One of the challenges writing about news as it unfolds is identifying the clear narrative: reality can be messy, and narratives aren’t always clear cut.
That dynamic was on full display here in New York this week as a mix of government officials, corporate executives, and civil society leaders gathered to talk about climate change at a time when the world is on a complicated and varied path towards decarbonization. So-called New York Climate Week isn’t so much a conference as it is a mix of meetings and side events, all surrounding the United Nations General Assembly. And while some question the merits of the summitry, it’s a great place to get a sense of how people who work on climate issues are thinking about the latest developments.
And, man, is it complicated. On the one hand, the transition is powering ahead rapidly. Investment in clean energy has accelerated quickly in recent years and, despite anti-ESG efforts, corporate investment in decarbonization continues. On the other, a knotty mix of political and economic headwinds have clearly slowed down the push for more ambitious policy. And corporations—keen to make big commitments only a few years ago—have realized that implementing is harder than announcing.
“The long era of robust economic growth, low inflation, and geopolitical stability is over,” Oliver Bäte, the CEO of German financial services firm Allianz, said at the U.N. “Suddenly, fighting climate change has become an ever greater challenge.”
These hurdles are concerning for anyone worried about rising temperatures and the dangers to humanity that inevitably follow. But there’s another way to think about it: challenges are a signal that the energy transition is in full swing. How we respond next will be crucial.
To understand this dual narrative, it’s helpful to look at government and the private sector independently.
In the private sector, a growing group of companies have made bold commitments to decarbonize in the coming decades. Those commitments earned praise when they were first announced, but companies now need to deliver. Many businesses began with whatever was easiest—practices like buying renewable energy and improving energy efficiency. But low-hanging fruit can only get them so far. Actually cutting their emissions enough to meet those commitments often means hard work, defining new business models and products rather than just tweaking the old ones. Meanwhile, interest rates have risen and supply chain hiccups remain from the pandemic as companies look for the same products that will facilitate the low-carbon transition. (Think of manufacturers vying for the limited quantity of low-carbon steel). On the ground in New York, executives talked up their commitments while also expressing a sense that the current political and economic situation had slowed progress.
The political climate is similarly tricky. Some heads of government came to New York to highlight new commitments. Others talked about pairing ambition with realism. (Pragmatism was a key word used by the official from the United Arab Emirates charged with leading this year’s U.N. climate conference). And others still declined to show up at all, in part because they were distracted by other challenges and in part in response to the reality that climate policies are already being weaponized. (British Prime Minister Rishi Sunak didn’t show up, instead announcing this week that the country should slow its climate efforts).
In a way, hiccups are the inevitable result of progress. And political and business leaders will need to work through to keep up momentum. That’s something that no conference or summit can solve.
