Why COP25 Failed And How To Fix It

In Capitalism 2.0 - Part 3, I covered the enormous challenges and opportunities linked to Climate Change. There is no doubt in my mind that Climate Change has become the most galvanizing issue across the world and the loudest call to action. In particular, I emphasized how young and old, liberals and conservatives around the world are silent no more. And it all happens as a result of ever more devastating floods, fires, hurricanes, and tornadoes. And it’s a true multi-generational outcry, too... 

And yet, despite the global awareness of Climate Risks, two weeks of talks in Madrid ended with little to show for, and no meaningful progress on setting the new emissions targets.

In my mind, there is only one way to explain the disturbing lack of progress at the 25th summit of the UN’s Conference Of the Parties (COP25). To me, it is all due to a lopsided blame game and the lack of focus on the root cause. Such regrettable practice prevented the world from adopting more ambitious carbon targets.

Yes, there is a famous saying about finding a pattern - and it goes like this: If something happened Once - perhaps it’s a random event. And if it happened Twice - perhaps it’s a coincidence. But if it happened Three Times  - it’s a PATTERN!

So, what are we to do when the same outcome happens 25 times? It’s time to reassess the current strategy to fighting Climate Change, or brush-up on Einstein’s definition of insanity...

One quick look at the global trends indicates that not all the continents demonstrate the same CO2 emissions trends. While North America and Europe are reducing the overall emissions, countries in Asia do not! And yet, most of the emissions criticism is oriented squarely toward N/A and Europe! https://globalcarbonatlas.org/en/CO2-emissions

Better yet, the numbers don't lie. We can clap our hands all we want to the "imagine-the-future" narratives from the biggest polluters such as China, India, Russia & Iran. They all INCREASED their emissions from last year, while countries such as Canada actually reduced it by 0.1%. So, it’s time to stop the generic and indiscriminate blame-game, and to focus on the biggest polluters and trend-setters, instead. https://globalcarbonatlas.org/en/CO2-emissions

I agree that Climate Change and Climate Risk is a global problem that needs a global solution. Yet, unless we see the conscientious pension funds divest from global companies located in trend-setting countries such as China, Russia, Iran & India instead of targeting Canada, Norway, and Australia - it's a lopsided and blatant bias that does NOTHING to mitigate the risks! https://globalcarbonatlas.org/en/CO2-emissions

Granted, it’s much easier to organize a demonstration in Madrid, Toronto, New York, Oslo, or Sydney - instead of protesting in Beijing, Tehran, New Delhi, or Moscow. Not only it is easier to demonstrate within the Western democracies - but it’s also less risky. And you’re not going to be thrown in jail in Toronto or executed in front of the cheering spectators.

Chances are that you will also not see bare-chested Greenpeace activists throwing themselves on the swords of the polluters in Beijing, Tehran, New Dehli, or Moscow - the same way you will not see them launching court battles there. However, in countries like Norway, it’s a different story - all the way to the supreme court, baby...

So, perhaps the real reason for not making progress at COP25 is based on the lack of rewards and the positive reinforcements toward the countries that demonstrate conclusive progress. Especially, when there is also not a single penalty targeting the countries that move in the opposite direction. 

Personally, I’m not surprised. Deep down, we all believe that the same rules should apply to EVERYONE. And the moment the fairness is lost, the process is doomed.

My advice: bring back the penalties AND rewards. Carrots and sticks help to restore the balance... 

Now, Norway is a great example of a true paradox gripping the hard-core environmentalists. It’s the country with the highest share of electric cars in the world (8%) and nearly half the cars bought by Norwegians in 2018 were electric. It has a COMPLETELY (100%) green grid thanks to its hydropower and a goal of reducing emissions 80-95 percent below 1990 levels by 2050. Any way you slice it, it’s a truly enviable position by any standards!

And yet, all this is not enough. Since Norway is also the seventh-largest exporter of oil and gas worldwide with more than $26 billion in annual petroleum revenue - its strong domestic climate policy is often dismissed. Despite the fact that oil and gas account for about half of the country’s exports - which pay for Norway’s domestic climate change policy. In addition, let’s not forget that such an industry also employs almost 200,000 people there...

Moreover, critics are often highlighting the fact that despite Norway’s stellar domestic record, its oil and gas is being burned somewhere else around the world. So, from a global perspective, it’s irrelevant where it happens. The emissions are still contributing to the global climate emergency.

Well, if we are looking at the GLOBAL picture then where is the uproar about the biggest GLOBAL polluters I mentioned before, namely: China, India, Iran, Russia, etc. I’m sorry, but you can’t have it both ways. Global ledger means global entries, too - so call a spade a spade...

So, if Norway, the country with a 100% green grid is still being demonized, what chance does Alberta have to escape the assaults? The answer: ZERO - since 80% of Alberta's grid energy is derived today from fossil fuels. Even if Alberta miraculously flips the switch and starts producing 80% of its grid energy from renewable resources - it will not suffice.

And this is exactly where I see COP25’s biggest flow: the lack of recognition and praise of incremental domestic improvements!

While training neural networks more than 30 years ago I learned the power of reinforcement. This is what supervised learning is all about. In order to train a Back Propagation neural network to recognize a pattern, one needs to reinforce the positive outcomes and strongly inhibit the negatives.

Fighting Climate Change is no different. We need to strongly reinforce the positives, however small, and at the same time criticize the negatives. And it seems to me that we are not doing enough of both!

Provinces like Alberta need help in reducing fossil fuel emissions and any improvements need to be recognized and reinforced. The more the better. Imposing Carbon Tax has a negative effect since focusing on the shortcomings doesn’t enable learning. It impairs it the same way the lack of courage in confronting the biggest polluters does...

Oleg Feldgajer is President & CEO of Canada Green ESCO Inc. Oleg is positioning the company to become a leader in financing AI-enhanced green energy projects and ventures. CGE’s mission is to guide DISRUPTIVE businesses in ENERGY & TRANSPORTATION toward profitable business models. Oleg is passionate about such a mission and firmly believes that without AI-based innovation, we will all prematurely choke on polluted air and dirty water. CGE delivers 100% financing (levered and unlevered) to its clients - and utilizes large equity pools, and non-recourse debt. Oleg offers creative, fresh ideas to open-minded businesses - that embrace both: logic AND opportunistic intuition. CGE stands against mediocrity & its modus operandi is quite simple: If CGE is not invited to join your BOD or Advisory Board – we failed!