The New Race to the Top: Learnings from the Leaders Summit on Climate

With questions over the impact of COVID-19 on the COP26 climate summit in November, the importance of the Biden Administration’s 2021 Leaders Summit on Climate in entrenching global commitments to tackling the climate emergency this year cannot be overstated.

Carbon emissions are expected to rise sharply in 2021 as countries seek to stimulate their economies following the devastation of the pandemic.

Yet even with fiscal pressures, geopolitical tensions and more, we may have seen an unprecedented “race to the top” on emissions targets, with leaders moving as a united force to tackle the climate emergency.

America is “back” – but will it last? 

UK Prime Minister Boris Johnson set a high bar just ahead of the summit, with the former climate sceptic committing the UK to a new, more ambitious target to reduce its emissions by 78% of 1990 levels by 2035.

Not to be outdone, President Biden went one step further, setting a “game-changing” emissions cut for the United States of 50-52% of 2005 levels by 2030. It underscored the re-emergence of the United States’ much-needed leadership on “the existential crisis of our time”.

However, the resurgent United States still must address its domestic political battles, a legacy of four years of backwards movement by President Trump.

While the White House insists its approach will create new jobs and economic opportunity, Republicans are already claiming that it will harm employment and growth at exactly the wrong time.

The fault line could prove problematic for Democrats’ control over Congress and vital federal climate funding, and will force businesses to pick a side, shaped by both the rising public pressure on climate and the financial realities of supporting existing high-polluting industries.

Green diplomacy lifts standards – and potentially boosts multilateralism 

Johnson and Biden’s new targets set the tone for other leaders to follow.

Japan, the world’s third-largest economy, doubled its 2030 target to 46% compared with 2013, and Canada set a target of up to 45% reductions from 2005 levels, highlighting how a new “green diplomacy” is yielding strong results.

That will continue – as more countries recognise that significant action on climate earns a seat at other tables, including on economic, development and humanitarian topics.

Simultaneously, the global multilateral system may regain its footing on climate after being battered and bruised by populist movements, Brexit, and the Trump presidency.

The Leaders Summit showed the potential for countries to both move more quickly in the same direction and coordinate more closely.

But we’re not there yet. There was significant disappointment that India and Russia failed to follow their peers’ lead.

And while President Xi affirmed the importance of urgency and collaboration, China did not announce a more aggressive target in place of its 2060 net-zero commitment.

Climate strategies require closer coordination – and more private sector involvement 

Despite the forward direction of travel, the process to measure and reach these significant new targets remains disjointed.

The United States is focused on technology and innovation as the primary way to have an impact, while Europe continues to prioritise carbon pricing schemes that will make pollution expensive.

It raises the question of whether the EU can achieve the economic benefits of addressing climate change – and whether the United States’ approach will have enough impact.

How Washington, London, Brussels and others and others align their green investments in lower and middle-income countries is equally critical.

Climate change cannot be solved without huge progress on climate finance in developing countries, particularly in sub-Saharan Africa and South and Southeast Asia.

An obvious start would be the coordinated end to fossil fuel subsidies, a move that could potentially claw back north of $30 billion for the U.S. Government by 2030.

The private sector can play a stronger role as well, adapting its investment priorities and rolling out new technologies, particularly in electricity generation. The rewards could be significant as their products are adopted at scale, if they take the leap now.

What next: Business leadership ahead of COP26 

Governments increasingly recognise that simply setting ambitious targets has limitations.

They need business to help achieve them. On the back of the Leaders Summit, the world’s multinational companies have an opportunity to step up by committing to strong net-zero targets.

Momentum is critical and companies that maintain it will benefit by being part of the positive attention in this year of climate action.

In practical terms, that means now is the time to engage – not six months from now at COP26.

Businesses thinking about their climate plans need to put communications activity at the heart of them.

Educating and engaging with stakeholders and the public over the next half-year ahead of COP26 will help companies earn their seat at the table in November and give them a platform that carries on afterwards.

Want to know more? Get in touch with FleishmanHillard’s COP26 Unit – cop26unit@fleishman.com.

Michael Hartt, Partner and Head of International Affairs, and Luke Downham, Policy Lead, COP26 Unit

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