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COP26: What to expect
Ian Bremmer's Quick Take:
Hi, everybody. Ian Bremmer here, and a happy COP26 kickoff day. That's in Glasgow. We've got a bunch of Eurasia Group folks there. I am not. I'm here in New York and of course wouldn't you know, it's the first day that it's pretty cold out and so I actually got the winter gear out. It feels a little bit perverse given the climate issues that we're talking about and thought I'd talk a little bit about where we're going.
Look, it's interesting, first of all, because the COP26 summit is right after the G-20. The G-20 didn't get much attention this time around. Also, because there wasn't an awful lot of news being made. I mean, the big announcements are coordination on the economic side. It is about an alternate minimum tax, which was been driven by the United States and the Europeans. We had movement towards that the last OECD summit and full agreement this time around at the G-20. Also, there is breakthrough on aluminum and steel tariffs that would have led to tit for tat, from the Europeans against American exports, a bunch of luxury goods. Nobody needs any of that. Both sides taking a step away from the brink, improvement in terms of globalization and movement of goods and less costs being born by consumers. And at a time when we're hitting inflation. And when there are all sorts of supply chain difficulties and shutdowns, no leaders really want to focus on a bigger fight.
Now having said all of that, the reason the G-20 was one, problematic and didn't make a lot of news was primarily because the Chinese and the Russians didn't show up. And the fact is that those are bad relationships right now, both with the United States and increasingly with the allies. A lot of American allies are unhappy with different parts of American leadership. They don't feel the Americans are as committed, can be as counted on. There have been a bunch of flare ups on individual issues. We've talked about them over the past months and years. But those allies are much more antagonized by the Chinese and the Russians. And they certainly prefer the status quo of the US alliance than they would anything else. They want more leadership from the Americans. And the one thing I heard consistently was questions around whether or not Biden would get this $1.75 trillion, but if you add the infrastructure piece in $3 trillion, through. And what it would look like and when it would happen. Because, he's been discussing that with if these global leaders since he became president, it was a big part of his talking points around the G-7 in Cornwall.
He delayed his trip to Europe by several hours, with the intention of getting something done and dusted. That is not where we are right now. And so, there's a lot of concern. It came up in, I'm told every single meeting that Biden attended. I think it's still a relatively good story. I mean, the progressives in the US are going to be disappointed by the high line numbers not getting done. Half of the $3.5 that was originally talked about in the social contract, but still once it's in, everyone's going to be talking about it. You're talking about on an annual basis, something like what, a couple points of GDP, 2% of US GDP on an annual basis for 10 years, when you put the two bills together, that's a big deal. It matters globally. And it also matters in terms of climate. And the fact that a lot of the promises that were being made on the climate side are not going to be in the final bill also makes it harder for the Americans to offer leadership at the COP26.
So I would say generally speaking, pretty friendly G-20. Easier by the fact that the challenges were not front and center, but now we have the tough meeting, which is the COP26, where there's an absence of trust, there's an absence of global leadership, the Chinese, again, aren't there and that's a huge deal. The Chinese not showing up at the G-20, you kind of work around them. You kind of talk up about what you want to talk about. It's sort of like the G-7 plus. Chinese don't show up at the COP 26 summit, they're the largest emitters of carbon in the world. More than twice as much as the United States in terms of the entire country's emissions per year. That's a very big deal and you can't get anything close to a deal. You can't talk about two degrees centigrade, unless the Chinese are on board and constructive.
And right now, they're not on board and they're not constructive. Some of that is China's fault. Some of that is their unwillingness to come to the table with a realistic plan for how they would get to net zero, even by 2060, which is late. A lot of it is bad timing. We have right now, prices going up on fossil fuels. We have a lot of shortages, particularly in Europe, particularly in China against supply chain challenges. And we have the Chinese in particular putting more money into coal production domestically, precisely because they will not tolerate Chinese citizens going cold in the winter. Well, that's the worst possible time you could be having a COP26 summit, and the outcomes are not going to be very positive as a consequence. So that's the downside.
The positive side is that there is a lot more momentum, both in terms of investments in new technologies, renewable technologies that have brought prices way down, especially in solar. You've got advances that are coming at scale in electric vehicles, in batteries, and in the supply chains that will allow all of that to happen on a global basis. And you increasingly see competition between the Americans, the Chinese, and the Europeans to invest more, so they have more influence over post carbon atoms, and that's an energy delivery in a renewable space. That's all pretty positive. And the fact that the Americans and the Chinese as federal governments are not doing most of the driving in terms of net zero doesn't mean that you're not moving towards renewables. You're moving much faster towards renewables. And I think a lot of people would've expected five or 10 years ago, even though climate change is also happening without a sufficient response from the world's largest emitters.
The reason for the former is because the private sector understands this is where the money's going to come. And so that does drive a faster move away from fossil fuels. Once they understand that this is inevitable, you want to get there early. You want to get there first. The reason why you're not moving fast enough on net zero is because the bulk of the carbon emissions are increasingly coming from countries that need to globalize. Countries that need to industrialize. From people that want to be part of a global middle class and from governments that are unwilling to say no to them. And why would they?
And the developed world, which of course is responsible for most of the carbon emissions that have gotten us here historically, are not yet prepared and may never be prepared to put the kind of resources in place that would allow the poorer people in the world to get to a renewable future without having to take most of the burden on themselves.
And so that equity conversation, which we can talk about, but nobody is really willing to put their money where their mouths are, that's leading us not to 1.5 degrees centigrade warming, which is really an impossibility, not even a two degrees, which no one is expecting now though that we're all kind of hoping we can see more action there, but rather the path that the earth is presently on, 2.7 centigrade, I think it's more trending towards three or a bit higher precisely because of the absence of leadership, the geopolitical challenges that will continue to bake in bigger problems in the near term.
To the extent that we get optimistic about climate, it is not that the next 20 or 30 years are going to somehow be better because most of the carbon emissions that will lead to that warming have already been baked in. Either we've already made those emissions, or they're clearly going to happen before you can invest suitably in infrastructure that gets you beyond carbon.
The real question is whether in 2050, in less than 30 year's time, in other words when the next generation is leading the planet, will we have the technology at scale, the political and institutional architecture and the will to move forward sustainably? And there, I'm getting more optimistic. I think that there is such an effort, and such an effort is in part being driven precisely by the younger people who will be the leaders at that time. And so, the fact that COP26 is likely to be at best a bit of a nothing-burger and at worst kind of a disappointment does not mean that suddenly we've lost track of climate or that we're not making any more progress. And in fact, I do think that leaders like Boris Johnson, the UK prime minister saying, "it's one minute to midnight." And John Kerry, who's been one of the strongest voices on climate change from the United States in past years saying, "This is our last chance." It's just not true, right? Because if it's the last chance and we're failing, well, then you give up and that's of course not what we're going to do. It's the last chance. And there's a lot of failures happening, and yet there's still plenty of momentum. And we're going to say it's the last chance again next year and the year after that. But the reality is we're making progress.
So I enter the COP26, highly aware that GZERO and net zero do not align well, do not play nicely with each other. This is going to be a tough time for particularly the poor people in the world that are going to have to deal with the biggest challenges that come from a change in climate. And yet, we're going to continue to see much more progress. And if most of that progress comes outside the COP 26 structure, that's fine by me. So that's it for me. I hope everyone's well. Talk to y'all real soon and be good.