Issue link: https://maltatoday.uberflip.com/i/1425443
T he COP26 climate change confer- ence in Glasgow has been labelled as "the world's best last chance to get runaway climate change under con- trol" hosting around 120 leaders. e event will stretch over two weeks of glob- al negotiations to help determine wheth- er humanity can drive forward the urgent action needed to avoid catastrophic cli- mate change. e World Economic Forum argues that for COP26 to ensure success, it must address the key issues of finance, energy, mobility, heavy industry and heavy-duty transport. e four main goals that the conference aims to achieve are ambi- tious, especially given the slow progress made on climate change initiatives since the Paris Agreement of 2015. e most challenging is that of securing global net-zero emissions by mid-century and keeping 1.5 degrees (temperature rise) within reach. Participants have diverse interests, preferences and mandates. No country will agree to do more on climate change than it believes it can afford at home. It is encouraging, that so many countries and the EU have pledged to reach net-zero emissions by 2050. Small countries like Malta have a mini¬mal role in combatting global cli- mate change. Still, our size should not prevent us from fostering a culture of re- spect for the environment, for too long a low priority for our policymakers. Some studies show that Malta will be among the Mediterranean countries most badly hit by hotter temperatures and a rise in sea water levels. Tourism, one of the most productive forces of its economy, would suffer if summer temperatures became too un- comfortable for visitors. Pundits doubt about the chances of success at COP26, as mixed signals have been sent by the largest emitters of greenhouse gases. Many believe that climate change can threaten the resilience and safety of peo- ple, sometimes causing them to become displaced from their homes and commu- nities. e question is - are we too late to talk and discuss future remedies? In fact, the world is already experiencing chang- es in average temperature, shifts in the seasons and an increasing frequency of extreme weather events, forest fires and other climate change impacts. It goes without saying that the faster the climate changes, and the longer ad- aptation efforts are put off, the more dif- ficult and expensive a remedy will be. Finally, there is a commitment to mobi- lise finance, to take action on a targeted $100 billion global fund. Prior to COP26, the UK Prime Minister Boris Johnson announced a funding package, as part of the UK's Clean Green Initiative, to sup- port the rollout of sustainable infrastruc- ture and revolutionary green technology in developing countries. All this is the fruit of the Paris agree- ment which set an ambitious goal of lim- iting global warming increases to well below 2°C while pursuing efforts to limit the increase to 1.5°C. Even limiting glob- al warming to 2°C will require nothing less than transitioning to a carbon-neu- tral economy by the middle of this cen- tury. Regrettably both the Chinese President Xi, and Russian President Putin, decid- ed to skip COP26 while India, the third biggest greenhouse gas emitter after China and the US, has rejected calls to announce a net-zero carbon emissions target. One can understand that such de-car- bonization measures involve high costs, especially for poorer developing coun- tries that face other daunting social and economic challenges so richer countries must commit themselves financially to enable such countries. Starting with Malta, which relies on burning fossil fuel to generate electricity it takes millions to convert to green ener- gy. Decarbonising electricity generation, transport and heavy industry require a small revolution to enable Malta to be- come emission neutral in the next 29 years. Malta's prime minister was report- ed to confirm that the island has chosen decarbonisation as a pathway and a pillar for its economic vision. Really and truly, there are many chal- lenges to achieve this goal and its po- litical class are careful that transition is just and does not create disparities and social injustice. Rhetorics dictate that the government will create the right condi- tions and a level playing field to facilitate the necessary shift for the private sector, business and civil society. Reality depicts a different picture since there are many obstacles to de-carbonise without upset- ting unforeseen social cohesion. Back to the Paris Climate Change Agreement, which was decided in 2015 to encourage countries to reduce emis- sions, possibly based on a market-based system. is should promote greater ef- fort in terms of mitigation of emissions and it should foster sustainable develop- ment from the private and public sectors. It follows that guidelines for the Paris Agreement respect the different capabil- ities and socio-economic realities of each country - be they rich or poor. It recog- nizes that developed countries should continue to take the lead in mobilizing finance to support climate action by de- veloping countries. e emissions trading mechanism rec- ognizes that countries or companies that reduce emissions below their cap have credits to sell measured in tonnes of CO2 equivalent. Countries and compa- nies that don't meet their target can buy these one-tonne units to make up the shortfall. ere are a number of benefits to emissions trading. Flexibility is an important one. Compa- nies can better plan their capital invest- ments and climate action in the medium and long term, knowing that in some years they can buy units to help meet their reduction targets. In other years they might have units to sell. is is an- other benefit of emissions trading – it creates a monetary incentive to reduce emissions. When in 2017, former US president Donald Trump withdrew from the Par- is climate accord there was a feeling that any effort to reverse the adverse effects of climate change was bound to fail. Ra- tionality returned when president Joe Biden reversed his predecessor's deci- sion, even though he faced tough oppo- sition from some US lawmakers whose states are critically dependent on the ex- traction of fossil fuel. One notes how China is taking a longer and realistic route. It committed to achieve carbon neutrality by 2060, which would reduce global warming by 0.2°C to 0.3°C by 2100. In the meantime, Chi- na continues to build coal-fired power plants. In conclusion, let us hope and pray that the COP26 meeting will reach some form of consensus on how to bridge the great divide among the 120 attend- ees. Will they reach consensus how best to save the planet from unruly climate change? With Russia and China not attending, can COP26 succeed? George Mangion George Mangion is a senior partner of an audit and consultancy firm, and has over 25 years experience in accounting, taxation, financial and consultancy services. His efforts have seen PKF being instrumental in establishing many companies in Malta and ensured PKF become one of the foremost professional financial service providers on the Island 8 OPINION 4.11.2021