Greetings from New York, which is calming down as UNGA week winds down. It has been a crazy whirl, with some unexpected moments (one of our most memorable was when someone performed a rap song to show their appreciation at the FT Live rainforest nations conference on Wednesday; yes, really).
Some of these surprises have been depressing: take note of our discussion below about UK prime minister Rishi Sunak’s decision to water down Britain’s green commitments. Other are more encouraging: in today’s note we also look at California’s move to force large companies to embrace enhanced climate reporting.
However, the really big question arising from UNGA week is what progress, if any, can now be expected at COP28? On the positive side of the equation, there is growing momentum towards expanded World Bank lending and new climate finance initiatives. Private sector investment in green tech is also exploding as Al Gore, the former US vice-president, explained with passion at a Moral Money party that I co-hosted with Imagine’s Valerie Keller, at my home.
But the bad news, as Gore also thundered — preacher-style — is that climate change is accelerating and some fossil fuel companies continue to defy demands to decarbonise.
Or as he told the Financial Times in an interview last week: “They captured the UN process to a disturbing degree, even putting the CEO of one of the largest oil companies in the world in as president of COP28.”
Oil and gas executives disagree. But the emotive debate will heat up ahead of COP28, not least because the consensus in private conversations around UNGA is that the goal of keeping global warming below 1.5C has already been lost — and 2C looks unlikely. Eek. — Gillian Tett
Sunak riles New York’s climate crowd from across the pond
As New York’s climate gathering wraps up, the attendees are all talking about a story across the pond. The climate crowd in New York has roundly criticised Rishi Sunak’s plan to push back a ban on sales of new internal combustion engine cars to 2035 from 2030 and to delay the end to new gas boilers.
“We’re three years into the decisive decade for climate action. Any U-turns, any pumping of the brakes is inconsistent with the urgency of the crisis and the imperative that science has been so clear about,” Ali Zaidi, the White House’s climate adviser, said in response to a question about the UK’s actions.
The US, he said, “will continue to be one of the loudest — if not the loudest — voice in the room pushing for critical urgent action to deploy clean energy to tackle the climate crisis”.
UN climate chief Simon Stiell said: “No G7 country has yet ‘over-delivered’ on climate. On the contrary, there is a lot more action needed, specifically from them. Is turning away from climate action in 2023 really leadership?”
Sunak, who did not attend this week’s gathering in New York, defended the changes as a way to help low-income families save money. His comments hark back to July when his Conservative party won a surprise victory in the Uxbridge and South Ruislip by-election, helped by controversy over the Labour mayor Sadiq Khan’s extension of a charge on polluting vehicles to outer London. At the urging of some party members, Sunak was prompted to “rethink” the timeframe for switching to electric cars and heat pumps.
Sunak has insisted he was not playing politics. But his announcement was clearly timed to coincide with climate week in New York. The Tories also sent out material on Wednesday challenging the opposition Labour party to justify making working families pay for climate policies. (Patrick Temple-West and Aime Williams)
Cleverly pitches UK’s ‘Bauhaus’ climate finance plan
Although Sunak was not in New York this week, James Cleverly, the UK foreign secretary, was. He announced plans to “unlock” up to $1.8bn in climate finance that is sitting in international financial institutions, using loan guarantees.
That is not just a workaround for a country reluctant to spend much more of its own money, Cleverly insisted. “The UK has absolutely led the field with those climate resilience clauses in our debt vehicle. Now, if you just try and say ‘well that doesn’t count because it didn’t cost you any more money,’ you really are missing the point,” he told Moral Money.
“This is a bit Bauhaus: form follows function,” he said: climate resilience clauses in the UK’s financial vehicles may not “cost an additional penny” upfront but “the liberating effect that has on other countries is huge”.
Pressed on whether the UK still planned to honour Sunak’s pledge to restore the UK’s overseas aid budget from 0.5 per cent of gross national income to 0.7 per cent, he said it “absolutely” did but declined to say when that would happen.
“It is driven by circumstances rather than chronology,” Cleverly said. First, “we need to get the UK economy back on track”. (Andrew Edgecliffe-Johnson)
California dreamin’ . . . of Scope 3
In recent years, there has been a lot of debate about whether globalisation has created a race to the bottom in climate standards. However, what is more intriguing to ask is whether globalisation might be also forcing a race to the top — at least for big global companies.
To understand this, ponder California. This week its governor Gavin Newsom was in New York, with his wife Jennifer Siebel Newsom, to talk about the swath of environmental measures that his state is implementing; they range from regenerative agricultural programmes for schools to tighter climate reporting rules and a newly launched lawsuit against fossil fuel giants.
The lawsuit arguably grabbed the most attention. “The climate crisis is a fossil fuel crisis and we have not been holding those polluters accountable,” Newsom declared at a lunch that I attended. “We have to level set and we did so this week with the fossil fuel suit.” Unsurprisingly, Chevron — which is headquartered in the state — told the FT this week that it planned to fight back with force.
However, it is the climate reporting initiatives that will matter most. As we recently noted, the California legislature has passed a bill that would force large companies to provide Scope 3 climate reports by 2027. Newsom has not yet signed the legislation, but he told UNGA delegates this week that he would do so imminently. And that, as some executives told me, presents a conundrum for large companies, since the Securities and Exchange Commission has backed away from the idea of making Scope 3 reporting mandatory on a federal level — and some states, such as Texas and West Virginia, are actively hostile to the concept. That means that operating in California and Texas simultaneously could soon be quite difficult.
Companies with big operations in California — which, as Newsom proudly notes, is about to become the fourth-largest economy in the world — will probably choose to embrace Scope 3 reports for their global operations, to avoid the hassle of having separate processes for different regions. Others may take a different tack, and pull out of the Californian market. Either way, the move has echoes of what happened with Europe’s General Data Protection Regulation, when Brussels’ move to tighten privacy rules forced non-EU entities to raise their standards too.
Meanwhile in another sign of California’s catalytic role, US president Joe Biden announced at UNGA this week that a programme pioneered in that state to train young workers in green tech was now being rolled out across the country.
“We now have six times more green jobs than fossil fuel jobs!” Newsom declared. Maybe Climate Week should take place next year in California, instead of New York. (Gillian Tett)
Smart read
If you want to understand why figures such as Gore are furious about the fossil fuel majors, take a look at this FT story about how Republican politicians are frantically trying to court oil companies as donors, and promising to reverse Biden’s green policies as a quid pro quo. Former president Donald Trump used to be their darling, but now Ron DeSantis, the Florida governor and Republican presidential hopeful, is vying to take his place.
Read the full article here