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COP27: Not good enough
Ian Bremmer's Quick Take: Hi everybody. Ian Bremmer here on a Quick Take to get you kicked off for your week.
I thought I would talk about the Climate Summit, which has just concluded in Sharm El Sheik, the COP27 was not one of the better moments for global climate response. If there was a big win, and I wouldn't call it a big win, but at least it's progress, it's on the establishment of a loss and damage fund and the idea is to use funds from industrialized countries that pay for climate related losses that are already being experienced in the billions and billions of dollars in poorer countries. The developing countries have been demanding the developed world indeed put such a fund together. The problem is of course, that in addition to the reluctance to get it done, just saying that you have such a fund does not have a mechanism for distributing money, a mechanism for raising money, and certainly there is no cash, there's no financing yet. Maybe over time you'll see the private sector make donations into this fund, maybe you'll see some government commitments but for now at least, it's an announcement of intentionality without any there there. That's the big news, right? That's the actual major headline that came out.
Besides that, the fact that the United States and China are talking together, once again, they are the two largest carbon emitters on the planet and so clearly talking is better than not talking. Though it was a little problematic that right after John Kerry, the special climate envoy from the US, met with his Chinese counterpart, Xie Zhenhua, Kerry then tested positive for COVID. Not ideal in terms of the mood music around that meeting, but again, promising that at least they are talking to each other. They clearly need to be.
Having said all of that, the idea of phasing out fossil fuels didn't make it into the text. There was a strong need to defend the 1.5 degrees centigrade maximum acceptable warming, which the world is going to shoot past, it's going to be two or 2.5 so it's a conversation without a lot of substance to it, but it almost died informally in this summit, and again, it shows you kind of how the world has not been able to get ahead of climate response in alignment with what policy makers that are given responsibility for dealing with climate have been pushing for.
I would say that most of the real action is actually happening in developing countries striking solo deals for their own countries. We saw that last year with South Africa and an $8.5 billion deal to help them finance a faster transition to renewables. This year, Indonesia, a $20 billion deal getting inked, Vietnam, India, Senegal, are all in pretty advanced stages of talks that should happen over the course of 2023, and that process is appealing to developing countries. It's pretty straightforward, it's a lot faster and there are a lot of African countries that are talking privately about planning on leveraging the COP platform but bypassing the overall negotiation system to bring money home.
What that means is that you have this very, very slow global wide progress, but very fast paced individual country packages makes an open question as to whether the COP itself has as much of a future. Will we see these big global climate summits? They are important because they are forcing mechanisms for individual leaders for the developed world to make announcements that then become policy over time. If you break that and you just do individual deals, you're going to lose a lot of progress overall in carbon emissions and in how fast you move to renewable.
By the way, the Secretary General is very concerned about this, that if you want to move towards a 2 or even a 2.5-degree goal as opposed to 3, which is where the world is presently heading, and you get rid of the COP process, individual deals are not going to get you there.
As it stands right now, the COP process should be a movement of momentum in two different ways. First, it's a global marker for new announcements and the emergence of trends in solutions and focus areas. Then secondly, it's the actual negotiations and country level action. If you lose that, there still is an enormous amount of money being invested in new technologies, there is enormous amount of requirement of countries to do more because of the impact of climate change that is growing around the world. You will still get there, but you'll get there more slowly, you'll get there less efficiently, and you'll get there with the developing countries taking even more of the burden on their shoulders because the wealthy countries are focusing on themselves and not on global north south or west south solutions.
As it is right now, sort of looking at what's happened over the last two, two and a half weeks, it feels like you're in a car that's accelerating off a cliff. This summit did not materially reduce the speed, but it did design some airbags so that's pretty much where we are and we'll be focusing a lot more on this issue going forward. Next year's summit in the United Arab Emirates, a country that cares a lot about diversifying their investment beyond fossil fuels, but also recognizes that they're going to be one of the last countries standing to be able to produce fossil fuels, a push and pull just like much the world is facing right now on responding to the growing challenge of climate change.
That's it for me, I'll talk to y'all real soon.
For more of Ian Bremmer's weekly analyses, subscribe to his GZERO World newsletter at ianbremmer.bulletin.com
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COP26 climate deal: Reasons for hope
Ian Bremmer's Quick Take:
Hi, everybody. Ian Bremmer here. Just about to head to Singapore, but before I do, I thought I would give you guys a quick recap on the COP26 summit, couple weeks long in Glasgow.
And I understand that it's fashionable and important to talk about just how immediate and immense the climate crisis is, and that we didn't do enough, and we have more work in front of us, and all that is true, but actually I come away from the last two weeks fairly optimistic in the sense that the acceleration of effort that we're seeing from all corners, I mean there's even more from the central governments than you would've expected, and they were the underperformers, certainly more from the private sector, more from the banks, more from the corporates. And as a consequence, right now, I mean the big headline is that we are still on track for 2.4 degrees centigrade of warming if all of the countries make good on their existing pledges, which is itself unlikely. So we're not really on track for 2.4, it's higher. And that's double where we are right now, 1.2.
Having said that, there are a number of positive things that I think are also getting baked in, not just how much carbon is in the atmosphere. One is that they have decided, the participants of COP26, that they're going to come with new goals next year, as opposed to every five years, which had been the process. So as we're seeing more effort, as we're seeing more progress, we're also seeing stepped up urgency. And the very fact that you will now have a one-year, an annual summit that becomes an action-forcing event, even if it's marked by half measures, will end up getting you a lot more progress. I think that's significant and everyone agreed to that.
Secondly, the fact that fossil fuels were specifically called out in this agreement. And you'd think, well, that's crazy. Of course, we know that fossil fuels are one of the biggest contributors to carbon emissions, and so you need to get past fossil fuels if you're going to reduce climate change. But the fact is that governments, because all governments are able to veto the draft, have been unwilling to make that mention. We now actually see that this is a global draft that is really about making the transition away from fossil fuels, and everyone is on board with that now. A lot of countries are much more squirrely. A lot of countries will take a lot more time. Some because they're really committed in terms of the wealth that they make from the production of oil and gas; think about Saudi Arabia, think about Russia. Some because they're really poor and they desperately need to be able to continue to use relatively cheap energy to bring their people up to middle class, specifically India, but also Indonesia, to a degree China and others.
Having said all of that, I think it is pretty clear now that we are on track to have a majority of the world's energy consumption well before 2050 to be coming from renewable energy. And I include nuclear in that because it doesn't lead to carbon emissions, but in other words, post-fossil fuels, not gas, not oil, not coal. The International Energy Agency believes that that date is potentially 2035, which is wrong because it again requires that everyone actually adheres fully to stated goals. And this is a lot of countries that don't necessarily have a way to get from here to there legally enshrined, especially in the nearest-term. But the big story is acceleration of effort, and related to that, reduction of cost, improvement of technology; the fact that at scale, solar and wind, and particularly solar, are increasingly much cheaper than coal.
And so, once you have the financing that allows you to put new infrastructure in place, and again, it's using old infrastructure that is so much of the reason why there's going to be more of a lag around fossil fuels, you will see all countries, not just wealthy countries, moving much faster. So I mean, the four years of the fact that the United States and the Trump administration left Paris Climate Accord, renewable energies were still getting cheaper. They were still getting invested in inside the United States. State governments, mayors, city governments, lots of private sector actors, NGOs, they were all continuing to press and do more to respond to climate change, even as the federal government basically punted for four years.
The Biden administration is more disappointing than you would expect. John Kerry doing a really strong job and not alienating or antagonizing many people inside Biden administration, which frankly, a lot of people were surprised by, myself included. Nonetheless, I mean, you see that with the $1.2 trillion in infrastructure and what is likely coming down the pike in the coming weeks on social spending, a lot of the committed green transition spending is going to be taken out. So the Federal Government is doing less, but even so, you are getting significant effort from the United States, even in terms of moonshots. Part of this is there's so much money, interest rates are so low, investors are not happy with the idea of half a point, a point of returns every year. They're chasing returns and they're much more willing to invest in untested, but potentially moonshot technology.
So the fact that Peter Thiel, a company he's been involved in just raised $500 million for fusion energy technologies, I mean, could go absolutely nowhere, but it's by far the largest investment we've seen in that tech. Some of these things move, some of them are more incremental changes in improving things like battery technology and energy transmission, with greater efficiency and lower waste, the storage. All of these things very, very important to move the global economy away from fossil fuels.
Now, long-term, this is going to be very, very challenging for countries that are reliant on the production of fossil fuels. And in that regard, I think the UAE, which is looking to pump more now, but recognizing they need to diversify far more in the short- to medium-term, seems like a smarter strategy to me than the Saudis who I think believe that higher prices for longer are going to persist, and they will can continue to be the inexpensive producer of last resort. They will be, but I'm not sure that goes for as long as they are presently betting, just given how fast we're seeing government action is actually moving.
Now, of course, all of this is happening at a time where the planet is routinely breaking records and will continue to break records every year for extreme weather trends and for high levels of temperature. And of course, that means that larger parts of the world will be unlivable for longer periods of time. There will be more forced migrations. There will be more difficulty in providing agriculture for an additional billion people on the planet over the next 20, 25 years, most of whom will be in Sub-Saharan Africa, which is facing some of the greatest climate stresses. All of that is true. And particularly true is the sharp reduction in biodiversity that comes along with all of this that doesn't affect humans immediately and directly, but has all sorts of knock-on effects that we don't yet quite understand on the planet. And if you have a massive, great extinction, even if you don't know the science, you can generally suspect that there will be problems for the planet going forward, but this no longer feels like an existential threat to me.
In other words, I see out of COP26 that we have passed the tipping point of global seriousness on climate action. And so even if COP26 was not the point of no return; it was not, we either take seriously or we fail; it was not, we have to get to 1.5 degrees or its Armageddon; that was never true, but what I'm seeing is significant progress. I'm seeing a rationing up of the resources of the intense focus, maybe not of the coordination, but certainly of the urgency on a country-by-country, sector-by-sector, company-by-company basis.
And in that regard, we should come out of COP26 fully aware of just how much worse global climate will get over the next 25 years. By 2050, so much of the increase in climate change we're going to see is already baked in from carbon that we have already emitted. We are facing this cliff where 1.5 degrees is increasingly completely unreachable, and I'm not expecting that. But I am, nonetheless, more optimistic in human potential and capacity to address and respond to this challenge, the most existential, the most significant, the most all-encompassing challenge of our lifetimes that we've faced thus far on the basis of everything we've seen over the last two weeks.
So how's that to kick off your week? Maybe a little different than the headlines you're seeing other places, but I understand if it bleeds, it doesn't necessarily lead. But at least for me, I feel like it drives us a little less crazy that way. So, better to talk about what's actually going on.
Hope everyone is well. I'm on the way to Singapore and I'll see you all from there. Be good.
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.
COP falling apart doesn't mean we're failing to respond to climate: Ian Bremmer
For Ian Bremmer, on the one hand accepting climate science in the age of fake news and disinformation is a huge victory. But on the other hand, in a few days COP26 — the biggest global summit on the most important global issue we all face right now — will probably just kick the can down the road because global leadership has checked out. Still, Bremmer says this is an opportunity for the COP process to be driven in the future by other people different from the current old males that run the show.
Ian Bremmer spoke during the first of a two-part Sustainability Leaders Summit livestream conversation sponsored by Suntory. Watch here.