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Analysis | There is progress on the climate front, just not fast enough

Remark

This year’s United Nations climate conference in Sharm El-Sheikh, Egypt – COP27, the latest in a series dating back to 1995 – won two important victories.

First, there was a hard-fought agreement to begin compensating poorer countries for damage from years of greenhouse gas emissions by the rich world, which the US had long resisted. The ethics of the “loss and damage” issue has never been questioned. Rich countries have already expelled almost all the carbon the atmosphere can handle if climate change is to be halted. They owe the poorer countries generous aid to deal with the consequences. But it’s critical that new resources are channeled in a way that helps reduce future emissions.

The principle of disproportionate responsibility recognized at COP27 can and should guide rich country governments in broadening their approach to the problem, for example through the role of multilateral development banks in supporting climate-related investments.

While many COP27 observers praised the agreement, others focused on the failure of countries to take faster action to limit warming. Of course, it would have been better to do more as the world is still on course for devastating levels of warming. But the deal is an important advancement – ​​and suggests that the kind of coordinated action needed to avoid the worst climate change scenarios should still be possible.

The second victory at COP27 was not a formal agreement between nations, but rather a growing acceptance by them of a crucial idea – that the fight against climate change cannot be won without a much more robust mobilization of private capital – and a growing willingness to act. working on it.

While the meeting was going on, a group of countries led by the US and Japan announced a $20 billion financing package to support Indonesia’s plan to shift from coal to renewables. This was a groundbreaking deal, not only because it is one of the largest climate finance packages ever put together, but also because it is in partnership with a country that has huge coal reserves and gets 60% of its energy from coal.

The agreement would not have come about without the leadership of Indonesia and the G-7 countries, along with Mark Carney and Mary Schapiro of the Glasgow Financial Alliance for Net Zero, a group that Carney and I co-chair many of the the world’s largest financial institutions. companies and asset managers. And it creates a model for helping other countries that rely heavily on coal transition to clean energy – a transition that will not happen through government action alone.

At COP27, Bloomberg and Bloomberg Philanthropies announced several efforts to increase private sector investment in clean energy, particularly in developing countries. That includes a new data portal that will give companies the information they need to deliver on their net-zero promises — and give the public the information it needs to hold them accountable for doing so.

Many countries have committed to achieving net-zero carbon dioxide emissions by 2050. If all governments committed and kept their promises, the target adopted in Paris in 2015 to limit future warming to 1.5% would be within reach. But many big emitters are still not on board, and those who have made net-zero pledges are still not fully aligning policies with the pledges. This can only be changed by involving the private sector, a mission that was hardly on the agenda in Paris in 2015, but is now on the rise.

At COP27, governments were urged to “revisit and strengthen the 2030 targets in their national climate plans by the end of 2023, as well as accelerate efforts to phase out unabated coal power and phase out inefficient fossil fuel subsidies.” That’s critical, but actions are what count, not words – and actions still fall short.

The world needs to invest more ambitiously in renewables and other technologies, phase out fossil fuels more quickly, and improve coordination of such efforts by pricing carbon emissions to reflect environmental damage. There is nothing for it but to push tirelessly for such steps, using the private sector as an ally.

An energy transition as far-reaching as global warming is a huge undertaking. It cannot be done all at once and it requires cooperation between all the governments of the world – and the private sector as well. COP27 shows that progress is possible.

Investments are being made in the future of the planet. With more investment – ​​much more – a climate catastrophe can still be avoided.

Michael R. Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News, UN Special Envoy for Climate Ambition and Solutions, and Chairman of the Defense Innovation Board.

More stories like this are available at bloomberg.com/opinion

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