Bloomberg Green: COP26 Special
Chaos this morning at least for the day as high levels of water products services to Major West says we should brace for more of this or get some RTS in the. Along with the others in the room now it's becoming clearer longer assuming the temperature in this room is in India not certain that it is. No it wouldn't have been good to get an American back comment. What about COP26. What is the potential threat to the surrounding natural climate every day next to the ocean. That idea gets us together. What the U.N. is pointing to the very fact that climate change is happening. Charles.
All right. If you don't like all of us are here right now pick out the war we came about. That is the name of generation. Even under a warming planet there are reasons for Irish to try. Change is not the problem. Climate change is the expression of energy technologies to fundamentally transform the energy system at all. So how do we begin the process of reversing. These people are starting to mileage cars not just temptation Covid is now cheaper to build offshore wind for employment. Reliance investing.
Missed opportunity in agriculture. Optimists. One of the most important gathering of humanity already knows what to do in life. We can set up come a long way to go but there is momentum. Roll up your sleeves and do it.
Crucial talks urgent action a climate emergency. That was the rhetoric before this week's much awaited U.N. climate conference in Glasgow. Just two weeks after the U.N. said the earth was on course for a devastating two point seven degrees warming by the end of the century world. World leaders be willing to put aside their
differences to agree to real change. Can they set new net zero goals. Can they set the world on course to stop catastrophic global warming. Or as the activists gathered outside accusing those powerful people in the world of playing the blah blah blame game. Well the next two weeks and with an all too familiar platitudes and
no real commitments from Cop 26 in Glasgow on Francine Lacqua 1. Welcome to the special episode of Bloomberg Daybreak. Last week nations representing more than 80 percent of global greenhouse emissions actually failed to make progress. The G 20 meeting in Rome came to a close with no real update to 2015 Paris Climate Agreement. Countries agreed to halt new overseas coal projects but actually made crucially no commitments to domestic investments.
It left a lot to do here at COP 26 starting on Sunday October 30. First more than twenty five thousand delegates representing 200 countries descended on Scotland's second city with a single goal in mind. Progress a process known as the ratcheting mechanism means that every five years at COP parties are expected to enhance their green ambitions. So the UK's largest intergovernmental event since the start of the Covid-19 pandemic began with ambition. But familiar divides between the rich and poor nations threatened to undermine any new grand agreement on emissions. We all must speed up our race to net zero. We're running out of time. The United States is not only back at the table but
hopefully lead by the power of our example. My administration is working overtime to show that our climate commitment is action not words fronts. But more broadly the European Union as well as the United Kingdom are today ready to meet their commitments. India is the only big economy in the way that has delivered both in letter and spirit on its Paris commitments. Those promises will be nothing but blah blah blah. To coin a phrase the anger and the impatience of the world will be uncontainable unless we make this cop 26 in Glasgow. The moment when we get real about
climate change. This meant that it would come down to individual countries updating their indices or nationally determined contributions to show movement in the right direction. And that brought two of the biggest surprises at COP 26 so far. Even without the President Jay IBEX narrow Brazil committed to a net zero target by 2050 and India's Narendra Modi finally put a timeline on his own pledge to hit net zero. The goal is 20 years later than many had hoped. Meanwhile China whose presence here has been limited stuck to its 2060 outline to other agreements provided reason for optimism as leaders cleared out Glasgow and allowed their negotiators to get to work. The US and European Union's much
anticipated pledge to cut methane emissions got support from more than 90 countries. Those super polluters China and Russia held out. Plus a UK led the declaration from more than 100 countries to halt and reverse deforestation by 2030. Unlike previous plans the one announced this Tuesday was backed by Brazil home to 60 percent of the Amazon rainforest and Russia home to the world's largest expanse of temperate forests. It also came with 19 billion dollars of commitments from both
governments and companies. We have to stop the devastating loss of our forests these great teeming ecosystems trillion pillared cathedrals of nature 3 trillion built cathedrals of nature that are the lungs of our planet. Finance is also playing its role at the conference. As a supporter and facilitator. Mark CARNEY presented a scorecard for the financial industry on Wednesday and Bank of America's Brian Moynihan backed unilateral action from corporates on a green transition. We'll hear more from our conversation with both of them later on. But now let's talk. The big questions what will it take to get countries to agree one up. The Paris agreement and limit global warming to one point five degrees. This isn't just something we have to do to protect the environment in future. It's an enormous opportunity enormous
opportunity for all of us all of our nations to create jobs and make meeting climate. A core part of our global economic recovery as well. We've been speaking to European leaders about that very topic. It will work only if all the world is all the countries. If the private companies if not in the same boat following the same direction. What we see is fires that were becoming much more intense and much more difficult to contain. We know this is a
direct consequence of climate change. We know we need to do more to manage our forests better. And of course as a European Union and I think we need to do more to strengthen overall our civil protection. I am more optimistic about the Globe outcome in the sense that for the first time in many 20 years we were able to come to conclusions collectively. I am cautiously optimistic that we can get somewhere in an extra weeks. But it's not just leaders of Western countries in order to make camp a success. Leaders from emerging economies also have to get onboard. While we've been speaking to the president
of Costa Rica Carlos Alvarado Quezada who says the targets given by developed nations don't go far enough. There's the discussion of the developing countries are too risky. But here the only risk I see is that if we don't act there there won't be any planet anymore. So I don't see any risk higher than that. One risk is a matter of this measure also in time frame. You said you feel cheated by some of the top emitters. I mean they also come from the developing world. I think we need to to go further in our commitments. Coming up on the agenda at COP finance firms representing 130 trillion dollars worth of assets sign up to net zero pledges. We'll talk
Finance's lofty climate goals at COP 26 and hear from Mark CARNEY Brian Moynihan and Rishaad Salamat. That's next. This is. Welcome back to Bloomberg Daybreak. I'm Francine Lacqua here in Glasgow for the Cop 26 summit. Now banks and asset managers representing 40 percent of the world's financial assets have now pledged to meet the goals set out in the Paris climate agreement. More than 450 firms representing 130 trillion dollars of assets now belong to the Glasgow Financial Alliance for Net Zero almost double the roughly 70 trillion dollars. At the time of its launch from Mark CARNEY who chairs the organisation the announcement marks a milestone after he managed to get some of the world's biggest asset managers and financial firms to sign up. We spoke to Mark CARNEY about the importance of finance coming together on this. To quote the secretary general's hopes unfulfilled but not yet buried. The one and a half degrees anchor in the G 20 communique is significant. Some progress but
we've got a lot of work to do. What week. The big question for this week at least for this Wednesday is what can finance and more specifically the private financial sector. What can it do to help solve this problem. So it's going to really have to step up. And there's been a lot of institutions a lot of people around the world have been working in order to do that. We don't even have a price on carbon. When will we get. Well we don't have a price on carbon.
But what I think our message on Wednesday to world leaders to policymakers to business people around the world is finance is going to be there and finance is going to be there in two respects. One we've we've retooled the financial system. We've changed the plumbing if you will the financial system a bunch of very worthy reforms that actually to be honest only the audience of Bloomberg would fully understand and appreciate. And we can go through them for the next hour. But I think mandatory disclosure I think stress testing all that support is retooling. But then it's also about financial institutions stepping up and say saying that they are going to finance this transition this enormous hundred trillion dollar transition that needs to happen over the next three decades. They're going to finance it and they're going to mark their own homework. They're going to show
up year in year out say what their emissions are of their clients have specific strategies for reducing carbon. Fair share of 50 percent down by 2030. That's what the Glasgow Financial Alliance is all about. Former Bank of England Governor Mark CARNEY they're currently serving at the UN as a climate finance and climate finance is also clearly a big issue for the big banks. I spoke to the Bank of America chief executive Brian Moynihan about what kind of pressure his industry is under to deliver on their green goals.
This is a transition a just transition. We all have to make as a consumer as a company as a company in everything you do everything goes on around. And so there's a lot of pressure on banks because our clients are demanding us. You know our investors are demanding this. The politicians the world's demanding this. And so if you think about in the context the SD you know that in 2015 the United Nations all the countries said we want this to happen sustainable development and now and now we've got to implement. But when you look at some of what Wall Street and banks in general can do could you stop lending to
businesses that pollute too much. Well that's the great debate. But to help everybody make a transition all our clients have to make a transition. Some of them extract minerals some extract fossil fuels. And they're all making those commitments. And our job as a financial institution is excess. Assess them on a risk basis. Honestly here's my plan. Here's where I'm going to go. And it's hard for them. I mean it's easy for a services firm to say to be net zero but it's hard for them. And we got to stay with them to help make that transition. They need capital to deploy. And so their plants their declarations and are seeing it
by many of them now saying we're gonna do this by this year then we can be part of the measurement system because as we underwrite them what the risk or underwriting is do they have a plan that meets the standards that the world wants them to have. And if they don't they're gonna have a problem financially down the road. And that's how we do it. So where's the biggest opportunity for banks if we did 80 billion dollars of financing last year. And it's a it's a business. And so we we have tax credits which we disclose in our 10. Q. The difference between our rate in our in our paid rate is all for wind solar and low and moderate income housing. It's a billion dollars a quarter in tax credits. That's how big a business do. So there's a lots of
opportunity to make money doing this. And in a money concessional capital we do that too with some of the work we do and more the charitable work and everything in between. But the thing that's hard for people to stand is this transition happens when we all work together to make it happen. And that's what's fun about this. Really disappointed that you don't have more
commitments. No. Governments can work a lot of ways. Simple mandates simple enablement permitting faster. There's a lot of things to do. And I think they're seeing as the private sector is pushing them before they were pushing the private sector more you have to disclose your scope. One two three. And the informal the NGO type of disclosure in a government that's coach. Now it's worth pushing them saying okay we'll do that. But really we need you to enable. So the multilateral development banks take the political risk away take some of the duration risk take some of the currency risk and you can unlock all this capital. Bank of America chief executive. Right now as the world's focus turns to finance and the climate fights we spoke to the U.K.
chancellor wishes Sinek says he intends to make Britain the world's first net zero finance sector. I think it is really important we take a moment to step back and look what's been achieved today. And you talked about this alliance fans as it's called which is not the name of a career pop band but it's been assembled 450 different firms. As you said represent 130
trillion dollars of capital that can be deployed in that area. That's an enormous achievement because we know that public funding is not sufficient on its own. That wall of capital can now be deployed towards a net zero aims helping developing countries. But of course it's going to be a process. We need to make sure that the governance works. It's high quality and that what sits there on a piece of paper is actually going to turn into tangible actionable projects on the ground that are going to make a difference to people's lives. Translator Cutting the aid budget overall but actually sticking to your pledge on climate. So what. We'll miss out. Well actually on all our aid budget what I said last week is on the basis of our fiscal and
economic forecasts that we put out we are scheduled and forecasts to return back to point seven percent of our GDP being spent on overseas aid by 2024. It's also worth bearing in mind that even at the level we're at now we are still the third I think the fourth highest in the G7 so far more than many other countries and significantly ahead of the RTS the average. So although there's been a lot of focus on a slight change I think the vast majority of people actually spend less as a percentage of their GDP supporting overseas development than the UK does. And obviously historically we've been at a very high level. And
as you see we can we can lead in other ways as well. You mentioned climate finance but as that as chairs or presidents of the G7 this year one of the things we've been determined to do is green the overall financial system. And we've been talking a lot about that today. How do we make sure that disclosure requirements climate risk reporting is all being embedded
mainstream and financial that the financial system to unlock that capital. Coming up Indian Prime Minister Narendra Modi surprised the delegates with a bold pledge. The world's third biggest emitter will reach net zero by 2017. We'll break down the details. That's next. And this is Bloomberg Daybreak. Welcome back to Bloomberg Daybreak Francine Lacqua here in Glasgow for the COP 26 sights. India the world's third biggest
emitter has traditionally been resistant to setting a deadline for net zero. That is until now. The Prime Minister General Modi stuns delegates with a promise to take his country to carbon neutrality by 2017. Now the target is 20 years later than many richer countries but India has been making strong progress on its climate goals. While reporter Archana Chaudhary has the
details. India has been highlighting how does the G. 20 nation which has made its commitments that were made in 2015 during the parties meetings and in the last 20 years. India has invested heavily in an Indian renewable energy capacity whether it is wind or whether it is solar. More importantly we've seen in the last few months India has been announcing policies like its national hydrogen mission. It has been expanding partnerships with US and the UK on solar as well as our technologies for renewables and raising finances. So it has been creating those ecosystem that is acquired. Woodward's
there's good. India is the world's third biggest in India because of its choice in humans. Its economy is heavily dependent on fossil fuels and the point remains India's will to fuel for electricity generation. And for this to change India being died Indian economy is going to require that overall it is its industrial systems are going to need a change and wouldn't want any Indians. We need to change the mindset of its people as well as it is
industrious. The even bigger challenge will be availability of finances to make this transition possible. So India will have to deal with this stumbling block as well as making possible the technologies that we need to move to New Zealand. India has been investing heavily in building capacities in the last 20 years and so it already has infused policies that that enable people to invest. Companies will invest in this sector. We also know that India's richest billionaires are making your money as well as got the money are looking at large investments in solar capacities as well as in hydrogen technologies. And
India has been working with its international partners. John Kerry was here in September always with the signed agreement for finance. So Bloomberg Surveillance is available for renewable energy. So we know that India is working on this. But whether it will be able to meet the financial backing available in time for there is going to be a transition that is John is that will need to see how his how they meet our reporter. There are enough Chaudhary in New Delhi now in speaking with India's environment secretary. Here's what he said. We are expecting our emissions to fix somewhere around between 2040 and 45. And after that it will be we will be increasing their users and boosting the net Jihye Lee. Now for more let's also bring in our climate reporter Ashraf writing on the ground with me in Glasgow. Oakeshott thank you
for joining us. This was a massive welcome. It really wins regulator the talks the fact that India decided glass gold cutlery sets to make a pledge to you and and 20 years later than what most of their countries are what the rich countries are aiming for. So net zero by 2015 we should recognise that what the sciences is that rich countries have to go sooner. And so it is no surprise that the US and the EU and Japan have the goal is to reach 2050. Germany has 2025 and it is not afraid that India has a leader and such as China Japan for instance. So when you speak to scientists 2070 still keeps the temperature at one
point five degrees. Crucial level. Yes. So the way to think about it is carbon dioxide is released 75 per cent of the warming properties that 25 percent of all other greenhouse gases nitrous oxide McCain etc. And what scientists say is that you need to get the net zero carbon dioxide by creating an energy of all greenhouse gases by 2070. So India's all that is actually going to keep the. Alain. DAX thanks so much. Climate reporter there. He was always as always really some great reporting. So will COP 26 actually be considered a success. It's certainly having a positive impact on climate
ambition. Announcements at Glasgow mean that countries responsible for eighty nine percent of the world's emissions now have a net zero target fixed or under discussion. This contrasts with 53 percent of the day before the summit began. And just 10 percent in January 20 20. We got deals on methane deforestation and as we just heard the world's third largest emitter finally
committed to road map from NYSE. Talks continue though. We'll be back next week with more on cop places. Keep the conversation going. Follow us on YouTube Instagram and Twitter. Twitter at Climate from Glasgow and Francine Lacqua. And this is Bloomberg Quicktake.