ZURICH, November 19, 2021 — Kevin Rudd, Asia Society Policy Institute and Asia Society president; and Andreas Berger, CEO of Swiss Re Corporate Solutions, kick off the discussion about COP26 and its implications for the Indo-Pacific. The first panel with David Bresch, professor for weather and climate risks at ETH Zurich/MeteoSwiss; and Hongqiao Liu, a writer for Carbon Brief, focuses on mitigation and adaptation. In the second panel, John O'Brien, partner, energy transition and decarbonization at Deloitte Financial Advisory Australia; Sophia Hamblin Wang, chief operating officer of Mineral Carbonation International; and Renat Heuberger, founding partner and CEO of South Pole, discuss collaboration and finance aspects of COP26 and in the months to come. This event is part of Climate Change in the Indo-Pacific, a four-part series by Asia Society Switzerland and Swiss Re Institute exploring the effects of climate change on the Indo-Pacific and the world. (1 hr., 56 min., 47 sec.)

Our key takeaways

Introductory Session: Did COP26 Deliver for Asia – and the World?
The COP26 climate summit in Glasgow is a case of a 'glass half full, glass half empty': many criticized that not enough commitments were made by countries, and that the ones that were made were not enough. A good example for this the commitment to phase out coal. However, the fact that coal was even mentioned for the first time can be considered a success. Furthermore, the high number of CEO’s and other key-stakeholder of the private sector and their commitments given was an unexpected, but positive outcome. It remains to be seen how effectively these commitments and pledges will be adapted.

While mining facilities and the energy industry in general is expected to be under pressure after Glasgow, no industry is exempt from the upcoming transition.

Litigations have not increased, they have always been there, but they gained more momentum and attention of the public eye. Future litigations are expected to target governments and large corporates, which also demands a change in strategy as these stakeholders need to be prepared for increased risk exposure.

During the last ten years, from COP25 in Paris to the recent COP26 in Glasgow, the public opinion towards climate change has reached a tipping point, and while stakeholders might be indifferent to it, shareholders are not. As a result, we are at the beginning of a change of legal processes, as the mobilization of public opinion gains more and more traction. Especially countries like China, India, and Australia, who have not risen to the challenge of renewing and improving their 2030 carbon reduction commitment, will likely become the focus of public attention.

To not lose momentum in the next months and years, we need to act on different levels, as we do not have the comfort anymore to wait, as Kevin Rudd expressed: “Governments may lie, politicians and corporates may lie, but guess what? Our planet does not lie. It produces its own data, and this data is expressed through temperature rises, through catastrophic and extreme weather, which in turn influences food production, and water scarcity.”

Panel 1: Risks – Mitigating and Adapting to a Changing Climate
While it is true that we are currently writing history as we are moving towards a global warming of 1.5 degrees Celsius, it is not enough – stakeholders from the public and the private sector need to be held responsible.

Glasgow can be described as a worthy successor to Paris, as we now finally have a reliable way to measure carbon compensation. This makes collaboration on a global level much easier, as it makes sure everyone is playing by the same rules. This also means that we can now talk about root causes and hold countries accountable. There is a new carbon pricing market emerging in China, which is scaling up fast and will impact the whole globe. However, in the foreseeable future, it is unlikely that carbon prices will be unified, as the countries are too different and at different stages of development.

Many were criticizing the final commitments made by key countries such as India and China. However, considering that it is a transformative process, this might be a one-sided view: The stakeholders in Paris were unwilling to compromise, which lead to a no-deal result. In Glasgow, on the other hand, coal and fossil fuel was mentioned in the pledge, showing the willingness of the countries to compromise in other to reach a common goal. While it is not perfect, it is a start to work with, as many NGO’s have pointed out.

China has different strategies in its current 5-year plan: The country wants to advance a new generation of multifunctional nuclear energy safely and steadily. Innovation and Research supports this step by bringing in further alternatives. But China also follows a plan for recycling and waste management, etc. However, the elephant in the room that was not addressed by country leaders is the agricultural sector and its production of Methane and other non-carbon greenhouse gases.

So, are the adaptations to climate change in Southeast Asian countries sufficient? In the region’s own interest, they better had be, even though some of these countries have not contributed to the problem as much as we have. Although financial support is important, the governance of risk and risk mitigation is almost more important. It is paramount that the countries affected get support in those areas as well.

Panel 2:  Opportunities – Collaboration, Finance, and Innovation
In terms of business, COP26 was a massive step forward: this was the first COP that was not primarily driven by governments, but rather by the finance sector and companies. The Glasgow Finance Agreement, in which 450 of the largest financial companies in the world agreed to reach net-zero by 2050 across all their portfolios, is expected to have a huge impact.

Clean tech companies play an important role in helping governments to get to net-zero. At the same time, they strongly rely on both public and private financing to get through the 'Valley (or rather Canyon) of Death'. Governments say that technology, not taxes, are going to be the solution. From the perspective of a clean tech company, while technology is important, a mechanism is needed to help drive innovation. Advocacy does not happen without money, influence, and power. And influence and power do not happen without investment and social capital. It is very important to try to level the playing field for new disruptive technologies.

COP26 was an important event because it brought a great diversity of people together who felt connected by a common ground, namely the purpose of making a difference, in their different worlds. Without enough diversity, we will not be able to make an equitable, inclusive transition into a 2050 future. Collaboration between different voices and thoughts is critical. Governments have to collaborate radically with communities andcompanies, which requires a different way of working, and this is starting now.

We have to move away from talking figures only, because 'money is not money': the main question is not how much money is involved, but rather: What kind of money is it? Is it flowing where it is supposed to flow? And do we have the right instruments to handle it?

We have great opportunities to make change possible. Currently there is an explosion of innovation and bright minds working on it. It is hoped that the younger generation can transfer their optimistic can-do mentality to their peers. The last thing the world needs is for them to fall into despair when they realize that the much needed change is not happening.