Gates said the next big step would be getting people to put their money into things that are provably having a positive impact on the environment.
New Delhi/Davos: Many companies have begun taking carbon into account when they make investment decisions and they stay away from investments that are generating carbon, top entrepreneur and industry leader Bill Gates said on Wednesday.
At a panel discussion on carbon markets during the World Economic Forum’s online Davos Agenda Summit, Gates further said the next big step would be getting people to put their money into things that are provably having a positive impact on the environment.
During the same panel discussion, Mike Carney, United Nations Special Envoy for Climate Action and Finance and also Finance Adviser to UK Prime Minister Boris Johnson in the run-up to the COP 26 climate summit in November, said that we have less than a decade of carbon budget to remain within the limits of a 1.5C temperature rise.
A voluntary carbon offset market does four things — Firstly, it’s complementary to the company’s efforts to reduce absolute emissions, It’s also catalytic, not for renewable projects in advanced economies, but for projects in emerging and developing economies where the economics are not quite there. Third, this market is cross-border, it’s voluntary but is being driven by companies making these net-zero commitments from – mostly – in G7 or advanced economies looking for high-quality offsets in developing or emerging economies. This is a potentially huge cross-border flow. Lastly, this market has the potential, if properly structured, to have enormous co-benefits for biodiversity, co-benefits for other SDGs, although rooted in high integrity, highly credible, open and transparent carbon offset market.
Bill Winters, Group CEO of Standard Chartered Bank; said he has been around the voluntary carbon markets for years, and to date, it has never really taken off and is nowhere near as robust as it needs to be to get us to net-zero by 2050. Annette L Nazareth, the former Commissioner of the US Securities and Exchange Commission, said this is a foundational step to ensure quality and also for forming the basis for reference contracts. Reference contracts will in turn drive liquidity and price transparency and allow more high-quality projects to be financed.
Nicole Schwab, Co-Head of Nature-based Solutions, World Economic Forum Geneva, asked Gates that nature-based solutions were going to be a critical part of achieving net-zero, but what else was needed? She also asked Carney about the prevailing views that offset markets are just greenwashing and it lets companies off the hook, allowing them to buy their way out of doing anything.
Carney said, “I categorically reject it and part of this is putting companies on the hook, this process that Bill Winters referenced, we have 1500 of the world’s largest companies are now in a position where they are making these commitments, all of a sudden, once you are making those commitments and participating in the type of offset market that this report recommends, it’s not just a commitment.”
“It’s a commitment which has a net-zero plan, which is rooted in science-based targets if those are available for your sector, and as those watching will know, that is spreading across the sector, so not just a plan, not something you have written on the back of a napkin but one rooted in sigh hence based targets, annual reporting requirements, that’s one of the recommendations in terms of your absolute reductions…” he said.
He called for turning over the capital stock for proven economic technologies like existing renewables, solar, wind and others, to get absolute emissions down, and secondly to put big money and a lot of focus and a lot of smart people around the type of breakthrough technologies that we need ultimately to get to absolute zero, where around hydrogen, direct air capture or sustainable jet fuels. Gates said some of the best money ever spent on climate was what Germany and Japan did buy solar panels when they were still being sold at a high premium cost, which he called the green premium.
“Because after all, if a green product is very high priced, there’s no market for it, but if you drive that volume up, then that price delta can come down, and so I do think that really proving to people that the quality of these offsets is strong,” he said. “But, the other is the idea of this catalytic impact, and getting some of this money to go into taking the hard parts, the high green premium parts, and getting those on the learning curve, and giving companies that do that, buy all their buildings with green cement, green steel, and bootstrap, like solar panels, we want to give credit to those companies,” he said.
Our learning curve is the only way that you get the entire market for those products to shift to green, Gates added.
Source: PTI
