Earth Day 2021 marks a historic moment for action on climate change. Today, at President Biden’s unprecedented Leaders Summit on Climate, he put forward an ambitious national commitment from the US to help the world tackle the climate crisis – to halve greenhouse gas emissions from the country by 2030 compared to 2005.
Combined with existing commitments to achieve net-zero emissions by 2050 from the EU, the UK and other major G20 economies including Japan and the Republic of Korea, as well as a commitment from President Xi to peak China’s carbon emissions by 2030 and achieve carbon-neutral growth by 2060, governments representing over 60% of the world’s greenhouse gas emissions are now committed to net-zero emissions goals, the majority by 2050.
There is still much diplomatic work required to close this commitment gap ahead of the COP26 climate summit in Glasgow in November, but a major political turning point on climate action has undoubtedly occurred.
The additional challenge is to now turn these political commitments into practical action, especially to get on track with emissions reductions by 2030.
Turning commitments into action
This is where the second important turning point on climate action comes into play. Alongside national governments, many global companies, cities, states, and regions are also pledging climate action. More than 1,000 corporations, for example, have now made net-zero commitments, and a United Nations-convened group of investors called the “Net Zero Asset Owners Alliance” now has more than $5 trillion of assets under ownership committed to net zero emissions by 2050 or sooner. These “non-state actor” commitments (to use United Nations language for everyone who is not a government), often come with practical roadmaps, investment plans and partnership strategies, to help the CEO be clear on how action will be delivered in the next few years.
Biden’s new national strategy for climate action would bring an “all of government” approach, which would also help scale and accelerate non-state actor efforts in the US: effectively stimulating a “win-win” public-private scenario for climate action. The European Green Deal and the recently released 14th Five Year Plan in China also offer green industrialisation and investment strategies, leveraging government capabilities to promote partnerships with industry to help meet climate goals.
These plans also reflect a more broadly interventionist mood among the major governments to stimulate a sustainable and resilient post-COVID-19 economic recovery involving technology, job creation and action on climate. The aspirations of the G-7 and G-20 Presidencies for 2021 reflect this.
Consequently, the transition to get on track for net-zero emissions may now be viewed through the perspective of a unique, decadal effort of public-private cooperation – a once in a generation push for an energy, industrial and agricultural systems upgrade, boosted by the need for a post-pandemic economic stimulus.
This helps sharpen the frame for climate action to 2030.
We know we have 10 years to get on track. We know we must remove about 25 billion tonnes of CO2 equivalent of greenhouse gas emissions in that time. We know the key sectors of the economy we must focus our relative efforts on.
We know the levers of technology innovation, investment and policy that must be pulled. And we can increasingly see the value creation this transition can create, as costs of renewable power collapse in relation to fossil fuel options, and as innovations advance many new climate-smart products and services.
We can see investors and markets around the world responding. Values are rising for green innovation, climate-smart companies and green or ESG investment funds. And consequently, we also know the transition risks we need to mitigate as we make the shift – the transition in jobs and skills for example, and the need for more comprehensive standards, reporting and accountability frameworks to help show which companies are taking action and managing climate risk best.
The UNFCCC Climate COP “Champions” – who focus on helping to mobilise non-state actor effort – have even usefully broken down the economic and industrial areas required for transition and action into twenty-eight specific Breakthrough Ambitions that need to be achieved across the global economy by 2030 to get us on the pathway to net zero emissions by mid-century.
The public-private agenda for climate action has never been clearer.
Delivering on the climate action agenda
This is why climate ambition and the net-zero transition is a central pillar of World Economic Forum activity through our Platform for Climate Action. As the international organisation for public-private cooperation, our story to governments since 2008, ahead of the Copenhagen Climate COP, has been consistent: that climate change is a key global risk; and that the challenge of taking climate action can effectively be broken down into a set of major multistakeholder (or stakeholder capitalism) programs of public-private partnership, each leveraging public sector support to unlock innovation, growth and value-creation from the private sector. More recently, the potential to harness Fourth Industrial Revolution technologies can be added to this agenda.
What’s the World Economic Forum doing about climate change?
Today, our portfolio of public-private initiatives on climate action is delivering on this agenda. They include working with industry leaders, investors, innovators and governments to trigger the net-zero transition in key industrial sectors like energy, aviation, shipping, trucking, steel, chemicals, aluminium and cement, through the Mission Possible Partnership and Finance For the Transition; and working on net-zero, nature positive food and land use partnerships including the Tropical Forest Alliance, 1t.org, Grow Asia, and Friends of Ocean Action.
We offer public-private support to international efforts like COP26 and the UNFCCC Climate Champions, the Clean Energy Ministerial, Mission Innovation and G7 and G20 processes. We use our own digital platform and major events, including the Special Annual Meeting in Singapore, the Davos Annual Meeting, and the upcoming virtual climate event in May to help advance these efforts and invite more in. We also promote the efforts of technology innovators, young people and social entrepreneurs around the world through scaling circular economy solutions for climate, and through UpLink; and we are proud to host and support the world’s leading community of CEOs committed to climate action, the Alliance of CEO Climate Leaders.
All these activities, and more, form a unique package of stakeholder capitalism, public-private cooperation and harnessing the Fourth Industrial Revolution, designed to help governments, companies, and civil society to accelerate climate action and be on track for a net-zero and nature positive economy by 2030.
Spurred by President Biden’s Leaders’ Summit and its announcements, and the potential it raises for the forthcoming Glasgow COP26, let us ensure history looks back on 2021 as the turning point year when climate action truly became seen as a decadal programme for breakthrough public-private action.
*Dominic Kailash Nath Waughray, Managing Director, World Economic Forum. The views expressed in this article are those of the author alone and not the World Economic Forum.