This year the theme is building a better future. “We have seen the whole world go through a massive shift and change. Big impact on people’s health, on the economy, on people’s livelihoods. We also know that climate change is not going to wait, so we need to think about what happens as we come out of Covid,” said Helen Clarkson, CEO, the Climate Group
In keeping with the changes due to the Covid-19 pandemic, this year the week-long summit is not restricted to events in New York City, and India is one of the hubs.
The focus on India will include an exploration of the economic recovery and how to ensure it is green, as well as a deep dive into efforts by states to make good on India’s international commitments but also accelerating the transition.
This year the NY Climate Week, curated by the international non-profit Climate Group, has a critical role to play. With the annual UN sponsored climate meet, the 26th round of climate talks, postponed till next year the Climate Week becomes critical to keep up the pressure on governments to increasing their efforts at tackling climate change. India has an important role in this global transition and there will conversation about “what is India bringing to COP26”.
Both in the global context and more specifically in the context of India. Renew Power CMD Sumant Sinha, who serves chair of the India Advisory Group of The Climate Group, says “it is an interesting point in time” where industry and the corporate sector will play a “bigger role”. There are three ways in which this bigger role will unfold.
The first as users of energy. Industry is a big consumer of energy therefore a big emitter. Sinha said there was a need to go beyond approaching industry as a user that needs to consider how it can minimize its carbon footprint. Or the second pillar of the enhanced role for industry that is continuing to work on technologies. “Here the news is good because renewable technologies are at a point where it is cheaper than other forms of electricity generation. Corporate sector or industry has a big role to play in technology evolution and making sure that technology gets adopted rapidly,’ explained Sinha.
The third pillar, investments. Trillions of dollars the world over are managed by private companies. “The decisions which these private companies make on where they want the money to go will impact decisions that are made within the corporate sector for future investments,” said Sinha.
For example, the reduction of the market cap of large oil and gas companies down to half that is an signal that says that people are seeing that oil and gas doesn’t have the kind of future that was once expected and that financial investors are no longer very keen on investing in those kind of stocks. On the flip side, Sinha points to the rise of ESG investing that is taking up the market cap of a lot of companies in sustainability sector to much higher levels.
“I see that we are passing some inflexions points globally. Technology has crossed an inflexion point where it is easier and cheaper to abate carbon emissions and to move to clean sources of electricity,” said Sinha.
A more proactive industry comes at a time when it has become clear that there is a need to step up efforts to tackle climate change—the aggregate of all the nationally determined contributions are not enough to put the world on a path to net zero.
Speaking of The Climate Group’s programmes to help industry to lead the transformation on the ground, Divya Sharma, executive director of the The Climate Group’s India operations said that the effort was help companies to “commit to energy and productivity transitions”. Sharma argued that well-established companies have the capacity to influence. “The major idea is not only to bring these big businesses and commit to these ambitious targets but also influenced own the line other companies, agencies and ecosystem partners they work with.”
The push to net zero cannot disregard the differing circumstances of countries. Clarkson acknowledges that countries “have to think globally then come down to the specific pathways that are needed either at the sectoral or country level”. But the Climate Group CEO is clear that the next 12 to 14 months are “critical” to put the “pressure on countries to turn the lever”. Both Clarkson and Sinha stress on the changes that have taken place since 2015 when the first round of NDCs were submitted. “What has happened since 2015 when the first round was done is that the market signals have changed, technology prices have come down. As we have move forward you have this interplay between countries making their own commitments and looking at it locally but also the market favouring energy transition,” explains Clarkson.
However, countries like India do face challenges in making this transition. Sinha says that while the challenges posed by unmet developmental needs are real, there is good news. “There are technology-based solutions available to ensure that at least everything built from this point on does not have the same kind of carbon lock ins of older technologies,” said the Renew Power chief.
Going beyond the big companies and market leaders, Sinha is of the view that SMEs need to be incentivized when the commercial calculations do not bear out participating in efforts to address climate change. “It is not as if the small companies or SMEs do not want to play their role in climate change issues they are impaired more by commercial considerations,” said Sinha. To this end, he suggests that government policy making needs to be smart and the big companies need to step up “take bit of an evangelising role”.
The general view is that the next 12 months are critical not just for building back the economy but to ensure that countries do not miss out on the opportunity tackle climate change. Industry has a chance to play a major role.