Nov. 17, 2021

Ep64: Guy Turner 'Good COP, bad COP?'

Guy Turner is the founder and CEO of Trove Research and an expert on carbon markets.

Guy has 30 years’ experience in research and strategy in sustainability and the energy transition. He spent his first 15 years in consulting advising companies and governments on a wide range of sustainability issues. In 2006 he joined New Energy Finance (NEF) to create the carbon market research business (New Carbon Finance) which was integrated into NEF. After the sale to Bloomberg, Guy continued as Head of Commodities and Chief Economist of BNEF, building out power and gas market analysis and renewables economics.

In 2017 Guy joined BP Economics where he was responsible for global oil supply analysis and worked on BP’s Energy Outlook. From 2018 to 2020 Guy was the Strategy and Analysis Manager at EDF Renewables, overseeing market and financial analysis to support investments in offshore and onshore wind, solar, battery storage and hydrogen.

Guy has undergraduate degrees in Mechanical Engineering and Economics, a Masters in Environmental Technology and is a graduate of London Business School Corporate Finance Evening Programme.


Further reading:

 

Trove Intelligence

https://trove-intelligence.com/

Trove Research

https://trove-research.com/

Transcript

Michael Liebreich: Before we start, if you're enjoying these conversations, please make sure that you like or subscribe to Cleaning Up, it really helps other people to find us. Cleaning Up is brought to you by the Liebreich Foundation and the Gilardini Foundation. Hello, I'm Michael Liebreich, and this is Cleaning Up. It's a special issue of Cleaning Up just a few days after the end of COP 26 in Glasgow, and my guest today is one of the great experts on pathways to net zero and on the global carbon markets. He's also a great friend, Guy Turner joined me at New Energy Finance, he was head of carbon. He then became chief economist for New Energy Finance, and ultimately for Bloomberg NEF. Please welcome to Cleaning Up, Guy Turner. So, Guy, welcome to Cleaning Up.

Click here for Edited Highlights

Guy Turner: Hi, Michael, it's great to see you again. And it's great to be back home after a rather hectic two weeks at COP.

 

ML: So you spent all two weeks up in Glasgow?

 

GT: I managed to survive 10 days and then I had to make my exit?

 

ML: Oh, my goodness, that's known as taking one for the team. Now that puts you in a fantastic position to tell us what happened at COP.

 

GT: Well, there was there was a lot of bluff a lot of bluster and a lot of attention on it. There's been a lot of reports in the media, I am perhaps a little more sanguine about the outcome, because I think it's the we didn't get the in a single declaration around a firm pathway to one and a half degrees C that a lot of people wanted. But I think what we did have was a set of sub agreements and sub commitments, that that act as stepping stones, and at least keep the process moving forwards and keep us engaged. And you know, I can give you my quick sort of eight point takeaway, if that would be helpful.

 

ML: Just before you do that. Could you put in perspective, sort of the big picture? You know, where are we headed? How many degrees? What did the pledges do? What do the NDCs the nationally determined contributions? The kind of more concrete plans do? And does that include all of these agreements? We have stuff on methane and on forests and on coal, and also it's very confused. So you know, what did COP do in terms of did it actually bend the curve downwards? Where are we headed?

 

GT: The process not just COP, but the updated national determined contributions leading up to COP that have been put in place for the last year, collectively have moved the needle, the projected global warming increase from pre industrial levels was on track to be about three degrees prior to COP, and the analysis is that that's now come down to 2.4 degrees, which is an improvement, it's still not nowhere near the one and a half degrees that the scientists say we need to avert dangerous climate change. But it has moved the needle and it's moving forwards.

 

ML: Okay, now, our audience is very mixed. Some of them are so wonky. They come from Wonkkville, but some of them won't know what a nationally determined contribution is. And they may not know the difference between that and these net zero pledges that people have been throwing around. Can you explain that?

 

GT: The nationally determined contributions are the commitments that governments make under the under the UN framework with a 2030 target year, they say what they're going to reduce, which parts of the economy are going to be covered and the percentage reductions, the net zero commitments you see a governmental level and a corporate level are separate from that they are in they are national, they're again nationally determined, but they can be more far reaching. And the term net has become incredibly important. This has sort of only started to come out in the last two years. And that that changes the dynamic.

 

ML: Let's come back to this question of net because that's attracting more and more attention and anger in social media posts. But I think that's really important that there's this process from sort of generic ambition to pledging net zero to the nationally determined contribution which is a quasi-legal document and it's not really legal because it's voluntary, but it's being used in courts. For instance, in Holland, it's being used. And that's the one that really people focus on. That's the 2.4, down from three degrees, but then it goes into national legislation. And then it goes into the business community doing stuff, which the finance community finances, and hopefully, that means that emissions drop, and then we can measure it. So there's this great big long bucket chain isn't there and COP is really only playing in the sort of, in a couple of those stages. Right?

 

GT: They are important documents. And I think that's why governments have been very careful in redrafting them after the Paris Agreement in 2015. This is the five year update when governments have to come back and they're supposed to engage in this ratchet of tightening the commitments, and a number countries have been a bit slow to redraft and not push them push that ratchet down as fast as people would like. But I think they've been very thoughtful and careful about them because of the significance they hold.

 

ML: So and we had on the programme, we had Laurence Tubiana, we've had lots of the Paris Agreement sort of architects, but Laurence Tubiana in particular talking about the ratchet mechanisms every five years coming back and tightening up. So Glasgow was really the first test of that ratchet mechanism. And certainly in my world, and I suspect in yours, you would see that as a huge success. I mean, we went from nationally determined contributions that were really almost didn't constrain carbon at all, to bringing it down to 2.4 degrees. But what's the role then of the net zero pledges, I mean, the 2.4, there's also this figure of 1.8 degrees, that's knocking around what does that relate to?

 

GT: Well, I think that's the that's the halfway point plus a plus or minus a decimal point between one and a half and two degrees.

 

ML: And I know it's related, it was supposed to be the net zero pledges turned into a temperatures, if so, you have these countries, like India, for example, or China, that 2016. Net Zero is not even in the NDC that they've currently got lodged with the UN. So if you add up all of the pledges, my understanding is that they would come to 1.8 or 1.9 degrees, much better than the 2.4. And part of the frustration is that the countries have been pledging, but they're not producing these quasi legal documents, you know, on demand, and they now have to go away and do that, don't they?

 

GT: They do. And, and that, you know that going back to that word net, links through to a major part of the COP 26 Glasgow negotiations, which is around Article Six, Article Six, and that, you know, that is what drives though, that's the difference in the 2.4 and the 1.8. That it allows countries to act cooperatively and finance emission reductions elsewhere, and contribute to their own, you know, to their own targets. But that's a it's a fraught process. But we did get agreement on that. And I think that was a big a big step forward.

 

ML: Okay, so let's, let's talk about net. Why is net? Why is net zero, such a controversial concept, I mean, seems pretty obvious. And we've got industries like cement, where the actual process of making cement which we're not doing for recreational reasons, because we like going on holidays, it's because you know, people in the largely developing world would like to have roads and buildings and not sleeping, you know, houses with dirt floors, and but when you produce cement, you produce emissions. And so then you can plant some trees, and then you have net zero. And that feels kind of okay to me, why is it such a controversial concept?

 

GT: I think it comes down to the sort of get out of jail free concept where companies the most important thing for the planet is to reduce our, our release of greenhouse gas emissions in particularly CO2. And we need to, we need to engage in that as soon as possible. And there's a feeling that by offsetting and claiming victory on a net basis, you're still putting emissions into the atmosphere, and you're not changing the business structure. You're not changing the technology, you're still locked in to the old fossil fuel consumption. And it's that change of technology, that paradigm shift in how we you go about our lives, what energy systems we use, that is absolutely required. So I think there's a fear that it perpetuates that that lock in of existing fossil fuel reliance,

 

ML: Right, but as long as it's net zero what does it what does it matter if we are emitting some CO2? If we're then capturing it, whether it's via a tree or any other way? Why is that a problem?

 

GT: Well, I think the molecule of CO2 or methane in the atmosphere would agree with you, you know, it either gets omitted or it gets sucked out. So, if it's if it if the two are equivalent, then I agree with you it is it should be like for like, and we should end up in the same net position. It's just that trajectory, I think that people are concerned about, and that a lot of, you know, the answer is not one or the other. But both, you know, we need to reduce that that fossil fuel consumption, we need to radically shift the technologies and how we use how we live our lives, at the same time, reducing the, you know, sucking CO2 out of the atmosphere, largely through forests, other technologies, and at the same time improving the health of the planet, the biodiversity as well.

 

ML: Right. So I think that, to my mind, the reason people are so exercised about net is the legitimate concern that if you, if you think there's a get out of free card, then you might not try as hard to mitigate  your emissions. There was Margaret Thatcher who said, never have a plan B, because if you do, you might be you might be persuaded to use it. So it's better if we don't have net if we don't allow that. So my sense, though, is that the much bigger reason is you have all these oil and gas companies who are promising net zero, and they're clearly can only do that and remain in their core business by using offsets. So the net plays a huge role in the oil and gas industry, does it not?

 

GT: It does, and it plays a huge role in other industries as well. Aviation, you know, there are pretty few opportunities for airlines to reduce CO2 emissions from flying, we have aviation biofuels, but you know that they're not, they're not cost effective, yet. They're not. They're not produced at scale. So if we get on a plane, there's no avoiding currently, the release of greenhouse gas emissions. So that's a pretty obvious example about how we can use offsetting in the net process to recapture that CO2, and try and create some kind of neutral position.

 

ML:Right. So Article Six, and then we'll get back to the other things that were decided how does Article Six solve some of the complexities or some or how does it allow you to move forwards on this question.

 

GT:It allows governments to achieve their the objective they've set in their their NDCs. Their nationally determined contributions, their targets, by help by financing emission reductions in other countries where it's easier to do that. It's the basic tenet of emissions trading you allocate money around the world, to the place where it's most cost effective to do it. And a country in a country. A good case study would be South Korea, South Korea was heavily industrialised an advanced economy, very reliant on coal and fossil fuels. And its natural, its renewable resources are some a limited compared to say, Northern Europe with modest wind resource and limited land area for solar, how can it decarbonize and maintain a standard of living that people want? It's very difficult, it has a 40% reduction by 2030 target. And you know, that countries like that are going to have to look to financing emission reductions elsewhere in the world that they can link like credit they claim to, and the Article Six framework gave some solidity to those that that transaction process. And, and also not in it does it in two ways. One is country to country or government to government. The other is at a project level, where an in private company, a private developer, can do something that reduces emissions, forestry, potentially, or other technologies, and then sell that credit to a government or an airline, maybe under the international airline scheme, who can then use it against their compliance obligation, their NDC. The interesting thing about Article Six was if that transaction happens, the country in which the project takes place has to adjust their emissions upwards, because they get the benefit as well. And so there's no double counting. So that was a that that that clarity needed to come through. And, you know, that was that was a that was a big success in in Glasgow.

 

ML: Okay, but what sort of credits will qualify, so, will you be able to get credits by for instance, building a CCGT gas plant instead of a coal plant, because I mean, that that's better, right gas emits less than coal. So can, I don't know, Hyundai or the South Korean government, pay someone in Africa to build a gas plant instead of a coal plant, and then say, there we go, we've pretty much saved the planet.

 

GT: It's unlikely those technologies are going to be allowed through this time, they were quite a few of those were allowed through under the old clean development mechanism created under the Kyoto Protocol, it's unlikely that those are going to be allowed through because they're revising the methodologies that approved those kinds of technologies so that they're narrowing the field of technologies all the time, that can lay claim to those credits. So in the voluntary carbon market, for example, which sort of runs parallel to the UN process, they have now banned any carbon credits from renewable energy projects in anything other than the least developed countries. So anything that's in a developed country or developing country like India, or China, Indonesia, would not be eligible to generate carbon credits, because they're deemed to be viable anyway. And then the costs have come down so much, they don't need the carbon finance to go ahead.

 

ML: This is great. So we can see, you know, I can see that, you know, your knowledge of carbon markets has not faded or grown old. But also see how this is really kind of Through the Looking Glass stuff, right? Because that means that a renewable energy project in a lesser developing country can be used to allow a South Korean company to continue refining oil, selling oil, doing whatever it wants to do. And yet the sum total of refining and selling oil in South Korea and building a wind farm in Burkina Faso is not it's not even net zero, even if you call it net zero, it's far from it. Right?

 

GT: Well, it could be, it could be because currently, you know, the, in Burkina Faso, Somalia, or the other least developed countries, a lot of them in Africa, they aren't growing, they've got grown populations, they've got growing needs for energy. Currently, a lot of that energy is provided by oil. And, you know, unless things change, unless new means of providing power and energy are introduced, they will use more oil. And anything that changes that trajectory of oil use or fossil fuel use more generally, is going to be good, it's going to be the right thing for the planet. So in those countries, where it's very difficult, there are there are real barriers to doing renewable energy projects. You know, I think there's a credit should generally be able to be created. And if a country like Korea can or elsewhere can, can finance it, then I think, you know, that that's what the mechanism is designed to achieve.

 

ML: Right? Well, yes and no, I mean, if the mechanism is designed to get us truly to net zero number of new carbon and methane molecules in the atmosphere, that's not what it achieves. But we ought to, we ought to switch back to some of the other findings, because otherwise, we will end up spending another 10 minutes, but at the end of which you're persuade me that the Article Six is no more viable, than the CDM and CR mechanisms under the Kyoto which would be a very bad outcome, because right now, I'm feeling quite optimistic.

 

GT: Let's bank that and move forwards.

 

ML: Yeah, exactly, exactly. And it is very important to provide, you know, we may, we have to go quite far down into the weeds to find an example, which was negative, I think the Article Six finally, completing the Paris rulebook, enabling quite a lot of good stuff to happen will certainly be helpful. And if you agree with that, let's go back to the you had a whole bunch of other sort of takeaways from Glasgow, so what are the other main ones?

 

GT: So I would categorise them into two sorts. One is sort of like the high level generalised commitments that a lot of countries signed up to in the, in the Glasgow climate pact. And then there are the sub agreements are sort of the sort of sector specific agreements which which sort of have been negotiated in parallel. So at the high level, I think some of the some of the good things was we still have the one and a half degree target referred to quite a lot in the pact. Although we're not on target for that it's it's helpful that it was maintained and provides a beacon that that and a reference point that we can welcome refer back to the NDCs is the nationally determined contributions, there was a call for those to be revised this ratchet not every five years but every year and that is I think, if we can achieve that that will be a major step forwards. Five years is too long a time to wait now and I think you know, we have to keep this as a as a the pedal to the metal on this. And, and really, test companies, countries convictions and their comitments on a much more frequent basis.

 

ML:Is that known as the McKinsey clause?

 

GT: You'd have to explain that one to me.

 

ML: Well, it would be enormously good for anybody, any consultancy, working around net zero carbon planning, helping countries, etc, etc. Fabulous, you get five times the revenues if you have to do it every year instead of every five.

 

GT: Oh, you might call it the Trove Liebreich clause. I don't know.

 

ML: I'm not in that business. You may be, let's go, carry on.

 

GT: The US and China made a statement that they would agree to cooperate in spite of all the differences. And this is just words, I would, I would admit that, but you know, they have agreed to boost climate cooperation over the next decade and put aside their other differences. And, you know, we talk about that the UN with 200 countries involved, we talked about the G 20, the G7. Really, we probably just need the G3 US, Europe and China, and maybe G4, India, and will cover an awful lot of the world's emissions.

 

ML: It’s fascinating, because there was apparently a key meeting with the G4, where France Timmermans, John Kerry, and then the two representatives from China and India, actually, right at the end, replaced the wording phase out with phase down. That was apparently the G4’s work. And then of course, there was the G2, which was the US and China, you know, really unblocking the drains as they did before Paris by coming up with their bilateral, but there is no G3, right? There's nothing. Where was the EU in all of this? I mean, they were almost they were almost invisible for two weeks, were they not?

 

GT: I'm not sure where the EU are. But there's a sort of an interesting, perverse outcome of the EU successful climate policies. and the EU, the more successful it is the less of the world's greenhouse gas it represents. So I think it's now 11%, something like it represents 11% of the world's greenhouse gas emissions, I forget the exact details. But the more successful it becomes, the less influence it has in that in that negotiation, which is a perverse outcome.

 

ML: Well, I don't think you're suggesting that they should sort of pollute more in order to have a bigger seat round. There is also another thing going on, I think, which is that if you walk into a negotiation, with your position already determined, you put that on the table, day one, or even in fact, before day one, in the case of the COPs, and everybody knows you can't reopen it, because it would involve 27 countries having to renegotiate everything now, I suppose it's not surprising, you don't play a big role in the horse trading, because everybody knows exactly what you've brought to the party.

 

GT: But I think I think the EU plays a different role. And I have a huge admiration for what the EU has done over the last 20 years. It has gone faster and harder than any other country or group of countries

 

ML: Except the UK.

 

GT: We did benefit from a lot of North Sea gas. But in terms of radically restructuring…

 

ML: I can’t  let that go the last 10 years, the UK is decarbonize far faster than the EU. And we have to acknowledge that I mean, that was one of the reasons why we got the right to hold COP and why it's been successful. But continue.

 

GT: That conversation can unravel. If you look at the imported carbon for that we now import, you know, the imported carbon in our goods and food products.

 

ML: Wrong, you can't do that. I know the data. Peak of consumption-based emissions for the UK was in 2013, same as it was for production based emissions. This is this is the rogue's gallery of reasons to pump up the EU and denigrate the UK. I know all of the rhetoric.

 

GT: We import 80% of our food of our food consumed in the UK, if you trace it back to its source, and that has its own footprint. I'm not sure if those figures we could up we could debate that separately. But I just going back the EU's commitment to climate change and as a leader that other parts of the world can refer to and look up to I think has, you know deserved a huge amount of credit. Anyway, going back to Glasgow, we have the US China the G2 cooperation, I think which hopefully will be significant. The financing pledge of $100 billion a year. It's very disappointing that hasn't materialised. But there was a reaffirmation of the commitment to try and achieve that by 2025. So these are sort of like the four high level takeaways that I that I, that I would sort of refer to at the at the sort of like the thematic level.

 

ML: Let me just before we move on, on that finance, that's news to me that it was 2025. I thought that John Kerry stood up and said the 100 billion will be there in 2022 because we got to 79.6 billion in 2019. And this is a flow of funding from north to south. It's called the Copenhagen commitment because it was actually Hillary Clinton, that first put it on the table in Copenhagen at the famous failed COP 15 it was the only thing substantial, it really came out of that one, as far as I'm aware. And it got up to 79.6 billion by 2019, which is, I mean, I'm going to sort of do air quotes. For those who are listening on a podcast, you're only 20 billion short, which by the term you divide it by 100 developing countries is actually I hate to say it, but not that vast of a sum, and compared to the 700 billion every year invested in electrification and clean energy, and the trillions that need to flow. And then of course, the pandemic happened, and so we didn't get to the 100. But I thought that John Kerry and others, the UK had asked for this plan from I think, Germany, and I'm not sure who else that had said, we can do it by 2023. And then the US said, No, we can do it by 2022. But is that not in the text?

 

GT:I thought it was 2025. That was that was the information I have I'd have to check that probably.

 

ML: We can put that into the show notes. Because they what you know, that one, I think, well, you know, getting those two years late in terms of pandemic to this, you know, seems you know, I know, everybody's get very excited about it. But it seems to me like a relatively minor issue. You know,

 

GT:I could check while we're on live, but let's move on. Let's move on. Let's move on. So those are the high level ones. And the sort of like the four sort of thematic areas that I sort of classify select sub agreements, or the other one on coal yes, disappointing that it wasn't phased out. But we had 40 countries agreed to accelerate efforts to phase down unabated coal. So that's, you know, without any, any kind of emissions capture technology on the back and phase out inefficient. fossil fuel subsidies. Now, I don't quite know how they've defined inefficient. But you know, once they've made those declarations, the world's eyes will be watching them. And there should be some measurement of that better measurement better reporting, so that we can actually judge. Judge how they get on.

 

ML: The phasing out of inefficient fossil fuel subsidies is actually something that was there was a commitment made at the G 20. I'm going to say in about 2016 or 2017. I think maybe even before maybe even 2014. And I was struck by this word inefficient. Because, you know, does inefficient mean that there's the because it's an inefficient fossil fuel subsidy or the inefficient fossil fuels subsidy. And of course, all fossil fuels are inefficient, because they all produce thermal waste. So, I guess, if I were a lawyer, I would argue that means all fossil fuel subsidies, but I don't think that's the intention.

 

GT: Yeah, I'm not sure how that how that word is going to be defined in that context. And it's a bit annoying that it actually appears, because clearly, it was put in there for a reason.

 

ML: It was put in there in the G20 context, it was put in very much at the behest of Saudi Arabia, who had been extremely against the, I think what happens is a lot of countries, most fossil fuel subsidies, you know, better than anybody, are not in Northern Europe or the US, they're actually in quite poor, but fossil fuel rich countries that then provide very cheap sub-global market fossil fuels to their people. And they don't want to sign up to anything that says they have to impose a dramatic and fast increase in cost of living on their entire population. So it's sort of it's a complicated issue.

 

GT: In these countries Saudi Arabia and other sort of North African Middle Eastern countries is pretty prevalent. It's a form of social security payments, it's a way of, of bringing income or reducing the cost of living to lower income households. And until they've got until those countries have most developed social security systems, then it's an easy way of achieving and so

 

ML: Although, of course, the IEA did some fabulous research a few years ago that showed that only 7% of the subsidy goes to the very poor, and the rest of it actually goes to the middle classes and of course, it's kind of social security for oligarchs is what it actually turns into.

 

GT: That's potentially very true as well. Yeah. The other one on the on the sub on the sub sort of agreements was the global methane pledge, unfortunately, did not include China, but did include US, EU and Canada, to cut emissions of methane by 30% by 2030. And I think that that, you know, that was So that was good that it was tabled. But you know, there's a good part of me that says 30% reduction by 2030. On methane? Come on, come on, you could do an awful lot better than that. I mean, it's it's an identifiable gas, you know where it leaks from, particularly from oil and gas, you can attack this gas much harder and faster than they have done on the 30%.

 

ML: I could not agree more. And it's an incredibly important topic. So it's really good to see it getting so much attention. Now the IEA I think, this morning or yesterday, published, it sort of first take on COP and looked at the methane pledge. And that 30% reduction in methane, fugitive methane emissions, it's such a powerful greenhouse gas, that that 30% reduction is equivalent to electrifying something like all passenger cars and trucks, you know, and like trucks in the world, it's an absolutely colossal impact. But 30% in eight years, it's like 3%- 4% a year of this, this is such a trivially easy thing to do if we got our act together. I've been saying it should be 70% reduction by 2030. And 30% reduction shouldn't take us more than three or four years. 2025. What's the problem? Are we serious or are we not serious?

 

GT: I totally agree. I totally I just don't understand why it's not being done. It's a point source. Right? It's not diffused. It's a point source. You know where it's coming from, you can measure it. You've got satellites, now running around the world running around in space, pointing exactly where methane is coming from me then accounts for 30% of global warming today. It's an incredibly important gas. And it's an easy one to attack easier than the use of fossil fuels.

 

ML: A couple of years ago, I was in I was in Canada is actually in Alberta. But to my amazement, I found that in Saskatchewan, and I'm sure in other provinces in Canada, you're allowed to vent not flare vent methane, natural gas when you're so if you're if you're extracting oil, you got a little nodding donkeys or whatever it is, you're extracting oil and you get the gas that's, you just you can just vent it. Now, I'm sure since then I'm sure that it's become, you know, more heavily regulated. But most of that regulation requires on self-reporting. And of course, what we've got now is these new satellites, and it's very easy to find where this stuff's coming from, isn't it?

 

GT: Yeah, yeah. Yeah. Yeah, I totally agree. The other the other sub clause. Shifting from fossil fuels to nature is the pledge on deforestation. 100 countries, including Brazil, pledged to end deforestation by 2030. Great, I think this is a really, really important initiative. It was slightly odd that the the Indonesian President made the declaration then two days later, his minister of forestry and agriculture said no, we didn't. The interpretation, the difference in interpretation was that they had committed to no net deforestation, which is different from an ending of deforestation. I allowing you to deforest virgin forests, but compensate that with growth of new forest. However, that plays out, I think, a pledge and monitoring now of countries commitments against that now we have far better satellite imagery going on. And I don't I don't have any, I don't give any credibility to the argument that that countries are defensive about what you know how satellites could be used to monitor these natural assets. That's exactly what the satellite should be used for. The counting, we should not leave it up to national governments to account for this. If there's any risk that they may underreport.

 

ML: So, can I ask an honest, stupid question? Why does it take to 2030 to stop deforestation? Why do these food companies pledge that they'll have a deforestation free supply chain by 2030? I mean, if this was the number one most important thing that the CEO was judged by, I'm not saying it should be but if it was, do you think it would still take until 2030 to achieve that?

 

GT: From a corporate point of view, I think they can move quicker. I was looking I was looking recently at a state in Malaysia and 1/3 of the population live in the urban environment, two thirds are dispersed throughout the the countryside, they that in small villages, a lot of them have their livelihood, their livelihoods are dependent on on, you know, the forest not sustainably but unsustainably and have done for generations. And you've got two thirds of the population whose jobs and livelihoods are inextricably linked with that logging and, and sort of conversion of forests to agriculture. So yes, technically we can do it but how do you provide the income and jobs for the people in those environments? I mean, there has to be a new economic plan for some of these countries to be able to suddenly switch it off. So I think you know it politically, those are the kinds of questions which they're going to have to solve to be able to turn off that deforestation process.

 

ML: Let's link that back to the conversation about Article Six. Because of course, we talk about logging and slash and burn agriculture, and then reforestation, right, the reforestation would qualify for carbon credits, right? Because that's carbon capture. That's, that's, that's the good stuff. But what does Article Six provide a commensurate flow of cash into preventing the logging? Because if not, you can understand exactly where Indonesia is coming from, which is gonna be more profitable to cut the thing down, sell the wood, and then get more money to try to regrow it.

 

GT: Yeah, and you could say, you could, you could argue that Bolsonaro has done exactly that in Brazil, you know, having allowed the deforestation, rate of deforestation to increase, and now wanting to get further money to regrow the forest and prevent that the way to deal with that is just to challenge the deforestation baselines that are going to be used in creating those that the carbon credits for re for reforesting. But you know, it is it is it is what it is, we are where we are, we have to try and reset the trajectory of that deforestation trend. And then use that as the baseline for saying this is what countries are committing to, and we will finance anything over and above that, from a from a preservation or restoration point of view.

 

ML: Well, shouldn't it be very, very simple, that you stopped cutting down the old stuff, and you'll get access to the money to reforest?

 

GT: Yeah, I think it's not stopped completely, it's the rate. So I don't think you can say the deforestation rate is currently there, and suddenly it stops. I think there has to be a glide path down. So it's really about what's the shape of that glide path of deforestation rate is down to zero. And we just have to calculate that more precisely than we have done in the past.

 

ML: It feels like it feels like too gradual of a process, we've talked about methane where you and I agree that we think we should be able to do it much more quickly. And it feels like this one, I'm not sure we are agreeing. But I think it could be done much more aggressively and needs to be done much more aggressively. But then I'm not a forest. I'm not a I'm not a forestry expert. But I, I am concerned that it's a bit like, you know, trying to phase out slavery over a 30 year period or for you know, at some point, you just have to say stop cutting the damn trees down.

 

GT: Yes, in simple terms, I think is one of the you know, I think that the two major challenges are the, as I said, you know, in particularly in Asia, you know, the number the amount of livelihoods that are dependent on it. And secondly, and politically, you know, secondly, practically, how do you do it, there's an awful lot of illegal logging. And these countries are vast.

 

ML: So I don't want anybody to I don't want our audience to sort of start, you know, tweeting and writing in and putting comments about how I don't understand that these people have a livelihood? How are they going to feed? There's no, absolutely we all need to provide funding and packages and skill building, capacity building, et cetera, et cetera. So I think even I'm not saying stop, you know, stop dead tomorrow. I even I would accept that. It's not not, that's not realistic. Okay, so any of the other sectoral things because there was something around steel, which happened before COP between the US and the EU?

 

GT: I didn't I didn't pick that up on my list. To be honest. If that was, that was pre-COP then yeah.

 

ML: I met with some of the US State Department folk who were very excited about the fact that they had taken what was essentially a Trump era steel tariff, and said, instead of getting rid of it, because it's stupid, we'll keep it but only if the steel produces more CO2 than x. And that was an there was therefore an agreement to remove the tariffs, but only on cleaner steel, which struck me as being quite elegant, although I was not across the detail, but even you're not. You're not familiar with that one.

 

GT: No. And, you know, let's given we are on time, let's let's not engage in carbon border adjustment banter now because that could take up another hour. And I know it's a it's a topic close to your heart as well.

 

ML: Yeah, so it is one of the things that was not in the COP package. I think that some you expected it to be a big topic at Glasgow. I think that there was a concerted effort myself and others to say the world is absolutely not ready to have a conversation about carbon border adjustments, given that it's going to be so contentious between different developed countries, but also between developed and developing countries. So that seems to impart, by the way up at the Climate Action Solution Centre that I was running at the Blair estate outside Glasgow, we did have some very robust discussions about carbon border adjustments. And I think they will be back, whether it's COP 27, 28, or something, we're going to have to deal with them, there's going to have to be some kind of a position on them from within the UNFCCC process, I think

 

GT: I was in I was in the room there. And I was I was, I was amazed at the amount of brain time and the quality of brains that have been applied to this problem. And I was encouraged by that I was also slightly disappointed that they're still going around, there's still doesn't seem to be any clear pathway forwards on it.

 

ML: Right. So now if we summarising back to COP 26, what happened, we've strayed a little bit off the document, but that's okay, because COP is always the negotiation. It's the side events like the climate Action Solution Centre at the Blair estate, and then it's also all of the kind of civic society and the protesters. So now, the protesters, I mean, Greta Thunberg, the most vocal critic of the whole thing, she declared failure before the end of the first week, and that's now being mirrored by a lot of the sort of climate activist community, they just say, this is more blah, blah, blah, it's a failure. It's a sellout, et cetera, et cetera. So how do you respond to them?

 

GT: I think, I think Greta, as a metaphor for all of the NGO, and pressure groups do an incredibly important job. I think without them, it would be even the compulsion to act wouldn't be even on the same level as we have at the moment. They are the organisations that are holding countries to account and pointing the finger and saying, You're not going hard enough, you're not going fast enough, you committed to that you haven't achieved that. If it was just left up to governments to negotiate, I don't think they would have that sense of external pressure. So I have a huge amount of sympathy for them and a huge amount of respect for everything they do. They're the ones that are going to push this forwards. So yeah, we should we, the world should be trying to reduce emissions quicker and, and ratchet up the commitments. We're just in the real world. And we're trying, I think, you know, they're trying to governments are trying to negotiate a very, very tricky landscape, I would encourage the NGOs to keep the pressure on.

 

ML: Right. But if you go back to that bucket chain, you've got pledge to NDC, to domestic policy to action, etc. And we are now getting the pledges. And, you know, it just feels very kind of nonsurgical, just to say, oh rubbish. Instead of saying, Okay, we like your pledges, your pledges get to 1.8 degrees, you need to pledge more, because we need to get to 1.5. But that's not the main problem. The main problem is we want to see your NDCs. And then we want to see your domestic policy or domestic legislation, which, you know, in the UK, you know, is one of the only countries that has got that process really nicely laid out. That is how it has to work. And it just feels to me like just saying it's all rubbish, when instead of actually focusing on the real gaps, it feels, it risks becoming a kind of a, you know, a piece of theatre, rather than really holding people to account in a meaningful way.

 

GT: I would, I would encourage the global NGO community to spend time and effort getting the countries to deliver on their current commitments really hold them to account on that 2.4 degrees See, rather than beating them over their head saying you haven't gone You're not on a one and a half degree, if you've made a commitment, you bloody well better achieve, the should monitor and hold them to account.

 

ML: Right and I would do two parts I would say hold the account to the 2.4 Absolutely. But also get the 1.8 Get the net zero pledges the which truly are blah, blah, turned into the next set of NDCs which is what you know, has to happen. You say it should start happening every year. But it feels to me like yes, there's there's holding to account on the on the NDC. But there's this other bit the bigger gap is actually moving from the net zero pledges to the NDCs is it not?

 

GT: Yeah, all of that all of the all of the above And as I said, they are incredibly important. So if they, you know, they shout, they scream, they protest. And, you know, it seems like a trivial distraction to the really hard graft of hard negotiating. But I think it's incredibly important. I think it really is they do they do reflect a lot of what people are feeling and thinking. So I would encourage them to I'm not I'm not saying engage in civil disobedience, but, you know, keep keep the vocal pressure on definitely.

 

ML: And I agree completely with the role that they've played. There's no question that without, you know, Greta and Extinction Rebellion and Friday's for Future…. And by the way, by the way, you know, 20, or 30 or 40 years more of that stuff that preceded it. There's no question we will not be, you know, that that Glasgow COP agreement would look nothing like what it does, it would have been much lack. So there's no question if it would have existed at all, I guess the question is whether they should be saying, you know, 2.4 degrees, half, we'll ignore it completely, because it's all rubbish. Or as you say, we're going to hold you to account. And as I say, we're also going to, you know, we're going to hold your feet to the fire, so that you move from 2.4 to 1.8, and then ultimately to 1.5. If that is still physically feasible.

 

GT: Yeah. Yeah, I agree on that. On that note…

 

ML: And then we come back to this question about if it's still physically feasible. How do you deal with so your optimism you're sanguine, you're, you're you're quite pleased with the way, you know, Glasgow, turned out the top level four outcomes, the sectoral outcomes, you think it's a good outcome? And how do you square that with the fact that we're making sort of incremental progress, bending the curve down incrementally with every five years or every COP plays its role? But we're running out of time, aren't we?

 

GT: We are, we are. Me and everybody else who turned up to COP would like to see that that transition happen quicker than countries are committing to. There's no, there's no doubt about that. So yeah, I just, this is a political process. It's a tragedy of the commons, we have to bring everyone together to try and agree that we have huge disparities of income and wealth and 200 years of historical emissions from certain countries and not from others, you know, every time someone, you know, pops up and says, you know, China's the largest polluter in the world by a factor of two. Somebody else says yes, but America and Europe are responsible for 80% of the co2 in the atmosphere, there's always those, those unavoidable problems and challenges in terms of the equity and how you share the burden of this, this, this this global challenge. So yeah, we would all like to reduce co2 emissions and greenhouse gas emissions immediately. For the health of the planet, it's just really difficult to do, and we need to, you know, take take our victories where we can get them.

 

ML: Okay, but, but that sounds like you've given up on 1.5 That you're saying, it's just too hard, we'll do what we can. Is that your position?

 

GT: I probably have given up on 1.5?

 

ML: Because I wrote just… So I wrote a piece called Let's Toast to Glasgow, anticipating this success, even though we're probably toast we've had I think, was ‘Let’s Toast Glasgow, Even if We're Toast’. And it's not that I am happy about it. I just like you, I think that you know, there is a certain sort of inertia, there's physical inertia, engineering, inertia, financially, there's, but there's also just political inertia and human behaviors, and so on. So I have, I have, I work very hard, and I'd like to get as close to 1.5 as possible, but I am starting to make my peace with the fact that we will probably not get there. But a lot of the world is now not in that place. They are now absolutely, you know, committed all of the signalling is about 1.5. How do we sort of back off from that? What happened?

 

GT: Oh, that's a great question. Because one of the, one of the huge successes of Paris was the simplification of the of the of the goal 1.5 To all or less than two degrees on the

 

ML: Well below 2 and as close to 1.5…

 

GT: The simplification and directness of a target like that, that the whole world can get behind was incredibly important. And it's the same with net zero as well, just those two words become very easy to understand very easy to, to, you know, for everybody, you know, be it a, you know, a tech geek or or person in the street. So that simplicity was was a huge success and to move away from that, and, you know, well, let's do 1.7 1.8 1.2, it's once you do it once, then there's a sort of, I think there's a slippery slope. So I would keep on with the 1.5. For that reason, otherwise, you backslide once you can backslide again. And I think you lose, you lose that compulsion and the teeth. So I would keep on with 1.5. For that reason,

 

ML: I think this is a topic that's going to start becoming more and more salient, because we're going to go through 1.5, probably by 2040. And at that point, at that point, we have to have, whether we afterward say, Oh, well, we'll do lots of carbon capture from the atmosphere. And we'll try and reverse it, which is sort of built into some of the models, and I think, deeply, deeply improbable. But we're not going to be able to maintain the fiction of 1.5 forever. And I have to be honest, if I think if I reached the end of my career, which we'll be around 2050. You know, I've got good genes. And if in 2050, we're still on track for 1.7 or 1.8. I refuse to see this as a huge failure.

 

GT: If we can limit it to that, I'll be happy as well, I won't be much behind you.

 

ML: Very good. And on that, on that note that, that we're starting to get philosophical. We've done an incredible tour of what COP did and didn't achieve and some of the implications and ramifications for different stakeholder groups. We did it without using the word which is always good. In this day and age. We didn't use the word hydrogen, which I have to celebrate I've now earned myself a beer tonight or carbon capture and storage. Very good. Although we did use direct air capture, so but I think we got away with it.. It's a great pleasure talking to you Guy…

 

GT: Very good. Nice to see you, Michael

 

ML: So that was Guy Turner, CEO and founder of Trove Research, an expert on corporate climate commitments and the use of the carbon markets. And that brings to an end this special edition of Cleaning Up.