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Valuing Nature: What Success at COP-26 Would Look Like

Wednesday 3 November 2021

Watch the recording of the event here:

CGM’s first event during COP26 was also its first collaboration with the State Department of the United States, featuring Prof Dr James Salzman, the Donald Bren Distinguished Professor of Environmental Law with joint appointments at the UCLA School of Law and at the Bren School of Environmental Science & Management at UC Santa Barbara, also the fifth most cited environmental law professor in the field with over 100,000 downloads of his articles.

This was followed by contributions from Meena Raman, Legal Adviser and Senior Researcher at Third World Network, an independent non-profit international research and advocacy NGO. She has been involved in issues relating to development and developing countries, in particular, human rights. She is also the President of Sahabat Alam Malaysia and a Legal Advisor to the Consumers Association of Penang. Meena has practiced public interest law for over 25 years, representing grassroots communities taking on big corporations in Malaysia.

The final speaker was the passionate and articulate Chandran Nair, Founder and CEO of the Global Institute For Tomorrow (GIFT), an independent pan-Asian think tank with offices in KL and Hong Kong, focused on a deeper understanding of global issues including the shift of economic and political influence from the West to Asia, the dynamic relationship between business and society and the reshaping of the rules of global capitalism. Chandran also sits on the Executive Committee of the Club of Rome, a distinguished global grouping of scientists, economists, business leaders and former politicians, who identify solutions to complex global issues, including to address planetary emergencies such as climate change today. Chandran is a regular speaker at the World Economic Forum (WEF), APEC Summits, OECD events and various UN conferences and a member of WEF’s Global Agenda Council on Governance for Sustainability.

Dr Salzman’s presentation touched on the importance of ecosystem services or natural capital as public goods which are enjoyed by all but cannot be owned and often, are poorly protected. How can trees be worth more standing than cut down? After all, they are valuable carbon hubs and carbon sinks, especially when growing and when forest is burnt, it loses the sink’s capacity and becomes a source of emissions (or net emitter).

There are examples of incentive structures, notably New York’s Catskills watershed where the state chose to invest in green or natural infrastructure to protect its sources of water, which cost significantly less than an investment in grey or built infrastructure, such as a dam.

China was another example of the largest payment for ecosystem services (PES) program in the world, costing USD43 bil (2000-2010) where payments for tree planting on erosion-prone slopes and setting aside cropland was paid for via cash and grain subsidies.

Touching on COP26, while the financial pledges fell far short of the USD100 bil per year committed and cumulative impacts of submitted NDCs were underwhelming, with current policies leading to 2.7-3.1^C of warming, while pledges and targets are leading to 2.4^C of warming, Dr Salzman felt that the Conference Of Parties was an important forum for continuing the process of discussions and negotiations, that momentum would build pressure for action and reinforce the roadmap which was critically needed.

Meena Raman had to travel to Glasgow and pre-recorded her conversation with Chuang.

Meena reminded us that common but differentiated responsibilities (CBDR) underpinned the UN’s Framework Convention on Climate Change (UNFCCC). Any ambition needed to include the 4 pillars of finance, technology transfer and capacity building with the concept of loss and damage being critically important.

She reminded us that the developed world has increased their emissions; instead of the 45% reduction agreed upon, Annexe 1 aggregate emissions has only achieved 13% reduction (1990-2018).

Another failure to deliver was financing needed by developing countries: instead of mobilising USD100 bil pa by 2020, the shortfall has been estimated as ranging from USD80 bil (OECD estimates) to USD28-29 bil (Oxfam and other estimates).

UNCTAD has also analysed that many developing countries will no longer be able to achieve Agenda 2030 (Sustainable Development Goals) and the Paris Accord due to the pandemic, rising indebtedness, difficulties with economic recovery and more households moving into poverty.

Taking into account the coordinated and unprecedented scale of response needed, social and environmental challenges, UNCTAD estimates funding equivalent to 2% of global GDP annually USD1.7 trillion pa will be required.

While stated global aspirations are crucial, with parties ensuring a balance between emissions by sources and removals by sinks by mid-century, the latest Assessment Report 6 is clear that the remaining global carbon budget (for more than 50% probability of limiting temperature to 1.5^) is only 500 gigatonnes or approximately 42 GT pa in the next decade.

In which case, whose interests are we pursuing with net zero targets, if developed countries such as the US and the UK are aiming to be net zero by 2050? Shouldn’t it be steep reductions in emissions or even targets to be negative by now, with no further room for developed countries to continue to emit. Production gap reports clearly demonstrate that developed countries are not phasing out fossil fuels but continuing to explore and extract.

Meena agrees we need a global approach to a global problem but the world appears increasingly isolationist, globalisation seems to have lost its momentum, the world can be saved, especially the poor, but efforts need to be much more far-sighted with less confrontation, geo-political constructs.

Chuang then introduced Chandran Nair.

Chandran reminded us that while China is the world’s biggest polluter, it is also the most populous thus the carbon footprint is attached to their right to energy.

Recent commitment to deforestation by 2030 echoes earlier resolutions in 2014 while the proposed 30% reduction in methane emissions in the US presages a huge battle with the domestic fracking industry. Meanwhile, the US has asked the Kingdom of Saudi Arabia to produce more cheap oil.

Chandran made us think about the rights or freedoms which we are entitled to on a crowded planet. Liberal economic narratives encourage humans to consume whatever they want, while curbing consumption is cast as an infringement of civil liberties but is this the reality on a finite planet, where we simply are not able to consume whatever we want. In this case, what does one-car policy look like to get transition going?

As for financing the transition, China has internally funded a huge reforestation program by not borrowing money or offsets, which values the forests created and generating social impacts.

Critically, local institutional capacity is needed, with a strong accompanying legal framework and rule of law whereby transgressions such as incursions into forests or dumping of chemicals into rivers are penalised, and institutional issues such as rent-seeking practices must be addressed head on.

Leadership is required at corporate level, not just in compliance with laws and regulations but beyond that, as a responsible leader. The traditional business model of a purely profit motive needs to coalesce with environmental concerns: businesses and shareholders simply should not have a right to a profit if externalities or the social cost is too high, as determined by the state.

If business leaders are committed to this agenda, they must take action, including developing science-based technical competence within.

Many thanks to moderator Khoo Hsu Chuang, journalist and entrepreneur with experience in internal audit, tax consulting and financial media, over a quarter of a century’s experience working in and covering corporate, financial and capital markets in KL, Singapore, Tokyo, Hong Kong and London.

Reading materials:

Chandran Nair

Books recommended by Chandran Nair [hyperlinked]:

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