@Green May/June 2024 | Page 21

May-June . 2024 | @ green

Could this be why some aspects of the climate change debate are being scrutinised ?

SPRINT TO NET ZERO IS SLOWING DOWN

Since the Paris Agreement ( a legally binding international treaty addressing climate change mitigation ) was signed in December 2015 , policies have been drafted , debated and adopted . Governments and industry have mobilised , and macro initiatives like the European Green Deal and the Inflation Reduction Act of the United States have been rolled out . Even smaller nations have formulated frameworks to great fanfare . Everyone has wanted to do something , anything , for this great cause . But after almost a decade of political intervention , social action and media coverage , reality is biting in . Europe , the leader in promoting the Climate Change Agenda is currently seeing resistance to green policies in a phenomenon dubbed “ greenlash ”. In the last European elections five years ago , young voters demanded action against climate change . Not so this time around . The BBC recently reported that against a backdrop of rising energy prices and an increased cost of living crisis , many Europeans have turned against abandoning fossil fuels , spelling trouble for the EU ’ s Green parties .

European farmers are also staging an agricultural uprising . Since late 2023 , they have protested , challenging low food prices and proposed environmental regulations ( such as a carbon tax , pesticide bans , nitrogen emissions curbs and restrictions on water and land usage ). Their protests have been particularly disruptive , blocking roads with heavy farm machinery , dumping manure on public roads and burning tyres in villages .

The negativity has not been limited to countries in Europe . On Jun 6 2024 , the Financial Times based in New York reported that global investors were turning their backs on sustainability-focused stock funds and enthusiasm for a much-hyped sector that had pulled in trillions of dollars of assets was diminishing . The outflows also marked a significant reversal of trends for a sector that investors had flocked to in recent years , attracted by the claim that such funds could help change the world for the better while also making as much — or even more — money as traditional stock portfolios .

AN ESG DOTCOM BUBBLE ?

The report from the Financial Times also carried a quote from Pierre-Yves Gauthier , Head of Strategy and Co-founder at AlphaValue , a Paris-based independent research company . He compared the sector to the tech bubble that burst in 2000 . “ ESG was a dotcom sort of hype 20 years later and now it has passed ,” he said . Many funds have been hit by the poor performance of sectors such as clean energy , while they have also missed out on strong returns from fossil fuel companies that they actively avoided . A survey from global management consulting firm EY corroborated the report from the Financial Times . The EY survey results released on May 30 2024 polled 1,200 executives across the globe and found that 23 per cent had deprioritised their focus on sustainability , compared with a year ago .

At the thought leadership levels , the messaging is again mixed . In early June 2024 , the incoming President of the COP29 UN climate

Figure 2 – Competitive Forces – Climate Change .

summit ( to be held in Baku , Azerbaijan in November 2024 ), Mukhtar Babayev , told AFP that his country would keep increasing fossil fuel production “ in parallel ” with investments in cleaner alternatives . During the same week , the Secretary General of the United Nations , Antonio Guterres , renewed calls for countries to “ phase out ” fossil fuels . In New Zealand , a decisive U-turn . On Jun 9 2024 , the New Zealand government announced that it would introduce legislation to remove a controversial ban on offshore petroleum exploration to attract investment to the country ’ s oil and gas sector . The bill would end the ban , which had been in place since 2018 .

In summary , Wall Street is shaking its head at ESG-based projects , claiming they do not deliver returns that justify investment . Politicians are implementing policies that are becoming increasingly unpopular as their economic realities bite . Nations are facing long-term energy security of supply issues . The industry is unsure which path to take , so it is hedging its bets and “ greenwashing ” until ‘ true north ’ has been defined . The hype around Artificial Intelligence ( AI ) promises an improved quality of life but requires vast amounts of energy . In the meantime , the fossil fuel industry , the only reliable source of energy security at this time , remains underinvested , keeping energy prices relatively high . Against this fragmented backdrop , scientists claim that the planet is being irreversibly damaged and there is an existential threat to humanity .

What would be a sensible and responsible position to adopt with all these contradicting trends ? This is the question I have posed to myself .

THE REALITY - ON THE BALANCE OF PROBABILITIES

It is not disputed that a reduction of emissions is a very significant and desirable goal to be achieved but in pursuing this agenda , the needs of all stakeholders must be considered , from the least prosperous to the most-wealthy , whether one lives in Beverley Hills or in one of the 45 countries that are still classified by the UN as Least Developed Countries ( LDCs ). As the energy scholar , Vaclav has articulated : “ To give just a single key comparison , in 2020 the average annual per capita energy supply to about 40 per cent of the world ’ s population ( 3.1 billion people , which includes nearly all the people in sub-Saharan Africa ) was no higher

than the rate achieved in both Germany and France in 1860 .”

It also appears that nations which advanced the climate change agenda at the turn of the decade are now seeing public sentiment and support levels that are wavering . It is also interesting to note that the increasingly popular Reform UK political party , in its recently announced 2024 election manifesto , pledged to “ scrap the Net Zero agenda ” to save approximately GBP 30 billion per annum in public spending . The United Kingdom was a pioneer in the climate change movement , enacting its flagship Climate Change Act in 2008 . So , is this proposed policy position of an upcoming UK political party a risk or is it a reflection of the feelings of the majority ?

The case of Hunga Tonga-Hunga Ha ’ apai demonstrates how natural forces can impact our climate and in an instant of the geological calendar , dilute the outcome of so much effort and expenditure invested by humankind to replace existing energy systems . More importantly , it shows that whilst humankind can pursue an aggressive plan , the targets and timelines of the Energy Transition may not be entirely under our control . This has not been a view that has been widely shared .

In the coming months and years , moral values , commercial gains , the needs of those lacking adequate access to energy and political expediencies will each weigh the competitive forces of climate change differently , causing debate and confusion . In extreme scenarios , hostilities and chaos should not be discounted . What we need are leaders who can critically assess the best energy solutions for their individual nations and who are also brave enough to articulate transparently the constraints that prevent Net Zero targets from being delivered in the popular time frames that have been widely disclosed in the media . Otherwise , we face the realities of the volcanoes whilst the less wealthy continue to dream of the proverbial pot of gold at the end of the rainbow . – @ green