Your seat at the COP26 table - Part 3/3
Phased down, not phased out finally!
Happy Sunday,
At the end of COP26 I thought I’d need a few days to whittle down the agreement reached in Glasgow to the key points that matter. It turns out, I could’ve shot you all an email last weekend —it would’ve been short and sweet. I’d also probably have written it with the most depressing tone of hopelessness.
The expression and words of Tina Stege (Marshall Island’s climate envoy) at the end of COP said it all for me - disappointment with the lack of ambition, and a wait and see approach to what happens next.
As it turns out, taking that extra time ended up being less about sifting through the agreement, and instead about breaking out of the pall of gloom created by 2 weeks of hearing the ‘why now’ and the louder ‘why not now.’ I needed these last few days to allow my faith, hope and humour to return, recognise the irony in much of what we face collectively, and most importantly remember to be inspired by those who are proving change is possible.
While not a resounding success, Glasgow has been hailed as a fork in the road for climate action by government and business leaders. Let’s be frank though - actions speak louder than words. For the governments and corporates who’ve made big promises this year, they have till next year’s COP27 in Sharm el-Sheikh, Egypt to prove it - to us, the public. Or Glasgow will simply limp into the history books as a footnote (if that) — as just another city people met at, where pretty stories were spun and nothing was accomplished.
So, what was agreed at COP26?
Can Kicking: Countries will meet next year to pledge further cuts to emissions of carbon dioxide (CO2). Lobbying by different polluters countries and businesses meant, this key point to limit temperature rises to 1.5C got kicked down the road. Current pledges (if even met) will only limit global warming to about 2.4C.
OMG we said the C word: For the first time at a COP - Coal was actually mentioned, and with a plan to cut its use. Till almost the very end of COP it looked like this was going to be a historic moment — where the world would agree to “phase out” the C-word. But behind closed doors, something went down between the COP presidency, and India and China. The final text agreed was “phase down” - and despite the groans in the plenary room and around the world, it was a win in the books of many for even being mentioned. But it was a failed moment and a lost opportunity that created a cloud of darkness in hearts of every young activist, and citizens of the island nations sinking in rising oceans .
Show me the money: Lots of noise surrounded the pledge to significantly increase money to help poor countries cope with the effects of climate change and make the switch to clean energy (There’s even ‘talk’ of a trillion dollar a year fund from 2025). But consider this - we’ve never even managed to honour the previous pledge to provide $100bn a year (by 2020). So you’d understand the Global South’s skepticism about a trillion!
Financial organisations controlling $130tn agreed to back clean tech, such as renewable energy, and move finance away from fossil fuel industries. But here are just 2 of the many problems with that shiny promise - a) the lack of good, viable global investment opportunities in clean tech b) subsidies and support remain for fossil fuels, allowing investors have an out if they don’t see the returns they need. A.k.a as many activists have pointed out: it is a PR stunt, if regulations don’t help the follow through.
We’ll phase out subsidies, we promise: There is now a promise to phase-out the aforementioned subsidies for coal, oil, and natural gas (UN Development Programme estimates put that global subsidy figure at around $420bn every year). But that promise to ‘end subsidies’ has no ‘end date’. So, sure - that might happen, at some point in the vague future. Don’t hold your breath.
We won’t chop down trees, but no one can punish us if we do: The deforestation commitment by 100 countries (with 85% of the world's forests) is to stop chopping them down by 2030, but it's unclear how that will be policed.
Farts are definitely out: This was an easy give for the world’s rich countries. Everyone signed up to this commitment pretty quickly. A 30% cut in methane emissions by 2030 is now agreed, but the big emitters China, Russia and India haven't joined, and again — also the policing question. So — That!
Will they won’t they: Whatever the U.S. and China were up to in Glasgow felt a bit like watching your divorced parents starting to date at your wedding. A wedding they attended only after some pretty dramatic meltdowns, and then only to steal the thunder from not just the bride and groom, but every single wedding guest.
Somehow, in a global conference of 200 countries, the world’s two most powerful nations and biggest CO2 emitters decided to pretty much do their own thing. Ignoring everyone gathered and the COP process, the two went from scratching each others eyes out, to making out. Their bilateral pledge is to cooperate more over the next decade in areas including methane emissions and the switch to clean energy.
It would’ve been nice to have included the rest of the world!
Week 2 with the innovators & do’ers
I spent week 2 of COP26, trekking an hour into Glasgow from the lovely seaside town of Ayr (I honestly have no idea if it was actually lovely! I never saw it except under the cover of darkness). Week 2 was spent next door to the Blue and Green Zone at Climate Action and the Scottish Enterprise’s ‘Innovation Zone’. The Sustainable Innovation Forum and the Hydrogen Summit that I chaired focussed on the true implementation challenges of the transition.
While the ‘what to do’ was being debated across the across the river, the ‘how to’ was foremost in the minds of those who actually have to deliver on the promises. It was time well spent asking questions of global C-suite leadership, and listening to the private sector’s plans for getting us to our destination of net zero.
These were the few points that really stuck out for me at the Sustainable Innovation Forum. (Available on demand here)
The recognition that companies are its people, and there is real commitment from them to make the planet a cleaner, safer and healthier place.
There is a heck of a lot of innovation and collaboration going on, that most of us are unaware of. Sexy headlines don’t tend to lend themselves to the technical nature of much of what’s going to change (and frankly not everyone spearheading these solutions has a larger than life Elon Musk persona).
Oh yeah before I forget! Fossil fuel companies are still living in la-la land, pitching 1990’s style PR stories that no one is buying (not even their own shareholders). But in some cases like Bio-fuels, they are being backed by governments who’re digging in their heels (Aka the U.K, the U.S & the EU). The best line I heard all week was, “Our sustainability credentials are clear. We won the Terra Carta award.”
And remember (in Part2/3 of this COP series) when I said I hadn’t seen a lack of female representation in the Blue Zone in week 1? I stand corrected — the lack of diversity (of gender, race, ethnicity and colour) amongst corporates was glaring. Despite the very best efforts of the organisers, companies sent a battalion of grey and blue suited men to Glasgow. These gentlemen grumbled very loudly about the lack of diversity. But when asked by the organisers (and me), why they hadn’t nominated a diverse range of speakers and representatives to COP instead of themselves (as they’d been repeatedly requested) — they had no answer.
One has to wonder if these companies (for all their talk of diversity in leadership) truly want a different perspective, or way of thinking or experiences when solving for the biggest problem facing humankind? Echo chambers are so much easier, no?
What do businesses say they need to save the planet?
The consensus amongst business leaders boiled down to a few key elements. These were barely even acknowledged in the final COP26 agreement.
Create an established carbon market - businesses need a market that has rules, regulations and most importantly clear carbon pricing/carbon tax. To limit ourselves to a rise in temperature of 1.5C, we have to reduce emissions by 25-50% by the end of the decade. To do that we’d need an international pricing regime and it needs to cover the EU, China, US and India. (What is carbon pricing, you ask? I’m so glad you did! Here’s the World Bank’s answer)
Carbon capture is key - big emitters in particular are going to find it hard to cope with any sudden change in carbon pricing (say the cost of carbon rose to $100 per ton tomorrow, that would represent 150% of profits for many companies) that means they’d probably go bust. Heavy users need a clear path to decarbonisation. For that carbon capture technologies are expected to play an increasing role in the transition. (Check out part 1/3 of this COP series for what CCS is)
Governments need to think beyond the obvious — the focus needs to be on more than just pure infrastructure for mobility needs and charging (this was a nice little dig by the C-suite at the ‘build back better’ promises in developed countries). Governments need to have a more holistic view that includes impact considerations of low emissions zones, low carbon last mile transport, clear deadlines for ending combustion engines and critically — educating the public among other initiatives.
Global standards are the only way forward — Companies need and want clear signals so that the market understands the rules it must play by. This, some have suggested, can be accomplished by introducing cap and trade arrangements and new fuel standards. To create a level playing field all the standards according to business leaders need to be global (accounting standards were cited as an example).
Regulation is desperately needed (but not by regulators they say) — Everyone in the Innovation Zone wanted some kind of regulation for the transition - be it via standards or law. But the room was expectedly divided between Americans and Europeans about what that regulation would entail. Mostly everyone though acknowledged that whatever the market regulation, it has to be handled with care. As one speaker pointed out “oil companies have been resistant to change, in part because they have a responsibility to deliver a return to investors. Policies therefore should be in place to help them diversify.”
Customer buy-in is top priority — Be it in the developed world, or the developing —business leaders are clear: Too sudden a shift in direction can impact the ability of governments and companies to take consumers with them. The recent spike in gas prices was often cited throughout COP as an example — As one speaker put it: “We need fossil fuels to be phased out, but the public won’t come with us if the lights go out.”
Hydrogen as a tool to decarbonise
Hydrogen (H2) was a big talking point amongst the gathered business leaders as a key element on the road to decarbonisation. This periodic table element is a bit like fashion, it keeps coming back as an option.
What’s different this time is that the tech is now advanced enough for H2 to be viable solution and presents a huge opportunity for achieving not just global decarbonisation goals, but critically ensuring a just transition that can support economies around the world.
From fuel cells, to ammonia — H2’s use to fill the gaps that renewable energy leave is becoming more and more critical to any decarbonisation strategy.
H2 is currently mostly used by large industrial players: oil refining, ammonia , methanol and steel production. Demand for it has grown more than threefold since 1975, and continues to rise. But currently it is almost entirely supplied from fossil fuels, with 6% of global natural gas and 2% of global coal going to hydrogen production.
The big debate in the world of H2 molecules at this point is about which aspect of H2 needs the heavy long term focus and investment. This is where it gets messy. H2 comes in 3 main colours: grey, blue and green. These are the ones to know -even though there is H2 in every hue of the rainbow (pink, turquoise, you name it!).
What do Grey, Blue & Green H2 stand for? (Again, so glad you asked! Here’s a detailed explainer from WEF)
Grey: The most common form is generated from natural gas, or methane, and generates just a smaller amount of emissions than black or brown H2 (these use the dreaded C-word and are the most environmentally damaging). This is also the main way H2 has been produced for the past few decades and is the cheapest.
Blue: This pretty colour coding is given to H2 when the carbon generated in its creation is captured and stored underground through CSS. The source is still dirty (coal/gas/methane) and some argue that “low carbon” is a more accurate description, as 10-20% of the generated carbon cannot be captured. This is what companies want to stick to, so they don’t incur massive capital costs in a transition.
Green: Green hydrogen refers to hydrogen generated entirely by renewable energy. Less than 0.1% of global dedicated hydrogen production today comes from water electrolysis, But with declining costs for renewable electricity, in particular from solar PV and wind, this is what most environmentalists want to move to. This is the tough call. It’s the best way forward, but the costs are prohibitive and technology hasn’t caught up to make it commercially viable yet.
With energy, shipping, and infrastructure companies among others gung-ho about the potential of H2 (they’re still mostly hung up on Blue H2), the big debate at this point is if H2 is going to be a significant part of our energy mix - how do we make it as green as possible? The reasons you’ll hear over the course of the coming years is that blue H2 is just easier to use as a transition tool, as all green at this moment is just not possible. The question is, how long do we as consumers let blue H2 be our compromise?
The consensus for H2 was that the key to further develop the technology’s use across different sectors will be creating demand to bring pricing down (as was the story with solar and wind power). And that demand generation is going to have to start with industry rather than the end consumer to get the ball rolling.
As one of the ladies driving H2 innovations put it: “People want jobs, they want heating, they want to watch TV, they want lighting, and now they're hearing about building a hydrogen economy, it's very far away from them. You have to get it closer to them and tell people why it is necessary to make the change.”
You can catch up with all the questions you may have about a H2 economy and its potential— the H2 Transition Summit at COP26 is available on demand here.
Have you met?
The ladies moving the transition needle
These are just a few of the women who blew me away at the Sustainable Innovation Forum with all they are accomplishing:
Marzia Zafar is director of policy and sustainability at Kaluza
Marzia’s role is key in accelerating energy suppliers’ digital transformation with Kaluza’s business focussed on developing software for suppliers — from simplifying billing to providing tailored tariffs, and critically using data to make the transition smoother.
Mary Warlick is the deputy executive director of the International Energy Agency (IEA). She was appointed to the role in May this year. She retired from the US Department of State in 2017 after a 34 year career during which she served most recently as Principal Deputy Assistant Secretary and Acting Special Envoy and Coordinator for International Energy Affairs. Previously, she was Ambassador to Serbia under President Barack Obama, Consul General in Melbourne, Australia, and Counselor for Economic Affairs in Moscow.
Lynn Good is CEO of Duke Energy. She leads one of the largest electric and gas utilities and commercial renewables developers in the U.S. Under Lynn, Duke Energy’s sustainability goals will translate to almost $100 billion in spending on its transition to clean energy over the next decade.
Katherine Neebe is chief sustainability officer at Duke Energy. She also leads the company’s foundation and Duke’s national engagement and strategy.
Mafalda Duarte is CEO of the Climate Investment Funds (CIF), an $8.5 billion multilateral fund supporting climate action in 72 developing countries. She took on the role in 2014 and leads CIF’s more than 300 investments which are known for enabling breakthroughs in renewable energy deployment and access, sustainable forestry, and climate resilience.
Sanda Ojiambo is the CEO and executive director of UN Global Compact
Sanda is from Kenya and is the second woman to lead the organisation. UN Global Compact is the UN Secretary General’s strategic policy and advocacy initiative calling for the alignment of business operations and strategies with the 10 universal principles in the areas of human rights, labour, environment and anti-corruption. The organisation motivates companies to integrate the SDGs into their core business strategies and operations.
Gillian Harrison is CEO of engineering consultancy, Whitefox Technologies. Whitefox is a specialist engineering group that delivers innovative membrane solutions to biofuels and chemicals producers. The group has over 10 years’ industrial experience, focused on providing the most energy and water-efficient separation systems worldwide.
Kim McCann is head of sustainability of global consumers and manufacturing, with quite the specialisation in industrials and aviation at PA Consulting. And boy does she know her stuff! She’s been around the block in the energy world after all! PA Consulting is an innovation and transformation consultancy, with over 3,300 specialists in consumer and manufacturing, defence and security, energy and utilities, financial services, government, health and life sciences, and transport.
Meet the ladies making H2 a reality
Rosalinde van der Vlies is director of clean planet at the European Commission.
Rosalind’s very job at the European Commission’s directorate general for research and innovation is to find solutions to clean up the planet.
Clare Lavelle is the head of energy consultancy Arup’s business in Scotland, Northern Ireland and North East England. She also sits on the board of Scottish Renewables, the voice of the renewables industry in Scotland.
Roxana Bekemohammadi is executive director of the Western States Hydrogen Alliance. In this role she leads and advocates for H2 and fuel cell technology in commercial mobility applications in the western states of the U.S.
Federica Sabbati is the secretary general of the European Heating Industry (EHI) since 2012. EHI is an industry association of companies in the production of efficient heating systems. She is helping lead EHI members to innovate hybrid and digital solutions, and heating technologies that work with new gases such as hydrogen.
And last but not the least:
Vaitea Cowan, co-founder of Enapter
Enaptor won Prince William’s Earthshot prize this year. Quite a feat for a start up Vaitea founded with her colleague Jan Justus Schmidt just three years ago. Now Enaptor’s green hydrogen technology shows the kind of promise that could change the way we power our world. The company provides a clean alternative with its AEM Electrolyser technology which turns renewable electricity into emission-free hydrogen gas. Mass production is planned to begin in 2022. Plus give Vaitea and Jan kudos for ambition — by 2050, Enapter’s vision is to account for 10% of the world’s hydrogen generation.
Next week, The Chief Brief will return to its normal format, discovering more amazing women changing the world. Drop me a note if there is a fabulous woman you know, who is making waves that the world needs to hear about!
In the meantime, I’ve love it if you spread the word on your social media! Let’s make this global tribe bigger!