The 26th UN Climate Change Conference of the Parties (Cop26), to be held in Glasgow from October 31st to November 12th, is widely seen as the most significant such event since 2015’s Cop21 in Paris. According to Mike Hayes, KPMG global head of climate change and decarbonisation, this is due to a new appreciation for the reality of the climate crisis.
“Cop26, the conference of parties, brings together all key global powerbrokers and influencers in relation to the climate agenda,” Hayes says. “Climate wasn’t central to the global agenda at the time of Paris 2015, but it is now seen as the single most important issue facing the world today.
“The seriousness and immediacy of the climate disaster has now become apparent. It is seen as a much greater global threat than the pandemic. In reality, the Covid-19 response has been a dress rehearsal for how we address the climate crisis.”
Hayes believes the pandemic has taught the world some lessons about the need to prepare for disaster.
“Twenty months ago, the world wasn’t ready for the pandemic, and it took a while to take action. At least we were able to produce a vaccine to Covid-19 – that is not an option for climate change. But recent weather events and reports, including the IPCC code red for humanity warning, have brought home the immediacy of the crisis.
“It is the one issue that unites governments around the world. They may disagree on the specifics, but they all agree on the need for action. Cop26 is a really, really big deal. There is much anticipation about the possible outcomes. Everyone knows we can’t afford to fail.”
Wide-ranging agenda
While the agenda for the two-week conference is wide-ranging, Hayes cites three areas as particularly important: innovation, mobilisation of capital, and people.
There is also the matter of making good on the Paris promises.
“Article 6 of the Paris Agreement calls for consensus on a common methodology and approach to carbon pricing around the world,” he says. “It would be wonderful to achieve that at Cop26. They will struggle to achieve it, but I am hopeful for some advancement and that they will get it done in the next 12 months.”
On innovation, Hayes says the United Nations Framework Convention on Climate Change (UNFCCC) will announce the establishment of a green innovation hub during the conference.
“This announcement, for me, will be the single most important thing to emerge from Cop26. It will catalyse innovation in a way never seen before. We won’t get to net zero by 2050 without innovation. The green innovation hub will be a platform to bring together investors, capital, scientists and industrial players to catalyse large scale climate action.
“KPMG has been championing the concept for the past 12 months,”he adds. “We are going to support the UNFCCC in making it a reality, and I will be working on this initiative over the next year.”
Hayes points to direct air capture as an example of innovation’s role in tackling climate change.
“A Swiss company, Climeworks, has developed a direct air capture technology to remove carbon dioxide from the air and store it permanently underground. Microsoft recently announced that it is adding the Climeworks solution to its carbon removal portfolio.”
The continuing failure to mobilise capital to support climate action in emerging markets despite the commitments made in the Paris Agreement will also come up for discussion at Cop26.
“This is a really, really critical issue. There are a bunch of risks that investors won’t take in emerging markets. These include political risks, foreign currency and land ownership risks, and so on. We need to overcome that.
“Even today in late 2021, a billion people around the world do not have access to electricity. Providing that access would have a huge impact on health, education, poverty and a whole range of other aspects of people’s lives. We need to mobilise capital to address issues like that in ways that don’t harm the planet.”
There is a lot of talk about making the cost bearable, but there is a human cost as well as a financial cost
Hayes is scheduled to speak at Cop26. One of the questions he will address is how people are being considered in the climate action debate.
“Organisations are not going to succeed in decarbonising if they do not bring their people along with them,” he says. “That will require re-education, retraining and reskilling of people on a scale never seen before. And it’s not just the education system of governments who will need to engage in that. The corporate world will have to engage on a huge scale to re-educate and retrain their people.”
There is also the more serious matter of those in danger of being left behind in the net zero transition.
“There is a lot of talk about making the cost bearable, but there is a human cost as well as a financial cost. Stranded people could be a far worse problem than stranded assets. We need to consider people in all of our equations to make sure they don’t get left behind.” This needs to be an inclusive transition.
There is also a need to consider the near-term impacts of climate change on human health.
“Climate driven health problems such as air quality deterioration need to be addressed,” Hayes contends. “Melting permafrost is releasing dangerous pathogens. We have to understand that climate change has physical, financial and health impacts.
“There is no longer any room for delay or prevarication in relation to climate – we need action today.”