Page 29 - bne Magazine February 2023

bne February 2023 Companies & Markets I 29
announced its “largest ever upward revision” for its renewable energy forecasts.
The world is now set to add 2,400 GW of green capacity – an amount equal to the entire power capacity of China today
– between 2022 and 2027, twice as much as it did in the previous five years.
Yet there is no room for lethargy, and governments need to maintain the green momentum and to avoid any slippage in the race to net zero.
For example, the UN recently identified greenwashing by business and finance as the biggest danger facing this race to net zero, urging them to avoid a toxic cover-up and to ensure that any climate pledges they keep are in line with the 1.5-degree targets.
“The UN recently identified greenwashing by business and finance as the biggest danger facing this race to net zero”
Greenwashing, weak regulation and intensive lobbying by fossil fuel proponents were the greatest impediments to fighting climate change. The business sector cannot be trusted to police itself, the UN said, and must be subject to strict national and international laws and regulations on green investment.
Meanwhile, the world’s wealthiest people must also step up and make a greater contribution to fighting climate change.
Oxfam recently said that the investments of the world’s 125 wealthiest people produce the same amount of CO2 as the whole of France, while each of them emits a million times more greenhouse gases (GHGs) than the average person.
Billionaires’ investments create an average of 3mn tonnes per year per person of CO2, compared with 2.76 tpy per person for the bottom 90% of humanity, and the NGO found that
an average of 14% of their investments were in polluting industries such as energy and cement.
More than half of the 50 largest sources of GHG emissions are associated with oil and natural gas fields, and those emissions are vastly under-reported, Oxfam said.
Research
In its report, Oxford Economics went beyond average historical temperature to provide a deeper assessment of climate change to show how temperature anomalies from historical norms may be more consequential economically
than average temperature levels. This means that the when temperatures differ the most from their underlying historic averages, the economy is more vulnerable to collapse than when average temperatures are rising across the board.
This means that current warming of the earth’s atmosphere will have a greater impact on people’s jobs, incomes and economic well-being than previously thought.
It identified a climate damage function that separates economic impacts into two categories: global-warming effects due to temperatures trending away from their long-run means; and broader climate change attributed to changes in temperature volatility and the likelihood of extreme events.
The report follows on previous research by Oxford Economics, which found that reaching net zero by 2050 and facilitating the green transition would create economic opportunities worth $10.3 trillion by 2050, in 2020 prices, equivalent to 5.2% of global GDP in that year.
The picture put forward by Oxford Economics is apocalyptic, and can only be avoided if governments and corporations push green issues to the top of their investment agendas and do not allow the issues to slide.
Just this week, the EU finally approved its proposed CBAM scheme, which is effectively the world’s first carbon border tax.
CBAM is designed to protect against “carbon leakage” –
the risk that EU companies could move carbon-intensive production abroad to countries where less stringent climate policies are in place, or when EU products are replaced by more carbon-intensive products.
This is one of the many financing loopholes that must be closed to meet green targets. The CBAM follows G7 plans
to establish a “climate club” to strengthen international co-operation on climate change mitigation. The “climate club” aims to support increasingly ambitious plans to achieve global net-zero GHG emissions by or around 2050.
World: GDP
% difference from baseline
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