By PETER PRENGAMAN, Associated Press
DAVOS, Switzerland (AP) — While the COVID-19 pandemic and Russia’s war in Ukraine will be the focus of the World Economic Forum’s business and government leaders meeting, so will climate change. It caught the world’s attention in an irresistible and devastating way.
The acceleration of rising temperatures, the ferocity and cost of major weather events, and their impact, especially on people in developing countries, have pushed the issue from a science to something that touches every aspect of life, including (or, perhaps especially) business and the economy.
Of the roughly 270 panels Monday through Thursday, a third are about climate change or its direct effects. US climate envoy John Kerry, Ugandan climate activist Vanessa Nakate and Alok Sharma, president of the international climate conference COP26 last year, are among the expected climate leaders in the Swiss resort city of Davos.
At the forum’s first in-person meeting in two years, the climate panel was as varied as the issue. From fighting “environmental anxiety” to helping debt-ridden countries finance renewable transitions. Here are some of the broader themes that might emerge:
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ENVIRONMENTAL, SOCIAL, GOVERNANCE
Several panels will grapple with an investment approach that considers the environment and other key factors. Known by the acronym ESG, it is becoming a force, with trillions of dollars invested in companies that meet certain criteria.
When it comes to climate change, ESG could be important. For individual investors to corporations and government agencies analyzing how companies operate, public disclosures and declarations are paramount. They can form the basis for evaluating a company’s emissions, environmental impacts and financial risks associated with climate change.
They are also controversial and raise the question: Should certain declarations be mandatory? Should they be standardized and regulated, and by whom? Or has the ESG movement gone too far, which ultimately discourages investment and does little to control greenhouse gas emissions?
Point of view sometimes falls along political lines. In the US, many Republicans call them “awakening”, while many leftists, especially environmentalists and campaigners, argue that increasing reporting and transparency can bring real change.
Many managers of some of the largest mutual funds in the world think that ESG is important for evaluating risk. Just last week, Tesla CEO Elon Musk said the approach had been “armed by fake social justice warriors.”
ENERGY TRANSITION AND ‘NET ZERO’
The world’s leading climate scientists have warned that significant reductions in greenhouse gas emissions this decade are needed to minimize warming and avoid the most damaging effects on the planet. That will require major changes in the way business is conducted, from the way products are produced to the way they are transported.
Several panels will look at areas where businesses have successfully transitioned a large part of their energy portfolio to renewable energy, the role of finance and government to drive or mandate change, and strategies to keep businesses accountable. Despite increasing awareness and business promise, emissions continue to rise worldwide.
“Moving the climate debate from ambition to achievement” is the title of one panel that summarizes the major challenges.
The sessions will look at sectors, such as the decarbonization of shipping and aviation, renewable transition plans and the challenges to achieving them in countries such as China and India. There will be discussions on strategies to ensure major change is inclusive and considers people in historically marginalized countries who are feeling some of the most intense effects of climate change.
An important flow through all the discussion will be identifying what “net zero” is — and isn’t — when looking at promises from companies and countries. Switching from fossil fuels like coal and oil to renewables like solar and wind can reduce emissions and bring companies closer to the goal of taking the same amount of emissions out of the atmosphere as they were.
But the transition to renewable energy is often only a small part of a company’s plans. Many rely on balancing their carbon footprint by investing in forest restoration or other projects. While better than nothing, experts note that relying on carbon offsets does not represent a change in business practices.
WAR IN UKRAINE AND THE FUTURE OF ENERGY
Russia’s war in Ukraine will be in full swing at the conference. When it comes to climate change, the conflict raises two main questions: How should the country respond to the energy shock of a cut or cut from Russian oil and gas? And will war accelerate the transition to renewable energy or help fossil fuel companies maintain the status quo?
Since the war began, there has been no shortage of business, environmentalists, and political leaders trying to influence the answers to those questions, which will carry over to Davos.
“Energy Security and the European Green Deal” is one of the panels where participants are expected to argue that the way forward is far from fossil fuels. But European countries, some of which rely heavily on Russia for energy, are also struggling to find other sources of natural gas and oil to meet short-term needs.
While none of the sessions explicitly made the case for doubling reliance on fossil fuels or expanding extraction or exploration, if the last few months are any guide, that point of view certainly will.
Peter Prengaman is Associated Press’ director of global environmental and climate news. Follow him here: http://twitter.com/peterprengaman
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