but still a low price. The convergence of prices will not happen very quickly. We have to understand how to have a frank discussion on how to balance this divergence in policy instruments. The EU has made a very bold movement trying to include maritime and aviation transport into EU Emissions Trading System. It offers an opportunity for more conversations on how we make this shift together and not against one another.”
Watch the complete video at: https://ondemand.ceraweek.com/cwc
Recent CERAWeek Conversations segments also include:
Latin America and its Era of Discontent? – Mauricio Cárdenas, visiting senior research scholar, Center on Global Energy Policy, Columbia University, SIPA; Ricardo Hausmann, Rafik Hariri professor of the practice of international political economy and director, Growth Lab, Harvard Kennedy School of Government; Shannon K. O’Neil, vice president and senior fellow for Latin America studies, Council on Foreign Relations; Moderated by Amb. Carlos Pascual, senior vice president, global energy, IHS Markit
- The Changing Landscape of Energy Transition: Where on the “New Map” Are We? – Jim Burkhard, vice president, oil markets, energy and mobility, IHS Markit; Susan Farrell, vice president, climate and sustainability, IHS Markit; Atul Arya, senior vice president and chief energy strategist, IHS Markit; Moderated by Daniel Yergin, vice chairman, IHS Markit
- Innovation Cities of the Future – Nicola Farranoto, head of the innovation team, City of Turin; Andy Icken, chief development officer, City of Houston; Rashesh Mody, head of monitoring and control business unit, Aveva; Moderated by Daniel Evans, head of global refining and marketing research, IHS Markit
- Decarbonizing the Industrial Sector – Hans Holmström, vice president, industrial gas turbine business, Siemens Energy
- Financing America’s Energy Infrastructure – Jigar Shah, director, Loan Programs Office (LPO), U.S. Department of Energy interviewed by Atul Arya, senior vice president and chief energy strategist, IHS Markit
About CERAWeek Conversations:
CERAWeek Conversations features original interviews and discussion with energy industry leaders, government officials and policymakers, leaders from the technology, financial and industrial communities—and energy technology innovators.
The series is produced by the team responsible for the world’s preeminent energy conference, CERAWeek by IHS Markit.
The complete episode library is available at https://ondemand.ceraweek.com/cwc.
About IHS Markit (www.ihsmarkit.com)
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