Mia Motley, the Prime Minister of Barbados, gave the speech the world needed at the Opening Ceremony of COP26 asking when will leaders lead. “National solutions cannot solve global problems” (1).
The International Energy Agency (IEA) World Energy Outlook report 2021(2) clearly states that keeping global warming within 1.5°C parameters agreed at COP15 is possible but requires annual global investment in clean energy projects of US$4tr a year. The core message from the IAE WEO-2021 is a hopeful one and provides a clear-headed and realistic road map on how to achieve clean electrification, reduce methane emission, improve energy efficiency and turbo charge innovation.
The headline grabbing $130tr Glasgow Financial Alliance for Net Zero(3) (GFANZ) commitment made this week at COP26, representing 450 private firms across 45 countries, is certainly a flow of capital of the magnitude required by the IEA. The risk is, as Greta would say, that this is more Blah Blah Blah….
Is this US$130tr GANFZ Emperor truly wearing clothes?
The good news is that investing $4tr a year is eminently do-able. As Mia points out, we have just done that. Over the last eighteen month, Central Banks of the developed world have collectively made $9tr of financing available to support the global economy during Covid. Where there is a will, there is way. Governments and Central Banks are in the driving seat; the blue print to fund US$4tr is there, what are we waiting for?
(1) Prime Minister Mia Mottley addresses Opening Ceremony COP 26, 1st November 2021 https://www.youtube.com/watch?v=BsBVx_8oFm0