I have a Media Pass to “attend” the World Economic Forum’s Davos Agenda Summit taking place virtually at the present. I have viewed a great many of the panel discussions, but I have not witnessed as much emotion and passion as was on display on Wednesday (27/1/21) in the “Mobilizing Action on Climate Change (Option 2)” panel and I recommend all to watch the discussion as a matter of urgency.
The panel discussion gives a glimpse at the path forward for humanity and has especially concerning elements for Australia, or at least the current Federal Government. For one, Australia was one of only 3 nations that were mentioned specifically (by name) – the other two, obviously, being US and China. While Australia was not singled out in terms of our (lack of) efforts on Climate Change, unlike the other 2, we were discussed because of our fires last summer. Be in no doubt, those fires are now emblematic of climate change and its consequences. Australia’s brand is damaged and the longer we are led politically by climate change sceptics the greater will be that damage. Secondly, coal is very much a dirty word world-wide, and the one moment of tension (in what was an evocative but entirely polite conversation) was when John Kerry (US Special Presidential Envoy for Climate, National Security Council) disagreed with the importance of gas as a bridge to sustainable energy production (towards Ben van Beurden, CEO of Shell). Of course, Australia is focusing much of its post-COVID response on gas, and is protective of thermal coal exports, and is clearly a global outlier in that regard. Morrison’s Government is isolating Australia on this to an incredible degree, and like climate change, the damage might not be apparent at first but the consequences will be deep and long-lasting if not addressed promptly.
This panel will undoubtedly be considered one of the highlights of the Summit. Speakers along with John Kerry were Jesper Brodin (of IKEA), Feike Sybesma (of Royal DSM), Ben van Beurden (of Royal Duch Shell), Amina Mahammed (Deputy Secretary of United Nations), Alok Sharma (of COP 26), and moderators were Borge Brende (of the WEF) and Rabecca Blumenstain (of New York Times).
I have summarised the key statements of each participant down to the following:
John Kerry was very strong, apologising for the void left by the US in recent years, and emphatically stating that “the whole attitude [towards climate change] needs to shift”. Concerningly John stated that “Right now we’re on track to reach 4.1 to 4.5 degrees (Celsius above pre-industrial levels)… we’re already seeing what happens at 1.2 degrees let alone getting to 1.5, and most scientists will tell you that they fear we are going to blow right through 1.5”. In summing up he dramatically stated that “Glasgow is the last best chance to summon up the response… the world has high expectations and we need to meet them”.
Jesper Brodin (IKEA) stressed the need for consistency by politicians.
Feike Sybesma (Royal DSM) stressed that businesses needed to begin to live up to their rhetoric, and highlighted that American businesses are most at fault here due to the short-termism centred around shareholder interests and the profit imperative.
Ben van Beurden (Shell) stressed that his company is an integrated energy business. He highlighted how the COVID-19 pandemic has proven the size of the task in that the level of emissions reductions this year, because of stringent measures to address the pandemic, must be repeated year after year. Ben said that his focus will be on encouraging a sectoral approach so that each sector and business can work on decarbonising [Edit 8 Feb 2021, replaced “reducing its demand for hydrocarbons” with “decarbonising”], and stated that the market alone can not achieve this so “serious mandates” will be required (i.e. political will to enforce change).
Amina Mohammed (UN) is “not encouraged by short-term commitments at all”. She also highlighted that “finance matters” and so stressed the importance of recovering from the COVID-19 is critical to provide the financial platform to make investments, highlighting the need for private-public partnership. Amena was strong in saying that leaders need to have the courage and the will to act even though measures will be painful. Finally she stressed that it is not fair to enforce strict measures on developing countries when developed countries have polluted along their road to economic success (which I have highlighted in my writing on climate change).
Alok Sharma (COP 26) also highlighted the need for private-public partnerships and spoke about the enormous potential for private enterprise. He stated that not just billions of dollars of capital were required but trillions!
Regardless of the reader’s views on climate change or on particular politicians, viewing this should be uncomfortable for all Australians as we are heading in a different direction to the remainder of the world. While the second half of the panel discussion is where things really start to open up, the whole video is important. Personally, I took heart from it because people so practiced in public communication and diplomacy showing this much passion and emotion shows that the pressure really is now on to act.
Finally, I cannot conclude without saying that Ben van Beurden deserves a pat on the back for having the character and courage of his convictions to present his views as a leader in a sector which is often maligned in some quarters in discussions about climate change. For a few (mostly personal*) reasons I have been following Mr. van Beurden for a few years now, especially on the key issues covered by the Davos Agenda, and he has impressed me as a leader of genuine integrity and authenticity.
Also, I wish to draw attention to an article that I wrote early in the history of MacroEdgo entitled “Coming Soon: Product miles like food miles“, and the related post “Investment Theme: Product and food miles“, where I mentioned IKEA and suggested that their model would be increasingly challenged as the world moved towards adequately pricing in environmental sustainability. At the very least they need to recognise that there is much low hanging fruit in the furniture industry in quality control during production and shipping.
* For one his wife comes from an even smaller neighbouring town to my home town, and anybody who has the sensibility and spirit to marry a North Queenslander has to be alright in my book 😉
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© Copyright Brett Edgerton 2021