Insights

A Week in Impact: Another year, another record

Greenhouse gas concentration poses a threat to Paris agreement targets; China rolls back on renewables and forward on coal; France calls for "urgent" EU ESG rules.

ANOTHER YEAR, ANOTHER RECORD

The concentration of climate-heating greenhouse gases has hit an “all-time high,” according to a report from the UN’s World Meteorological Organization (WMO) released on Monday.

The jumps in key gases measured in 2018 were all above average for the last decade, showing climate action is having zero effect on the atmosphere. The WMO said the gap between targets and reality are both “glaring and glowing.”

“There is no sign of a slowdown, let alone a decline, in greenhouse gases concentration in the atmosphere despite all the commitments under the Paris Agreement on Climate Change,” said WMO Secretary-General Petteri Taalas.

Arriving hot on the heels of the WMO report, the UN Environment Programme (UNEP) today released its annual snapshot of how the world is performing in terms of cutting carbon emissions. The Emissions Gap Report 2019 looks at the difference between where emissions are headed and where they need to be to avoid dangerous warming: a disparity which continues to grow.

According to the report, the world must cut emissions by 7.6% every year for the next decade—which requires countries to increase their carbon-cutting ambitions fivefold—to avoid global warming of more than 1.5°C by 2030. Even if all current policies are met, the world will warm by more than double that by 2100.

"The summary findings are bleak," it cheerfully concludes. "Countries collectively failed to stop the growth in global greenhouse gas emissions, meaning that deeper and faster cuts are now required.” Adds UNEP Executive Director Inger Andersen: “Our collective failure to act early and hard on climate change means we now must deliver deep cuts to emissions.”

The report pays particular attention to the actions of the wealthiest countries. The G20 are responsible for 78% of all emissions, but only the EU, the UK, Italy and France have committed to long-term net-zero targets. Fifteen have no timeline for a net-zero target.

It puts forward suggestions for each of the G20 countries, including that China bans all new coal-fired power plants. On that note…

CHINA KICKS OFF COAL-BUILDING BOOM

While the rest of the world has cut coal-based electricity over the last 18 months, China has added enough to power 31 million homes.  

Non-profit Global Energy Monitor has reported that China significantly expanded its coal fleet between January 2018 and June 2019, with the number of plants under construction equivalent to the EU’s entire generating capacity. The surge in China’s coal power capacity is, unsurprisingly, a major threat to the Paris climate agreement.

Compounding alarm, China has announced plans to slash subsidies for renewables by 30% in 2020. It will also stop funding large solar power stations and onshore wind farms over the next two years.

China’s U-turn has major implications for the planet. As the FT reports, China has gone from a leader to a laggard in a matter of years, and it could not have come at a worse time. With the US withdrawing from the Paris climate accord, an increasing amount of attention—and pressure—has fallen on China given the size of its economy.

Yet, as “fraying multilateralism” has further eviscerated the climate accord, China has been “distracted by a slowing economy, the US trade war and protests in Hong Kong.” As a result, the green agenda has fallen on its list of priorities.

Concludes Todd Stern, chief US negotiator for the Paris agreement: “The Paris agreement is going to rise and fall, on the level of political will in constituent countries. That has always been true. The fault is that there is a lack of political will in virtually every country, compared to what there needs to be.”

IN OTHER INDUSTRY NEWS

S&P has bought the ESG ratings arm of RobecoSAM, escalating an arms race with rival Moody’s “as the companies look to capitalise on increasing demand for data on sustainable investments.” The deal includes the SAM Corporate Sustainability Assessment, the widely followed annual evaluation of 5,000 companies’ sustainability practices.

Meanwhile: France’s top financial regulator has warned the EU “urgently” needs common ESG rules. The FT reports that Robert Ophèle, chairman of the Autorité des Marchés Financiers, has “urged Europe to move faster on setting common standards for ESG investing to prevent widespread greenwashing.” He warned of member states undercutting one another on ESG, as asset managers become “increasingly ambitious and even aggressive” in bringing sustainable funds to market.