Davos 2020: About disparities and disconnetion in the energy and climate world

“How to save the planet” was the most mentioned topic in Davos 2020 Summit according the World Economic Forum, its organiser. This would already be a good news but it is even more impressive as it prevailed on ‘geopolitics’ and ‘future of economy’, the other two items that completed the podium and which are typically the two most-debated arguments in the Swiss Alps exclusive event.

 Topics like climate change and sustainability are emotional ones, those stimulate passion as well as radical opinions. So, their strong in-roads into the debate at the highest level, brought some degree of polarisation in the discussions in Davos, where ‘aplomb’ and ‘savoir-faire’ are generally the rule.

 In a certain way this was already evident on Monday afternoon, as the arrival in Davos was delayed by hundreds of climate activists marching on the street and slowing down the traffic (and even more surprising to see the rigid and efficient Swiss police allowing for that, a first of a kind at least for me in the last 7 years). But actually, some divisive tones continued in the discussion during the Summit among those pointing the finger against others considered responsible of the state of the planet and those more focused on practical solutions and actions.

 My impression is that Davos 2020 Summit has certified the “disparities and disconnection” between climate targets and energy trends of which the International energy Agency has been talking since a while.

There remains disparities and disconnections in the sense of urgency that the climate crisis requires; disparities in the attention put by policy-makers in the issue; disparities in views about possible solutions and, last but not least, signs of disconnections between claims coming from public society and solutions which are concretely implementable.

On an energy and climate perspective, to me the most notable absence in Davos 2020 was China. Maybe the overlap with most important national festivity, the Chinese New Year, did not encouraged a large participation from the country, but only very few years ago, China’s President – and its delegation - dominated the Summit placing the country at heart of international debate. Same story could be said for South East Asia and Africa and to a less extent, India. This means that climate and energy debate in Davos did not see the full involvement of that part of the world that is extremely crucial for creating a new energy system and addressing climate change.

 Also, it is becoming finally more evident that the climate crisis implies a huge industrial transformation, which is set to determine new winners and new losers; the rise of new champions and decline of traditional ones. In few words a completely new equilibrium.

The oil and gas industry is probably one clear example in this sense, and it is questioning its own future and measures to implement to navigate troubled waters and transform itself in a more sustainable business. To be clear this is a-must, but remain quite curious to see an industry looking at ways of evolving while what it produces and sells continues to grow inexorably.

 A second example is the “EU New Green Deal” announced just few days before Davos and largely debated throughout the Summit among those seeing it as a leading initiatives to be followed and critics considering that not the wisest way to allocate $1 trillion fund. Both sides have arguments: if the plan is purely conceived as a way to reduce continent emissions, it might be more efficient to allocate those money in other parts of the world where results would be significantly higher. But if the $1 trillion plan has an ‘industrial-revolution’ soul, this could contribute in addressing a fundamental question of energy transition: ‘becoming sustainable while remaining relevant’. This is one of key preoccupations of the European car industry (and other energy intensive industries) that is facing the transition towards electric and the potential implications to this associated in terms of competitiveness, jobs and social tensions.

 Finally, the financial sector: since years, any climate change or energy transition conference strongly debates about the proper involvement of investors in the process. In Davos, the leaders of financial institutions, insurances and banks took the centre of stage in sustainability and climate change debate. While this is extremely encouraging, there remains a huge amount to work to do. The financial sector appears genuinely interested in participating to the energy transition but the changes in expectations, culture and business models required will not happen overnight.

Also for this sector the historic challenge is “becoming sustainable while remaining relevant (and profitable)”.

 Overall Davos 2020 represented a very encouraging start of the year. No final decisions were taken, but Davos is not the place for decisions, while it is for discussions and for steering the world’s agenda for the rest of the year. In this sense, celebrating its 50th Anniversary with sustainability and climate change as key topics, makes Davos Summit a huge step for all of us and - to a certain extent - make the exclusive sky-resort gathering much closer to what the people is demanding for.