Frustration over Cop26 is visible, but hope is still there

Hamish McRae, The Independent

Success, or failure, or both? The outcome of Cop26, with its last-minute compromise on running down the use of coal, will be picked over in the coming weeks.

While it is a temptation to give rapid judgements, one of the overriding lessons from previous climate summits is that what happens in the following year is more important than the wording of the communique at the end of the meeting. With that health warning in mind, here are five thoughts.

The first is that nailing the need to run down the use of coal is a massive advance. To have India and China onside there, albeit in weakened language, is huge. I suspect in the end it will be economics as much as environmental concerns that determine the pace at which its use will be eliminated.

With luck, the falling costs of renewables may make it too expensive to burn coal. But the official commitments do matter. Second, the role of NGOs in pushing governments has been really important, and was most evident in Glasgow.

To generalise, they have become more effective and coherent in formulating both the dangers of the climate crisis and the opportunities for enterprise that the new technologies might bring. They are at the very centre of policymaking.

Third, a wall of commercial money will be mobilised to back those new technologies. I commented last week on the initiative headed by Mark Carney and Michael Bloomberg to coordinate the big money that will be thrown at efforts to decarbonise the world economy.

In the past few days, the market response has rather reinforced that argument. The prime example of this was the float on the New York stock market of Rivian, the US start-up that manufactures electric trucks. It was valued at $91bn (£68bn), more than Ford or General Motors.

Some have argued that this valuation is outlandish, but it is backed by both Amazon and Ford. So members of both the new and the old US corporate aristocracy are putting their money behind this example of new technology.

Fourth, environmental, social and governance (ESG) investing is sweeping through global markets, and Glasgow has given it a further boost. There is a ratchet effect.

These particular concerns have become steadily more important in investment portfolios, and while of course there is the important issue of companies “greenwashing” their products and services, this is a movement that is going in only one direction.  Funding new investments that do not pass scrutiny from an ESG perspective becomes more expensive, maybe sufficiently so to render the investment unviable. Those that pass scrutiny find that money is available on better terms.

Finally, young people are on the side of the push for a greener economic system. Again, this is something that impressed the delegates in Glasgow. The issue is about the pace of change, and young people will drive that. This is not about politics. It is about consumer preferences and about technology.

Young consumers will set the pace in insisting that the goods and services they buy are produced in environmentally sound ways — or at least, in ways that adopt current best practice. As for improving that practice, many of the new technologies that will speed up decarbonisation do not yet exist.

If the recent past is any guide, those technologies will be developed by young people, maybe those currently still in education. After all, the great leaps forward in the past have come from young disrupters, not established enterprises.