End of year - seeing the elephant
COP28 for climate security, US climate assessment and a short rant on the business of doing geopolitics
It’s been a minute, innit? My radio silence over the past couple of months comes from simply: “life happens.” Much like the namesake of this post’s graphic, some things can only be learned via challenging experiences. But the climate space - from policy to emerging risks and solutions - continues its relentless march, if not always to a steady rhythm.
There’s been a wealth of content in the pipeline I’ve been meaning publish, so rather than trying to do it all at once, I’ll gradually release them in the next couple of months. In the meanwhile - and keep you, dear subscriber, in just a bit of suspense - next week I’ll be sending out a stocking stuffer of links to read to your heart’s content over the holidays!
This edition we’ll discuss:
COP 28: what to take away from it for both those on the climate and the security side of the ecosystem
The US’ Fifth National Climate Assessment - the closest thing we’re gonna keeping getting to a climate security and resilience north star in the country most responsible for historical CO2
Rush for geopolitics gold dust - who’s seeing the elephant?
COP28: how many rabbits out of the hat?
Carbon Brief has invitingly laid out the brass tacks of what kinds of topics and action items were discussed, agreed, postponed or dropped in Dubai.
Couldn’t be there but what caught my eye?
🛟🤑 That loss and damages fund finally made progress after much hand wringing over the past few COPs to move this beyond an unfunded mandate. The fund - once established at the World Bank - would provide financial assistance to mainly less developed nations / small island states to respond, recover and plan for physical damages to their communities and peoples from climate change impacts. Suitably funded and managed, this provides a much needed resilience lifeline for the most climate-vulnerable nations most at risk from loss of livelihood, community dysfunction, food and water insecurity, and involuntary migration. For these nations, this was THE big ticket item they wanted, though it fell short of their demands. This was also a much needed coup for Emirati diplomacy who were under immense pressure to put runs on the board after taking some licks from the media in the weeks prior. But how much money will there be? By the end of the conference there was just shy of $800m in commitments, but no obligation for wealthy nations to contribute: the US floated less than $2m essentially as a goodwill gesture and we shouldn’t hold our collective breath to expect more heading into an election year. Let’s see how much of that $800m appears in 2024 when the fund is expected to first disburse.
There’s no name for this fund yet, so let’s help out the World Bank?
📐 The Santiago network is meant to provide technical assistance alongside the loss and damages fund - it should serve as broker / coordinator / clearinghouse to connect needs with expertise. The UN will lead on this, but it is expected that nonprofits and the private sector will bring their competencies to the table to make the network a success. I for one see this as a key opportunity for the UN, development banks, ICRC, etc to partner with a range of consultancies, startups, engineering firms, etc to ensure a good ROI on committed L&D funds.
🎢 The global goal on adaptation, a fund on adaptation and a committee to track progress on adaptation, was another major focus area for the Global South. Unfortunately, many of the initial demands to double adaptation funding from 2019 levels by 2025 ($50bn) and aspirational target of $400bn / year by 2030, were dropped in the final text. They did agree however, that the global goal on adaptation should consist of progress on food, water, health, ecosystems, infrastructure, poverty eradication and cultural heritage. Ultimately, wealthy countries and major oil producers succeeded in kicking the can on $$ down the road. Oh, and no real progress either for national adaptation plans akin to those for carbon emissions.
💸 As various folks in the adaptation finance world I’ve spoken with have pointed out, adaptation is an umbrella theme for which there is no agreed criteria for what to measure (there’s no CO2-like thing to focus and aim money, time and labour at). As such it isn’t a distinct “sector” or asset class in its current form, which makes unlocking billions in private capital tricky at best and unlikely without a policy or regulatory push. For those in the development world, emerging and frontier markets (e.g. the G77) and the private sector, these are all frustrating developments as the world is only marginally closer to seeing an actionable, funded framework with some teeth to drive adaptation investments - and in many ways substantive funding to enhance climate security where it’s needed most.
🌾 Food security: lots of talk, a declaration and a few pledges (The Bezos Fund pledged $57m for low-methane food solutions) but short on progress. Given the strong evidence linking food insecurity as a contributory factor to conflict (this, this and this for starters), there should be a harder push on this from the climate security lens.
⚖️ Just transition: another big ask from developing nations / G77+China, decarbonisation has to involve the inclusion of the rights of workers, indigenous peoples, vulnerable and underrepresented communities. That it’s in the final text is seen as progress but how it’s really incorporated into a future global goal on adaptation will be left to future COPs and side meetings. I wrote on climate justice a few months ago on how ignoring this element of our transition risks causing more harms or repeating past cycles of exploitation.
🧊 Cooling: the UAE led a cooling pledge at the conference to cut 68% of cooling-driven emissions across all sectors by 2050 v 2022 levels, or 78 gigatonnes of CO2. There were callouts to establish or modernise national building codes to encourage efficient / passive cooling systems, greater use of blue and green spaces in urban planning, new refrigeration technologies and local heat action plans. As part of meeting net zero / sustainability targets, many companies have already made progress around cooling to reduce their energy consumption. With clear but entirely voluntary COP-level targets, let’s hope the “built environment” / “supply chain security” theme which can include cooling solutions make progress in the coming year - there’s a lot of good solutions both on the market and in development in the tech space.
🚨 And finally, climate security got a shoutout! There was plenty of discussion at COP28 (Valentin Hervouet at UNDP created a handy Trello board of content of all the happenings). And yes, there was a declaration on this and well done to those to get it on the agenda. While entirely voluntary, the document calls for greater integration of climate-security related concepts: peacebuilding, post-conflict recovery, climate resilience, into existing and future climate fund programming and disbursement decisions. Again let’s see where this goes and if we see more mentions in bigger-ticket pledges within the climate fund / global goal on adaptation agreements in COP29.
In total, it’s hard how to feel coming out of this year’s COP: should we be hopeful? Dismayed? All of the above? While the conference could have achieved much less (there was a methane and the big oil and gas reduction agreements too), those wanting to see greater progress were inevitably going to be disappointed. And in a year of high inflation and continued fears of recession in much of the developed world, those in the rooms were even less likely to stick their metaphorical necks out. In a way, this reflects the game theory-driven sword of climate geopolitics: countries should invest in their and each others’ resilience via the energy transition so they DON’T spend more on military and public safety in future years, and yet current energy / economic security needs → national security / more people voting than ever in 2024 → meh.
But, the doomers can’t always have their way - let’s not forget, objectively, that so much progress has been made, the momentum of which cannot be reversed with a snap of the fingers.
America sizes up climate risk again
I’m still chomping through the US’ 5th national climate assessment, but man there are some sobering figures. I’m just going to throw out one of many:
Even if we take the relatively “conservative” 2.0C rise - as we’re on track without abatements towards 2.7C by 2100:
a tripling of extreme heat (95F+) days
doubling of rainfall in the northern half of the country, with each instance more likely to drop much more water
over 2ft in average sea level rise, and up to 50x more likely major coastal flooding compared to the past three decades.
And the report explicitly highlights how this is a very real, today problem. As someone whose job is to persuade others why stuff matters and what we need to do about them, my thoughts immediately turn the report as fodder for effectively messaging risks across a range of audiences and demographics. If you’re an incident manager, head of regional security, project implementation manager, some or many of these may apply to how to manage your people, assets, travel and duty of care.
I love the multiple, well-considered and framed, callouts for how carbon removal and adaptation efforts can work in tandem to hit the goals of climate mitigation and resilience. While the word “climate” is in the report’s title, we don’t really need it in many conversations to get the job done, whether that’s persuading skeptical leaders, improving internal plans, or unlocking precious budget.I’ll cover a bit more on the assessment’s findings and so whats in the new year.
Geopolitics gold rush (1/x)
I’ve written on this, and my mate Lewis Sage-Passant has often commented on the business of geopolitics. Lewis quite rightly points out that the perceived “nature” of geopolitics - it’s not interest rates or credit risk - means many firms are wandering in new territory in search of answers that make them feel / be better - and some will see the elephant before finding what really works for them. As always, some providers bring the real deal, others may be better described as “grifters” (click here to learn how to use the term in your daily lives).
Traditional Big 4 consultancies, specialist outfits, lobbying firms, data sellers, think-tanks and universities are all really getting in.
How to navigate this? I would suggest that the phrase should be firstly demystified and treated as another critical business risk. Take the Hollywood and “secret squirrel” allure out of it.
It’s also not a “new” or “emerging” risk. It’s always been there, and frankly private companies and businesspeople have had to navigate geopolitics and conflict for most of human history - we’ve been graced over the past generation with the fruits of globalisation and pax Americana where huge chunks of global commerce did not have to factor geopolitical risk seriously, consigning it to tail risk or black swans. Oh how quickly forget the hard lessons of past generations.
Get over these, and we can start to talk business: risk identification, gap analysis, stress testing, strategic and crisis planning, response and recovery - the works. On the hedging / $$ side, I’m cautious of much of the current forecasting out there based on really hypothetical scenarios like a nuclear apocalypse over the Taiwan Straits and attempting to link it to economic losses and hedging strategies. Much of it feels like shoehorning existing types of models to this type of non-financial risk. Effective scenario analysis which is regularly / continuously calibrated by dedicated internal experts, partnering with quants, economists and risk managers to connect the dots, is a (more) promising avenue, imho.
Rant over…happy holidays!