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2020: Good News for the Planet

A summary of the most important and positive news about climate change this year.

As we all know, there's been a radical collapse in carbon emissions this year but for all the wrong reasons. However, behind our self-imposed lockdown - and the resulting closure of factories and the curtailment of travel - the world seems to have genuinely turned 'the climate corner.'

Many of the world’s most powerful institutions have adjusted how they think about climate change. Climatic upheaval and the energy transition, both of which had long figured distantly in leaders’ planning, became a near-term economic issue. So 2020, could now perhaps be described as 'the year that the climate became the economy.'

China: This is the really huge one! President Xi Jinping announced that China would start reducing its carbon pollution by 2030 - and achieve net zero by 2060. His promise, which came in two sentences in his speech at the United Nations General Assembly meeting in September, was a total surprise.

China is the world’s largest emitter of greenhouse gases (30 percent of global carbon pollution) and Xi Jingping's pledge therefore signifies the future elimination of a colossal amount of CO2. However, the knock-on effect may be of equal significance. If Xi can figure out how to peak China’s carbon pollution while the country still grows economically, then China could fashion a new kind of development model for other countries to follow. Such a model wouldn’t just reduce existing emissions from China, but also prevent future emissions from other countries - because they would be able to follow China’s lower-carbon path.

European Union: Earlier this month, European Union leaders agreed to strengthen the Continent’s climate goals and pledged a new target of 55 percent greenhouse gas reduction by 2030. The old goal was a 40 percent cut by that year.

This new goal is big enough to matter: The EU is the world’s third biggest carbon polluter, responsible for about 8 percent of emissions, and the deal shows how political stability drives climate diplomacy. The Continent will be able to do far more on climate change working together, and issuing debt together, than separately. And maybe most important, it shows how China’s pledge is driving other countries to make even bigger cuts. It feels like there's going to be international competition to see who cuts the most, the fastest.

The pandemic and its lessons: The pandemic has had a direct influence on climate change with emissions projected to drop this year by about 7 percent. Whilst that's great news, it didn't come about through a pre-planned global strategy. Of course, the economy will soon come roaring back - and emissions with it - but what’s likely to endure are the lessons of the pandemic. For example, we learned that focused government funding and attention can accelerate the deployment of life-changing technology - witness our ability to develop safe and effective vaccines within a year of the virus’s discovery (a process that normally takes 10 years). A similar approach could work if applied to clean energy and other climate tech, too.

As we've all discovered the joys of breathing clean air, the pandemic also seems to have lead to a seismic shift in the general public's view of the urgency of greening our way of life; and will help drive governments and large corporations to focus on and invest in renewable, sustainable energy solutions.

The markets: This was the year that global markets really seemed to notice that solar and wind energy were becoming price-competitive with fossil fuels. Across the world, but especially in the United States, we saw a concerted move toward recognizing the potential of zero-carbon energy. Indeed, this, renewables surpassed coal in US energy generation for first time in 130 years.

In October, the International Energy Agency pronounced solar “the cheapest electricity in history.” NextEra Energy, a Florida firm that sells wind and solar electricity to utilities, became one of the country’s most valuable energy companies, its value rivaling that of Exxon and Chevron. More and more venture capital is going to climate-tech start-ups, according to the accounting giant PwC. And funds tracking the solar and wind industry consistently outperformed the S&P 500.

This year, too, asset managers woke up to the risks of climate impacts, especially sea-level rise and wildfires. Furthermore, financiers seemed to decide en masse, too, that oil and gas stocks posed too much risk to the rest of their portfolio. Regulators also woke up to these changes. The Commodity Futures Trading Commission, which oversees financial derivatives, warned that climate change could damage the U.S. economy. The Federal Reserve became the last major central bank worldwide to join the Network for Greening the Financial System, a coalition that looks at systemic financial risk from climate change.

All this market movement doesn’t supplant the need for policy. Some of these changes are happening because investors expect policy to arrive, not because it’s already here. But taken together, the good news is that it shows that the world’s most powerful financial institutions believe that the future is decarbonized - and that, far from hurting the economy, climate action is likely to help it.

Hydrofluorocarbons: Clearly, it's wonderful news that Trump - the famous climate denier - is being replaced by Biden (who believes that climate change the “number one issue facing humanity") but the really big story from America is that a bipartisan climate bill has just been approved by Congress. Its most important emissions-cutting measure is that it commits the U.S. to eliminating a type of chemical called hydrofluorocarbons, or HFCs. Normally used in refrigerators and air conditioners (the UK banned products that emit HFCs in 2007), HFCs can escape into the atmosphere and trap heat thousands of times more effectively than carbon dioxide.

Because HFCs are so potent, phasing them out has truly significant climate benefits. This bill will avert the equivalent of more CO2 emissions than Germany emits in a year. It may be “the single most effective emission reduction measure taken by Congress in over a decade,” according to the Rhodium Group, an energy-analysis firm.

When joined with other action to phase out HFCs worldwide, it could avert one-fifth to half a degree Celsius of warming by 2100. Consider even that a low-ball estimate. Under the Paris Agreement, the world committed to averting 2 degrees Celsius of warming by the end of the century. A global phaseout of HFCs gets us 10 percent of the way there. That’s actual progress - and some truly good news to end an awful year.

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