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‘When representatives from nearly 200 countries finalized the Paris climate agreement on December 12, 2015, there were celebrations around the world. But it has now been five years, and the world is in a state of deepening uncertainty. The Covid-19 crisis admits of no quick fixes. The pandemic has ushered in developing economic and social crises, as well as a wave of indebtedness. The geopolitical landscape is as fractured as it has been in decades, and with global supply chains being reorganized, the prospects for achieving deeper global integration through trade are fading.’ – excerpt from the Project Syndicate published article ‘Getting back of the Paris climate track’ - Laurence Tubiana, CEO of the European Climate Foundation

As against the euphoria around the Paris Agreement, and rightly so, since 196 countries had finally reached an agreement after two weeks of exhaustive deliberations, whereby the fundamental decision made by the world was to limit the global heating to below 2C, and even better to try to curtail it from rising above 1.5C, there is not much to show in terms of progress since then, as former general secretary of United Nations (UN), Ban Ki-moon told the newspaper Guardian: ‘We have lost a lot of time. Five years after the agreement in Paris was adopted with huge expectations and commitment by world leaders, we have not done enough.’

Hence, while a lot needs to be done as rightly pointed out by Ban Ki-moon, among many others, a Guardian article ‘The Paris agreement five years on: is it strong enough to avert climate crisis’ by Fiona Harvey pointed out that while there were huge challenges at hand – even after the retardation in emissions caused by the pandemic – there were also some positives since the Paris Agreement. In this regard, she argued: ‘On some measures, Paris could be judged a failure. Emissions in 2015 were about 50 billion tonnes. By 2019, they had risen to about 55bn tonnes, according to the UN Environment Programme (Unep). … Global temperatures have already risen by more than 1C above pre-industrial levels… . But to judge Paris solely by these portents of disaster would be to lose sight of the remarkable progress that has been made on climate change since. This year, renewable energy will make up about 90% of the new energy generation capacity installed around the world, according to the International Energy Agency, and by 2025 will be the biggest source of power, displacing coal. That massive increase reflects rapid falls in the price of wind turbines and solar panels, which are now competitive or cheaper than fossil fuel generation in many countries, even without subsidy.’

Having said that, forward strides in renewable energy and its contribution in meeting the Paris Agreement targets need a sharp reduction in fossil fuels; whereby the needed scale of reduction could be understood from a recent article ‘Equivalent of Covid emissions drop needed every years – study’ by Fiona Harvey. It pointed out: ‘Carbon dioxide emissions must fall by the equivalent of a global lockdown roughly every two years for the next decade for the world to keep within safe limits of global heating, research has shown. Lockdowns around the world led to an unprecedented fall in emissions of about 7% in 2020, or about 2.6 billion tonnes of CO2, but reductions of between 1bn and 2bn tonnes are needed every year of the next decade to have a good chance of holding temperature rises to within 1.5C or 2C of pre-industrial levels, as required by the Paris agreement.’

Moreover, another research ‘Risky Bet: national oil companies in the energy transition’ produced by National Resource Governance Institute, raises alarm bells with regard to meeting targets of the Paris Agreement, asking governments and state-owned national oil companies (NOCs) to revisit their investment plans. According to this research work, ‘If national oil companies follow their current course, they will invest more than $400 billion in costly oil and gas projects that will only break even if humanity exceeds its emissions targets and allows the global temperature to rise more than 2°C. Either the world does what’s necessary to limit global warming, or national oil companies can profit from these investments. Both are not possible.’

Highlighting serious concern over this reportedly likely investment by NOCs, environment correspondent of the Guardian, Fiona Harvey in another article argued: ‘The world’s state-owned fossil fuel companies are poised to invest about $1.9tn (£1.4tn) in the next decade in projects that would destroy any prospect of meeting the Paris agreement climate goals. … David Manley, the lead author of the report and a senior economic analyst at the think tank, said: “A lot of the oil industry wants one last party, and they are going to invest trillions. We are worried about how long that party will continue. If the energy transition [away from fossil fuels and into clean energy] is to be fast enough to meet the Paris agreement, the party needs to be over very quickly.” … China, India and Russia are expected to be responsible for the biggest chunk of investment from NOCs.’

An important element of tackling climate crisis, is for rich countries to come true on their commitments with regard to providing financial resources or climate finance to developing countries, as pointed out by Fiona Harvey in another article that ‘Rich countries must step up with fresh financial commitments to help the developing world tackle the climate crisis, the UN’s climate chief has said. Patricia Espinosa, executive secretary of the UN framework convention on climate change, said fulfilling pledges of financial assistance made a decade ago must be the top priority before vital climate talks – Cop26 – [postponed from last November due to pandemic to] later this year. … Rich countries are supposed to ensure that at least $100bn a year is available to the poor world, through public funds and private sector sources, to help them cut emissions and cope with the impacts of climate change. The $100bn-a-year pledge was first made in 2009, at the Copenhagen climate conference, and was reiterated at the adoption of the 2015 Paris accord.’

A September 2020 report ‘Making mission possible: delivering a net-zero economy’ by Energy Transitions Commission, has said: ‘The Intergovernmental Panel on Climate Change’s November 2018 report argued that the world’s objective should be to limit global warming to 1.5°C above pre-industrial levels, and that this would require reaching net-zero GHG [greenhouse gas] emissions by around mid-century (between 2050 and 2060)’. Martin Wolf of the Financial Times pointed out that a British economist, Lord Adair Turner, found that the Report ‘…lays out, …a plausible passage to net zero emissions by 2050. At its core is a shift towards reliance… in the form of solar- and wind-generated electricity. This will be combined with batteries, hydrogen and other forms of storage, as well as a role for bioenergy and carbon capture in the medium run. Thanks to the collapse in cost of renewable energy, this transition is now both feasible and cheap. A few sectors such as iron and steel, will be expensive to transform. But they are not large enough to change the big picture.’

Overall, dealing effectively with climate crisis would require greater level of multilateralism, and political leadership in individual countries, as pointed out in the same article by Laurence Tubiana. According to Tubiana, ‘With entire economies and societies changing fast, this is the moment for the political leadership to push things across the finish line. The new Biden administration will play a critical part in the global response, but the US alone will not solve the problem. In these times of increasingly distributed global leadership, we all must work together. The international community’s next milestones – at the G7, the G20, and COP26 – will be decisive. This is a game of dominoes that we can win.’

(The writer holds PhD in Economics from the University of Barcelona; he previously worked at International Monetary Fund)

He tweets@omerjaved7

Copyright Business Recorder, 2021

Dr Omer Javed

The writer holds a PhD in Economics degree from the University of Barcelona, and has previously worked at the International Monetary Fund. His contact on ‘X’ (formerly ‘Twitter’) is @omerjaved7


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