While water seemed inexhaustible almost everywhere in Europe, climate change and the increase in periods of drought have made a scarce commodity a critical resource. To tackle the crisis, major investments are needed, as well as a profound change in our consumption habits.
2023 will be a year of unprecedented policy support.
The Inflation Reduction Act (IRA) was signed in law by President Biden on 16 August 2022 after House Democrats approved the biggest-ever federal investment against climate change with a 220 to 207 vote. The package targets USD 369bn of spending on energy and climate change. To illustrate the monumental size, some are pointing out the spending will be four times more than Obama’s Recovery Act of 2009 for climate initiatives. The impact will be far-reaching – even pushing some technologies, in our view, past tipping points. The legislation aims to cut emissions by at least 40% by 2030.
The Sixth Assessment Report on climate change from the Intergovernmental Panel on Climate Change (IPCC), the third part of which was published earlier this month, has not been an easy read. Global CO2 emissions rose by +6% to 36.3bn tons in 2021, more than offsetting the reduction in 2020 due to Covid-19. The sustainable recovery much touted by governments has so far yet to come to fruition.
The development of the Clean Energy sector has historically been significantly impacted by previous energy crises. The war in Ukraine and its major impact on energy markets will be no exception. Sadly, it took a tragedy at our doors for us to come to realize that renewables and energy efficiency are not only about climate change, but also about our independence, freedom, and future prosperity.
While global leaders convened in Glasgow to achieve a low-carbon future, we can reflect on a very different picture in current energy markets.
There are mixed feelings coming out of the COP26. On the one hand, there were multiple new agreements and declarations that progress in the fight against climate change. On the other, they do not yet go far enough: we’re only just keeping the 1.5°C scenario alive. Pre-COP 26, we were on course for 2.7°C warming and the announcements during the conference put us somewhere between 1.8 °C and 2.4°C, depending on which study and organisation you believe. Of course, the devil is in the detail and the implementation. There is an enormous amount of work to be done to convert these commitments into action and to work out how these commitments will be policed.
While the financial sector is often accused of greenwashing, it is important to remember that responsible investments can only be made with truly sustainable companies. This is why sustainability reporting standards for companies are essential.
It has been over a year since our daily lives were modified by the COVID-19 pandemic. The shutdown of our countries’ activities has already had heavy effects on the economy, education, mental health, and has brought to light models that are probably here to stay, at least in some forms.
December 2020 was the fifth anniversary of the Paris climate accord, marked by a climate summit held in the UK with 70 world leaders. In advance of this milestone, the UK threw down the gauntlet to other countries by elevating their emissions reduction target to 68% by 2030 compared to 1990 levels, 11% higher than the previous target. These targets are considered the second toughest in the world, following only those of Sweden.