Way Off Track! Planet Earth still on Life Support

[At COP26] We achieved more in that than many people that start thought was possible. Let me give you some highlights.

We managed to get over 90% of the global economy to sign up to Net Zero. Every single G20 country. When we took on the role of organizing COP26, we were at below 30%. We managed to get financial assets to the value of $130 trillion signed up to invest in net zero.

We got over 5,000 big international businesses to sign up to the UN’s Race to Zero campaign – committing to go to net zero. And that number, by the way, is growing to 8,000.

Success after stress

For the first time ever we managed to get language on phase down of coal. And those of you who may have seen this two years ago will know that was a big wobble at the end. It was the most stressful time I have ever had. Because it just needs one country to walk away from agreement and the whole thing falls.

But we did. We managed to get language on phasing down coal into this. And what I am really proud of is that this was the first COP where we had huge business representation. And some of you I know were there because you’ve told me. And I hope many of you will also go to COP 28 In Dubai.

And if you add all these commitments up – and if they are delivered – and that’s the key thing here. Commitments are difficult, but delivery is even more difficult. If they are all delivered then we’re heading towards 1.8 degrees of global warming above pre industrial levels.

Now, many of you will know that in the Paris Agreement in 2015, the world agreed that we will limit global warming to 1.5 degrees to avoid the worst effects of climate change. So 1.8 … this is not a picnic for millions and millions of people across the world. Actually it’s quite the reverse.

And what it does need is for countries to go forward and deliver on their commitments - and the corporates to deliver.

Everything is even more fragile

And that’s why I said in Glasgow that we had a fragile win and that 1.5 was on life support. And that continues to be the case.

So why did all these countries sign up despite all the differences that they had? I think there are three reasons.

One is collective self interest. I went to over 50 countries physically in the middle of COVID, many of them twice, sometimes three times, some of them even four times - to push governments to make commitments. And the reason they did it? They can see the impact on their own countries: on lives, on livelihoods, on infrastructure of global warming or worsening climate.

The second is they recognise the science. And we heard reports from Sweden, the inter government Panel on Climate Change, the IPCC, which represents people from basically every country in the world, have been very clear. Human activity is unequivocally the reason that we are seeing global warming. And they understood that.

The third is cost. You see this in your own businesses. If you’re in the insurance sector, you can really see the impact of a change in climate and what that means.

Huge negative economic impact looms

But the estimates are that unmitigated climate change could lead to 20% a year coming off global GDP. That’s an estimate from my friend Lord Nick Stern. He sits in our House of Lords and is an eminent economist.

In the UK, there is an estimate by the Office of Budget Responsibility, that unless we get to grips with this issue we’re going to get to a point by the end of the century where national debt is going to be around 300% of GDP.

Now, look, I’m a conservative, I don’t know what your sort of politics is. But actually, it shouldn’t really matter. Because that is not a legacy we want to leave for our children and our grandchildren.

The final piece of this is that there are lots of risks out there. And I’m afraid they get worse because of climate change. Water security. Food security. In this country in the UK we import a significant amount of food.

You see what happens when harvests fail around the world. That has an impact on food inflation. We’ve seen that in our shops, and that continues.

Millions of people on the move

The impact on migration. Right now in the UK we’re having a discussion and debate of how we deal with illegal migration coming across the channel. We’re talking about tens of thousands of people a year.

Can you imagine what will happen if parts of the world become less and less habitable. You’re going to have millions of people on the move. And they are going to move north. And that is going to impact countries like the UK, countries like Sweden. Just in the last year the estimate is that there were more people in the world displaced because of climate than because of wars.

And the final is an issue of physical security. If you have a look at what terrorist groups like ISIS and Al Shabaab have been doing, they are literally using the changing climate and the scarce resources as a recruiting tool. And that has an impact on us as well because of increased terrorism.

So all of this is a huge cost. And that’s why when Nik talked about fact that the cost of inaction is way greater than the cost of action that is something that governments and businesses have to recognise.

So where are we now? We know that we are at 1.2 degrees of global warming above pre industrial levels. The warnings keep coming, you just have to turn on your TV, and you see what is happening around the world. This, friends, was the hottest summer on record across the world. Last year in the UK for the first time, we had wild fires breaking out outside London. Sadly, people losing their lives.

‘Get a grip’ on new realities

I was in the UN General Assembly last year and I met the Pakistani minister. She had just experienced a third of her country underwater because of the climatic event. What do you say? A third of the country is underwater. That’s basically the size of the United Kingdom.

It’s a very, very difficult conversation to have. And I’m afraid that is going to increase unless we get to grips with this issue.

So moving on to what we need to do, where are we with all of this? At COP28 we to reduce emissions by over 40% by 2030 at 2019 levels. And there are a number of things that we need to deliver here.

The first is there’s been a stock take. The world has looked at all the things that we said we will do. And where are we now?

Well, we are way off track.

Why so slow?

Yes, we’ve seen a big increase in renewable energy and clean energy around the world. And yes, we’ve seen a big push on electric vehicles. But we’re just not going fast enough.

So the first thing I think we need to see from governments is a response to the stock take. Higher targets. Better targets. But also sector plans. And actually, this is where I think the business community needs to play its part as well.

It’s no good saying I’m going to cut my emissions by X percent by 2030 or 2050. How are you going to do that sector by sector, transport, energy, agriculture, you name it! And you’re part of making this happen.

Needed: clarity, regulations and cash

The second thing that we need to see is commitment from governments to triple the amount of renewable energy installed by 2030. And why does this matter? Because 75% of all emissions in the world are energy related. Right now, this year, we’ve got about 1.7 trillion going into clean energy across the world. And that’s great. That’s an increase from one trillion five years ago.

But actually, it needs to be two and a half times that by 2030. And keep that pace every year. And if you strip out the investments in China … I’ve just been at the African climate summit in Kenya. President Ruto talked about the fact that you’re gonna need six times the pace in countries like Africa where the big energy needs are going to be. Unless they go clean, I’m afraid things will become very tricky.

We also need to get some language on phasing out fossil fuels. As I said, 75% of emissions are energy related. Unless you deal with that, and you tackle that head on, I’m afraid things are gonna get worse.

And finally, there’s the issue of finance. It’s going to need $125 trillion. And that’s going to come from the private sector to deliver a Net Zero economy by the middle of the century. And we need to make sure that we get the multilateral development bank’s [MDB’s] doing more in terms of their balance sheets delivering more money. We need to make sure that we get the private sector to invest. And that’s going to be part of the discussion.

Governments must lead …

So the final thing I just want to say to you is: that’s all very well, for governments to be to be asking these demands. But what is it that governments need to do for you?

The first thing is that issue of political consensus in any country. And we do see that fracturing in some countries. And by the way, I’ve been pretty vocal about the speech that the Prime Minister made a few days ago [20 September 2023].

But I do believe that we are maintaining that political consensus overall, because we have that enshrined in law [in the UK]. Net Zero is enshrined in law. Our carbon budgets are enshrined in law. We have to deliver on that.

The second thing is that you want long term policy signals and some stability in terms of the policies that we put in place. And of course, you’ve heard my views some of you on that where I think we have gone recently in the UK. When it comes to, for instance, electric vehicles, you are investing for the long term.

I think it’s absolutely vital that governments wherever they may be, have to make sure that they stick to the policies that they put in place.

Thirdly, investment in the infrastructure, particularly the grid. There’s no point saying we’re going to expand renewables unless you get the grid up and running. And that’s as important in this country as it is in any other.

Planning reform: absolutely vital. There’s no point saying we need to get to Net Zero by 2050 if its going to take years for any projects to actually get built.

And finally, there’s financial incentives. We’ve got this huge incentive in the US with the Inflation Reduction Act. You have got the Net Zero act in the EU. I personally think that in this country we need to see a bigger response from the UK Government on this.

That needs to happen. It should be about carrot rather than stick encouraging businesses to invest and that needs incentives.

Public concern is clear: leaders must not ignore it

The very final thing I’ll say is, there is an electoral issue here. People across the world, whether they’re in the UK or in Sweden, and you see this in polling, they care about this issue. They want governments to act. They want businesses to act.

So my message to you as a business community is wherever you happen to be based. And many of you are part of multi nationals. Make sure you talk to your governments. Tell them it’s vitally important that they deliver on this and that the investment that you make is dependent on that. And I think if governments get that message, they will absolutely act. Thank you.