A Perfect Storm is Brewing for COP21

With less than one month to go until the most important climate conference of our time, the United Nations COP21, more and more news, opinions, and research reports, are being released every day. With this plethora of information it's easy to lose track of what's relevant, and understand the importance and meaning of the rapidly changing global economical, financial and political dynamics before COP21.

Therefore, every day until the start of the conference on November 30th, I will write a daily analysis of the three most interesting climate business, finance and politics stories published on the web. The objective is simple: to inform, educate and inspire corporate, finance and institutional professionals with positive stories about what's possible, so that they understand the opportunities arising from a global deal on climate change, and how they should prepare themselves for a post-2015 world.

To get us started, I've decided to name the first post: A Perfect Storm is Brewing for COP21. The reason is simple. Yesterday, I received at least 10 relevant stories that indicate that the world is preparing itself for a global deal in Paris this December. We are truly entering a perfect storm of business, financial and political consensus and actions on tackling climate change.

The first story comes from CDP and its latest annual report on corporate carbon emissions disclosures. It reveals the extent to which corporations have shifted their strategies over the past five years to become part of the solution to the climate challenge. What is even more telling is that the report indicates that we have passed an important climate business Tipping Point. Indeed, 89% of companies have activities to reduce GHG emissions compared to less than 50% five years ago, before the ill-fated COP15 in Copenhagen. This means that almost 9 companies out of 10 have decided to confront climate change seriously, and measure their carbon emissions accordingly. And in business, what gets measured gets managed, improved and done.

Secondly, from the finance world, Goldman Sachs, yesterday announced it was going to increase investments in clean energy to $150 billion over the next decade, multiplying its previous amount in that sector by four. Imagine if every investment banks quadrupled their investments in clean energy, we would easily surpass the $100bn/yr needed to tackle climate change. This clearly shows the growing appetite for clean energy and the continuing decline of divestments from the fossil fuel industry, as demonstrated by Sierra Club's report yesterday on the record shutdown of coal plants in the US. 

“The market could become much bigger” as countries like China follow through with plans to turn to more environmentally friendly sources of energy, said Kyung-Ah Park, a managing director in Goldman’s Environmental Markets Group.

The Goldman Sachs announcement is also complemented by another new report from Fossil Free Indexes. Their most recent analysis indicates that if you had divested your money, over the last 10 years, from companies that are among the Carbon Underground 200 (companies that have the largest as-yet-untapped reserves of coal, oil, and gas), your investment returns would have been an extra 1% higher per year. Thomson Reuters covers that story here. 

Other interesting stories to inaugurate and complement this Perfect Storm for a global deal on climate during COP21:

• The Ecologist has a story on the growing demand and need for battery storage to complement renewable energy.
• Bloomberg has an opinion piece about the economics of climate change and the need to have a real and ambitious carbon price.
• The EU will release €350m until 2020 to help developing countries tackle climate change through a new initiative called the Global Climate Change Alliance.
• The World Health Organisation released a report on 19 political solutions to tackle short lived pollutants
• Climate Home reports that countries are currently meeting in Dubai to phase out super warming HFCs.
• The luxury group Kering published a report on tackling climate change and the fashion industry. 
• And to top it off, a wonderful story about a new invention The Plant Lamp from a Peruvian University (UTEC) using the power of plants to create electricity. Here is their video to get you inspired.

   

A global deal for our climate beckons.