* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Political developments in Washington, Beijing and Brussels are of key importance, while renewables march on
In 2016, exciting new developments unleashed a visionary sense of where renewables can take us, with solar breaking new ground. 2016 delivered the first solar-powered round the world flight, plans to build roads paved with solar panels across four continents and solar roof tiles that blend into background. This is one of the most disruptive technologies the world has ever witnessed, and 2016 showcased its potential.
2016 was the year that the financial sector started to prick up their ears to climate-related risks. Mark Carney led the charge to alert his peers to the risks associated with stranded assets, and has helped mainstream this issue among the financial community. There is no silver bullet to ‘shifting the trillions’ from fossil fuels to cleaner investments, but strong steers from the top of the financial sector can drive momentum.
Structural reform of the world’s energy systems is delivering results. Renewables are beating coal, and the global economy is flat-lining for a third year in a row. The economics of digging up fossil fuels are no longer making sense and the atmosphere is seeing the benefits.
2016 was also the year in which the momentum from the Paris Agreement jump-started. The Kyoto Protocol took seven years to enter into the full force of international law, while the Paris Agreement took just 11 months, demonstrating the sincerity of countries’ commitment to the agreement. This was boosted by countries collectively agreeing to phase down the potent greenhouse gas - HFC - the result being the equivalent of taking 500 million cars of the road.
2016 was a troublesome year for the automobile industry. The combination of escalation of the emissions standards scandal, and the recent policies from China and Germany on electrification, demonstrate the potential for disruptive technologies to leap frog incremental climate action and exit fossil fuels. This trend was bolstered by the Norwegian Sovereign Wealth Fund declaring it will sue VW over the emissions scandal and the recent announcement by London’s Mayor demanding VW provide Londoners with compensation for additional pollution caused by diesel-gate.
But despite all the momentum, 2016 looks set to be the hottest year in recorded history. This comes on top of data showing that the Arctic is facing temperatures 20C higher than normal for the time of year. These startling records hit home and drive the sense of urgency required to tackle the challenge ahead.
CHINA TO SHINE IN 2017?
On the 2017 front, lots of the disruptive forces that were unleashed in 2016 - both progressive and sometimes regressive - should be on the watch list:
Given the recent political developments in the United States, China’s opportunism is one to watch out for. Chinese President Xi Jingping announced recently that he will, for the first time, attend the World Economic Forum in Davos next year, and he has already met with the incoming Secretary General, raising the issue of climate change.
More recently, Xi Jingping announced he will host a ‘One Belt, One Road’ summit in 2017 and, China has been confirmed as the host of the Convention on Biological Diversity summit in 2020. This is a key summit, where critical decision-making regarding targets will be made.
China’s prominence on the global stage is likely to raise interest in many capitals and the potential for shifts in the balance of power. China might be hesitant to step into the fold and ‘like for like’ replace U.S. climate diplomacy efforts, but on some elements they can certainly lead with confidence.
Recent political appointments for the U.S. incoming administration have raised eyebrows and heart rates. While uncertainty loomed in the immediate aftermath about where the incoming administration would sit, it’s clear the Trump team is firmly camped on the opposite side of the bench.
How this plays out in domestic and broader geopolitics is unknown, but it will make for uncomfortable spectator sport. However, the climate talks are no stranger to the United States being on the sidelines. What sets this apart from previous occasions is that the economics and state level politics work in our favour, and the Paris Agreement is not dependent on one single country, but a global endeavour. The COP in Marrakesh crystalised this, with many countries, mayors and CEOs outlining their determination to move onwards, despite how Washington proceeds.
While 2017 will wave goodbye to Ban Ki-moon, we will wave in the new United Nations Secretary General Antonio Guterres. In his recent speech he delivered an impressive, compelling and sobering set of arguments to make the U.N. fit for purpose and relevant for the global challenges ahead, characterising climate action as ‘unstoppable’. How his big ideas translate into reforms are still to be seen, but his record in office bodes well for a radical agenda.
The economics of climate action are self-evident, but in 2017 the attention must turn to the social implications of the transition. Failing to address these challenges, will render the transition impossible. In 2016, Germany, the United States, Mexico and Canada began to map out the choices for their future without fossil fuels.
The G7 has promised to develop these transition plans, and it seems like the German G20 Presidency also has them in its sights. Dealing with the politics of transition must be at the heart of how we implement the Paris Agreement, and these 2050 plans can act as a vehicle to better understand and learn from each other how to proceed.
In 2014 a decision by one country – Saudi Arabia - disrupted global commodity prices and made a material difference to the political, economic and social situation in countries like Venezuela and Russia. The agreement forged between OPEC and Russia in late 2016 will drive up fossil fuel prices to an extent, while it is expected that renewables demonstrate consistent positive trends.
2017 will bring uncertainty to Europe. Brexit will begin to take shape, the French elections will loom large over the continent, Merkel will stand again in the German federal elections in the latter part of 2017 and Italy will have a new Prime Minister, Gentiloni - all in parallel with Europe hosting both the G7 and the G20. 2017 has the potential to reshape Europe and its purpose in the wider world.