Global Head of Sustainable Finance, HSBC
With 2020 so dominated by the COVID-19 pandemic, it would be understandable for politicians, policymakers and the private sector to be consumed by further lockdowns, vaccine roll-outs and economic recovery. But the climate emergency will not wait for a return to normality. Ambitious action from all parts of society needs to be taken in the here and now.
Fortunately, some stars are beginning to align on this topic. Climate commitments are now forthcoming from a huge range of countries and institutions. COP26, the yearly UN climate policy gathering, will now take place in November 2021, after being postponed due to COVID-19.
Hosted by the UK government in Glasgow, it will be a key moment to lock in ambitious low-carbon transition policy goals across the world. We expect the following five trends to dominate the run-up to this event.
1. More power to climate diplomacy
The three major global economic blocs – the US, the European Union and China – have plenty of disagreements, but since Joe Biden’s election to the US Presidency in November, they are united by a desire to take firm action on climate change.
Biden has appointed former US Secretary of State John Kerry as special climate envoy, raising the prospect of a greater role for climate diplomacy. This could mean improvements to the 2015 Paris Agreement, greater international collaboration on technical development and investment, or action on specific economic sectors and industries. China recently committed itself to net-zero emissions by 2060, and the EU has set its sights on the same target by 2050.
The UK has also recently announced ambitious offshore wind targets, and will be ending its financial support for fossil fuel production overseas. It has also renewed its Paris Agreement pledges, which will translate into a 68 per cent reduction in UK emissions by 2030. These are encouraging developments as we head into COP26, and will increase the pressure for action on the private sector.