Climate change must make activists of us all, not just nations and business

It would be a better world if nations tackled the potential devastation of climate change the way they averted nuclear war over half a century ago – as if their very existence depended on it.

Back then, it was known as mutually assured destruction, which led to the nuclear weapons treaties. The world needs that level of fear again to take action against climate change. Unfortunately, it is not the world we live in today.

There is much to fear for the world on a pathway to catastrophic ends, not by missiles, but by a slow moving tide of damaging change in the air, the sea, and across lands that have no political boundaries.

A recent UN Intergovernmental Panel on Climate Change report said that sea level rise is “irreversible” for centuries. UN Secretary General António Guterres called this a “code red for humanity”. Glaciers are calving. Fires are raging. Yet they have not spurred countries to act fast enough.

The upcoming UN Climate Change Conference (COP26) in Glasgow, a two-week long soirée bringing together an estimated 25,000 participants, is an opportune time to go beyond lofty goal setting. There is no more time left for open-ended pledges that merely satisfy the global optics of cooperation. The fever pitch of climate change has to be broken and that requires action more than words.

And there is no doubt that cooperation is failing. The United Nations approach of individual country commitments appears to be too weak to have the needed impact.

Even if all countries meet their limited commitments to the Paris Agreement signed in 2015, the world is expected to warm by 2.4 degrees Celsius by 2100. That is not a world anyone would want to inhabit. In reality, large swathes would be uninhabitable.

Attempts to prompt action bilaterally have failed as well. John Kerry, US climate envoy and former secretary of state, went to Beijing in September with the hopes of convincing the world’s largest emitter of greenhouse gases to do more.

China was unwilling to separate climate change from the litany of other irritants in the bilateral relationship. Both countries will have to move ahead independently rather than leading net-zero efforts together.

International bodies and the commitments countries make also appear too weak to influence companies. The UN said just this week that oil, gas, and coal production is set to far exceed the limitations required to keep the temperature from rising more than 2 degrees by 2030, or even the more modest 1.5 degree rise, the minimum required to avert the worst disasters.

Private energy companies, if left to their own devices, will not do enough when those actions may work against their immediate financial interests.

Some change is coming, however. Corporate boards are beginning to address the concerns of activist investors and shareholders that realise longer-term profits are endangered by short-term thinking and non-action on climate change.

Engine No 1, a small investment firm, managed to win a proxy fight against ExxonMobil and installed three climate and environment-friendly directors on the firm’s 12-member board. Whether that will lead to operational changes by the fossil fuel behemoth is still to be determined.

Central banks must work to serve the people, not the markets

Twenty per cent of Fortune 500 companies have emissions commitments across their supply chain. That’s still 80 per cent too few. More than 200 companies globally have signed on to Amazon’s Climate Pledge to reach net zero by 2040. That could eliminate over 5 per cent of current global emissions. But, so far, implementation has proven elusive.

Pledges like these are clearly not enough. Unless these companies are held to their commitments, either by market forces, government policy or legal action, they could easily shirk their responsibilities as well.

One way to hold companies accountable is through policy levers like carbon taxes on highly polluting industries. A 2018 MIT study found targeted taxes on fossil fuel use, combined with reducing corporate tax rates while providing rebates to low-income households, could significantly lower emissions.

A successful carbon tax was implemented by Canada’s British Columbia starting in 2008 that significantly reduced greenhouse gas emissions. South Africa implemented a carbon tax in 2019 that included 80 per cent of its greenhouse gas output.

As pricing carbon inputs across supply chains becomes more standardised, carbon taxes could even be extended to imported goods. This would create additional pressure on manufacturers and governments to take more serious action.

Courts are also taking a more proactive stance. In a landmark case in the Netherlands in May, The Hague District Court found that Royal Dutch Shell’s plans for lowered carbon dioxide emissions were insufficient. The court imposed a specific target of 45 per cent reductions by 2030, faster than the pace the company has set for achieving net zero by 2050.

COP26: No more blah blah blah, we need climate action

Germany’s court has acted to strengthen legally binding, countrywide commitments to carbon neutrality by 2045 and carbon negative thereafter. Specific interim targets were also made, including 65 per cent reductions by 2030 and 88 per cent by 2040. The court further instructed that if the EU made more stringent targets in the future, these could be tightened, but not loosened.

These types of actions do not require multilateral agreements. They don’t even require national commitments that feature at international gatherings like COP26. They are the product of the very real concerns of societies that will be negatively impacted by floods, fires and drought that, in turn, will affect their homes, their health and their livelihoods, all from runaway climate change.

As countries gather again for the UN Climate Change Conference, perhaps they can focus first and foremost on what’s at stake and the urgency to act.

Brian P. Klein (@brianpklein) is a geopolitical and economic strategist and former US diplomat