COP28 set to highlight lack of progress on Paris Agreement
Sarah Bratton-Hughes
A stocktake of the goals set out under the Paris Agreement show the world is not on track to reach the objectives of the international treaty, according to American Century Investments head of sustainable investing, Sarah Bratton Hughes.
Ms Bratton Hughes believes global climate leaders should use the upcoming United Nations Climate Change Conference – COP28 –to recalibrate the approach to achieving a low-carbon transition given the lack of progress.
“Given the economic costs and frequency of extreme weather events are at global highs, it seems appropriate to ask whether COP28 will pass a reality check.
“Despite being 20 years into the energy transition – and with a growing number of countries having committed to net zero – little, if any, progress has been made.
“Much of this can be attributed to divestment, with carbon-heavy businesses simply passing the reins to other willing buyers. The best example of this are moves to divest from the oil and gas sector and the fact this has had little impact on the cost of capital for so-called dirty companies,” she said.
She said the role of policy-makers in decarbonising the global economy should not be understated. The combination of increasing geopolitical conflicts, climate change-driven inflation and increased energy demand in developing countries is intensifying the need for appropriate policy measures.
“We urge governments to take a holistic view in establishing policies that work in concert with investors’ ability to direct capital towards innovative climate solutions.
“That holistic approach should include concrete actions that uphold a just transition to a cleaner energy future,” she said.
Ms Bratton Hughes points to the US which has recently announced it will invest $1.2 billion to help develop two commercial-scale direct air capture facilities that absorb more than two million metric tons of CO2 emissions annually to jumpstart a network of carbon removal sites. The development is expected create 4,800 jobs.
“Initiatives such as this are a step in the right direction, however I would caution that large economies, such as the US, can more easily use subsidies to attract green investment than emerging market and developing economies. This puts the latter at a disadvantage in terms of developing clean energy jobs.
“Making a just transition to a greener world will not be easy, but it is essential to long-term sustainability, and despite the challenges, we can motivate action by focusing on potential solutions, not just problems.
“While the COP28 stocktake is likely to report that urgent action is needed, recent history has shown we cannot simply shut down high-carbon energy production overnight – nor would doing so achieve optimal real-world outcomes,” she said.
