"Check Please?" at COP27
"The camel's nose is in the tent."
“This COP is lost and damaged.”
— Nigerian environmentalist Nnimmo Bassey
“You can’t have the very people burning the planet sitting here and pretending to be drafting the solutions to it, and that’s exactly what’s happening in these climate negotiations.”
— Asad Rehman, lead spokesperson for the Climate Justice Coalition
I am still waiting for the answer.
In Sharm el-Sheikh, Egypt, Vlad and Xi were no shows, and Biden’s tottering, commitment-backtracking speech got a standing O. After the usual round of vaporous promises and self-congratulatory toasts, the 27th Conference of Parties to the Paris Agreement concluded. It could have been meaningless had not they buried the lead, which came on Day Two and merited only a single paragraph summary somewhere deep in the coverage by The Guardian, The New York Times, Bloomberg, and the rest. They missed the big story.
You, dear readers, are more fortunate.
This week I had one of those special moments like in an action movie where time slows down and the hero can chart a course through a maze of bad guys, oncoming traffic, or a roaring conflagration. I suddenly — or not so suddenly, as it took a few days to gel in my brain — saw a new route through the climate emergency that functions at the scale of nations and bank-financed industrial civilization more generally.
On a routine basis, I hold the contradiction that humanity is in its final generations and there is no way we can escape our fate, and secondly, that somehow, steps if taken now could pull us back from that brink. Nonetheless, given a bailing bucket in a sinking lifeboat, I would choose to diligently bail even if the water was coming in faster than I could throw it out, because (a) it buys a little more time; and (b) a faint glimmer of hope is better than no hope at all. If you decide not to act, only then does the outcome become certain.
The glimmer of hope that pierced my brain was the idea that the António Guterres Greenwash Report might open a portal to a different paradigm; to a regulated regime of ESG audits that would transform everything.
I know. It’s geeky. Let me break that down.
On the second day of the COP, appropriately called “Finance Day,” former Canadian climate minister Catherine McKenna took to the podium in the press center to unveil the report of a “high-level expert group” created in March by UN Secretary-General António Guterres to impose integrity and transparency on the many net zero pledges being made by countries and companies. Such promises must be “about cutting emissions, not corners,” she began. She then listed certain restrictions that the UN would forthwith impose in calculating performances on such pledges:
- Zero tolerance for further fossil investment
- Zero tolerance for deforestation
- Zero tolerance for lobbying against climate action
- Zero tolerance for junk offsets
- Annual reporting on progress of actual, not purchased, reductions.
These new rules meant that if a nation, such as the United States, were to pledge to halve its emissions by 2040 compared to a 2010 baseline, it could not simultaneously spend money to open new gas fracking domains or pay other countries to do that for them. It could not put gas terminal and pipeline funding into an infrastructure bill. It would have to sign the UN treaty on land degradation neutrality and then ratify that in its Senate, and so forth.
The impact is even greater on the real-world powers — the central banks, intergovernmental development agencies, and transnational bond issuers. IMF will no longer loan money to Pakistan to open new coal mines. If you make a net zero pledge — and every country, agency, bank and company is under pressure to do so — you can no longer use that as greenwash to boost your credit or stock value without actual decarbonization. The UN Secretary-General followed McKenna to the podium to say he would provide transparency by putting all pledge reporting data on the UN’s Global Climate Action Portal. He then offered his own bullet list:
- Net-zero pledges must be in line with IPCC scenarios limiting warming to 1.5 degrees.
- That means global emissions must decline by at least 45 percent by 2030 and reach net zero by 2050.
- Pledges should have interim targets every five years starting in 2025.
- Targets must cover all greenhouse gas emissions and all scopes of emissions.
- For financial institutions, this means all financed activities; all scopes.
- For businesses, it means all emissions — direct, indirect and those originating from supply or distribution chains; all scopes.
- For cities and regions, it means all territorial emissions.
- The message is clear to all those managing existing voluntary initiatives as well as CEOs, mayors, and governors committing to net-zero:
- Abide by this standard and update your guidelines right away — certainly no later than COP28-Dubai.
If you are a publicly traded company in the US, the SEC is also now going to watch for greenwashing in your annual reports, tweets and press utterances. If you are an agency or non-profit relying on grants or loans, you had better do your own internal audits.
While this was all quite remarkable (although unremarked upon by reporters such as Amy Goodman at DemocracyNow! and brushed aside by others such as The Guardian’s Fiona Harvey), the full impact only sunk in for me a few days later.
If this succeeds, it is a thin driving wedge that could transform everything. It is corporate capture — but not in the way climate activists think.
Even a pretty green country like Denmark cannot claim net zero carbon pollution if it still spends tax dollars building gas pipelines to Finland or coal power stations in Africa. Now it has also to include its Scope 2 and 3 emissions in the calculation of its national footprint.
A Quick Tutorial
Greenhouse gas emissions are categorized into three groups or ‘Scopes’ by the most widely-used international accounting tool, the Greenhouse Gas (GHG) Protocol. Scope 1 covers direct emissions from owned or controlled sources [including direct combustion, company vehicles, and fugitive emissions]. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company’s value chain [such as the climate cost of mining ores, transporting commodities across oceans, employee commuting, waste disposal, leased assets, and distribution centers].
The UN’s new greenwash standard places restraints on companies and countries who may not have known quite what they were getting into when they made climate pledges. They will now need to:
- Assess where the emission hotspots are in their supply chain;
- Identify resource and energy risks in their supply chain;
- Identify which suppliers are leaders and which are laggards in terms of their sustainability performance;
- Identify energy efficiency and cost reduction opportunities in their supply and distribution chains;
- Engage suppliers and service providers to assist them in implementing sustainability initiatives;
- Improve the energy efficiency of their products; and
- Positively engage with employees to reduce emissions from business travel and employee commuting.
The Hidden Potential
Fast on the heels of this seemingly innocent exercise in transparency — who does not enjoy ridiculing greenwashing? — is the prospect of a massive new agency for change. Rather than brokering between nations with millennia-old axes to grind and voter emotions roiled by state cyber actors using clever phone apps and billion-dollar disinformation algorithms, the UN went straight to the real source of power, with trillions, not mere billions, of casino chips on the table. Beyond its own UN agencies — UNDP, GEF, IMF and World Bank Group — the real whales are JPMorgan Chase, Goldman Sachs, Bank of America Securities, Citigroup, UBS, Credit Suisse, HSBC, BNP Paribas, and Deutsche Bank, to name a few. There are also sovereign banks like Bank of China (BOC, BOCOM, CITIC, and CCB), multilateral development banks such as European Investment Bank (EIB), Islamic Development Bank (IsDB) and Asian Development Bank (ADB), and regional development banks like Inter-American Development Bank, the African Development Bank, the Central American Bank for Economic Integration, and the European Bank for Reconstruction and Development. The Bank for International Settlements is the bank of all central banks and Swiss Re is the world’s largest reinsurer. All of them attended COP27 and several were in the room for the greenwash press conference or watching on closed circuit TV.
Then there are all the companies that have made climate neutrality pledges, from Delta Airlines to Microsoft. In 2021 IKEA decided to make an additional €1 billion available over the next five years to accelerate the reduction of its emissions. Imagine, if you will, IKEA having to audit its entire supply and distribution chain — every tree cut, every display lighting bill in every big box store, and every employee who drives a gas-guzzling land yacht to work.
Suppose this grand idea succeeds? Suppose all these banks and countries start to quantify their Scope 2 and 3 emissions in order to achieve net climate neutrality. The next step is to apply this same model to all the other UN goals — eradicate poverty, restore the ocean, and preserve biodiversity, for instance. ESG (Ecological, Social, Governmental) auditing could be introduced by pledge and audit systems as easily as CO2 emissions — redressing human rights, gender inequality, family planning, and the whole enchilada of Sustainable Development Goals.
Lost and Damaged
Another remarkable development at this COP was the discovery of a possible way out of the impasse surrounding historic guilt (a.k.a. “Loss and Damage”) for fossil fuel use and its resulting weather chaos.
At COP26 Glasgow, Indian Energy Minister Raj Kumar Singh called out the Global North and demanded it not only reduce its emissions, but also pay damages for the deadly storms, flooding, and increasing temperatures, predominantly affecting Global South countries. This year, Pakistan’s president raised a similar stink. Small Island States threatened a walk-out if the issue of damage payments remained unresolved. I have been blogging for this past month trying to point my finger at how counterproductive finger-pointing is. Should Egypt pay for the Pharaoh casting out Moses? Should Arab nations pay for the damage caused by the African slave trade? Where does it end?
Making historically guilty countries pay for Colonel Drake’s folly could be reframed, however, as it was in a research report from the Universities of Oxford and Edinburgh. They proposed a progressive carbon takeback obligation (CTBO) on fossil carbon producers and importers, arguing:
… the perceived policy risk cost associated with a CTBO is lower than that associated with a politically determined carbon price. Compared with a global carbon price, an upstream CTBO has advantages of simple governance, speed, and controllability: equivalent carbon prices under a CTBO are reliably capped by the cost of direct air capture and storage, by ensuring deployment keeps pace with continued fossil fuel use, reducing the risk of punitive carbon prices or more draconian measures being needed to drive out the final tranche of emissions.
Does it not make sense, rather than complaining and finger-pointing, to first remove the offending greenhouse gases that are vexing those least able to cope with their effects? And, as the Oxford/Edinburgh dons suggest, placing that burden on the polluters is the most equitable way to proceed. All told, according to the International Energy Agency, the net income for the world’s fossil producers is set to double in 2022 from 2021, to a new high of $4 trillion. This is the best possible time for the check to arrive at the table.
It is a new day.
The Green Road is helping these places grow their own food, and raising money to acquire farm machinery and seed, and to erect greenhouses. The opportunity, however, is larger than that. The majority of the migrants are children. This will be the first experience in ecovillage living for most. They will directly experience its wonders, skills, and safety. They may never want to go back. Those that do will carry the seeds within them of the better world they glimpsed through the eyes of a child.
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The COVID-19 pandemic destroyed lives, livelihoods, and economies. But it has not slowed climate change, a juggernaut threat to all life, humans included. We had a trial run at emergency problem-solving on a global scale with COVID — and we failed. 6.6 million people, and counting, have died. We ignored well-laid plans to isolate and contact trace early cases; overloaded our ICUs; parked morgue trucks on the streets; incinerated bodies until the smoke obscured our cities as much as the raging wildfires. We set back our children’s education and mental health. We virtualized the work week until few wanted to return to their open-plan cubicle offices. We invented and produced tests and vaccines faster than anyone thought possible but then we hoarded them for the wealthy and denied them to two-thirds of the world, who became the Petri-plates for new variants. SARS jumped from people to dogs and cats to field mice. The modern world took a masterclass in how abysmally, unbelievably, shockingly bad we could fail, despite our amazing science, vast wealth, and singular talent as a species.
As the world emerges into pandemic recovery (maybe), there is growing recognition that we must learn to do better. We must chart a pathway to a new carbon economy, one that goes beyond zero emissions and runs the industrial carbon cycle backward — taking CO2 from the atmosphere and ocean, turning it into coal and oil, and burying it in the ground. The triple bottom line of this new economy is antifragility, regeneration, and resilience. We must lead by good examples; carrots, not sticks; ecovillages, not carbon indulgences. We must attract a broad swath of people to this work by ennobling it, rewarding it, and making it fun. That is our challenge now.
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“There are the good tipping points, the tipping points in public consciousness when it comes to addressing this crisis, and I think we are very close to that.”
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