By Clare Foster
This piece first appeared in Business Insider on Monday 17th August 2020.
The COVID-19 pandemic has received 24/7 media coverage across the globe, and with good reason. Coronavirus has had a catastrophic impact, claiming the lives of hundreds of thousands of people, devastating our economies and materially changing the lives of millions as we try to adapt to the profound societal changes it has inflicted.
Many will vividly remember watching Boris Johnston tell the nation on 23 March: “The coronavirus is the biggest threat this country has faced for decades.” Whilst there is no doubt that the particular challenge posed by COVID-19 is unheard of in recent history, and should not be diminished, I would take issue with the Prime Minister’s statement. There is another threat that has been looming for decades, which is exponentially greater than coronavirus and poses an existential threat to humanity. Yet the climate change threat is failing to attract the attention, and action, it deserves.
To put it into context, as Sir David Attenborough said last year: “The scientific evidence is that if we have not taken dramatic action within the next decade, we could face irreversible damage to the natural world and the collapse of our societies.” This is a remarkable statement on a number of levels, but even more remarkable is the difference a year makes. The headlines about Greta Thunberg and Extinction Rebellion (remember them?) that reverberated around the globe less than a year ago in the wake of the Australian bushfires and flooding in Venice feel like a distant memory, and governments and society have not reacted to climate change in the same way that they have to the COVID emergency.
The coronavirus crisis has highlighted the ability of central banks, governments and agencies in multiple jurisdictions to move quickly, demonstrating that their inherent bureaucracy need not be a barrier to dynamic action when faced with an emergency of this scale. So why are we not treating climate change like the pandemic?
There are a number of reasons:
The COVID-19 pandemic is far from over, its impact is tangible and we remain in fire-fighting mode as governments try to halt its spread. As we find ourselves facing the deepest recession since records began, it is unsurprising that the focus is on tackling the virus and the economy first.
Climate change for many still seems like a generation or two away and so they will worry about the here and now rather than what may happen in the future. The challenge can also seem insurmountable, prompting people to think: “Why bother?” even though we all know, deep down, that small steps and changes in behaviour can make a big difference.
One of the few positives arising from the COVID-19 pandemic was the impact on carbon emissions during lockdown. Whilst the problem is far from solved, perhaps the (temporary) reduction in emissions since lockdown has encouraged a sense of naïve complacency.
Tackling climate change is not just something that needs to be addressed by those working in the clean energy sector – it will require a gargantuan effort (or many billions of people making small efforts) across the public and private sectors and will involve us all. Is it just too difficult to mobilise everyone to pull in the same direction?
From a UK business perspective, things need to change quickly to get the economy back on track, a point that is not lost on Rishi Sunak, the Chancellor of the Exchequer. However, the UK simply cannot return to life and business as usual. A green recovery is our best hope of rebuilding an economy ravaged by the COVID-19 pandemic and addressing the climate emergency. It should be a recovery focused on cutting emissions, investing in more sustainable, greener projects, creating jobs and building a fairer and more resilient society. Why? Because if we revert to the same bad habits that crept back in after the last financial crisis of 2008 (where bailout packages led to the biggest rise in carbon emissions in 50 years) then we will fulfil Attenborough’s prophecy. The debate should not be whether the recovery should be green but rather how a green recovery is best achieved.
It is important to remember it is not all doom and gloom, however. In the clean energy sector, eyes are firmly on a green recovery. There is huge appetite (backed up by a fantastic track record) to achieve the targets for offshore and onshore wind, as well as the other renewables technologies that will play a major part in helping us achieve the 2045 and 2050 net zero targets set by the Scottish and UK governments respectively. The potential for job creation is enormous.
In the financial sector, there is a recognition that the funding requirements to achieve net zero are gigantic and that there needs to be a greater focus on investments that help tackle climate change. Recently, the Net Zero Investment Framework (which was designed by 70 pension funds and investment managers representing assets of $16 trillion) was released for consultation. It provides the first practical blueprint for investors to maximise the contribution they make in tackling climate change and achieving net zero emissions globally by 2050. The framework focuses on the twin targets of decarbonising investment portfolios and increasing investment in climate solutions. The increasing importance of environmental, social and governance (ESG) factors and disclosure requirements mean that sustainable investments are the way forward.
Meanwhile, the oil and gas sector is playing its part too. At the beginning of August, BP announced its new strategy to transition to an integrated energy company and set out its net zero ambition. It is the latest in a long list of oil and gas majors to have recognised that low carbon is the only viable future.
While these examples give cause for optimism, they are the tip of the (melting) iceberg and we still need to do much more. As a minimum, and this is not an exhaustive list, we need:
greater collaboration between the public and private sectors, the former providing enabling mechanisms to encourage the latter to innovate, accelerate and deploy at scale the solutions we need to tackle climate change in a very short period of time – and with key performance indicators for each (as what gets measured tends to get done);
recognition and commitment that every part of the economy has a part to play – from forestry and construction to the financial and food and drink sectors, to name but a few;
to identify the barriers to deployment and agree solutions (now) with a commitment to rapid implementation;
to recognise that a ‘one-size-fits-all’ solution is not appropriate in terms of technology, financial structuring, expertise and deployment – to achieve net zero there will be a multitude of solutions and we need to ensure we are maximising those that will get us to net zero quickly and sustainably;
to identify a pipeline of investible projects and quickly engage with developers – there will be appetite but there also needs to be greater focus on, for example, planning policies being supportive of greener housing. Sustainability and low carbon need to be front and centre of decision-making;
to align the energy and infrastructure markets – leveraging the expertise from both to help in areas such as energy efficiency and district heating. Decarbonising heat and transport are for many cities some of the key challenges, and partnerships can help; and
embrace the collective responsibility of society – as individuals, we need to recognise and act on the important lessons we have learnt from the COVID-19 crisis: driving less, shopping locally, and making choices that are more sustainable. It is incumbent upon each of us as individuals to play our part.
Complacency is not an option and we are running out of time. The UK and Scottish governments have shown that when an emergency presents itself they are able to move at speed. If we are to try to address the climate emergency and the socio-economic effects of coronavirus with any chance of achieving the economic growth, employment and a sustainable future required, we need to see that type of dynamic action again, not only from government but also from industry and society. I am up for that challenge – are you?
Clare is a partner and Head of Clean Energy at Shepherd & Wedderburn.