May 29, 2023

How private sector could address worst impacts of climate change – UK MP, Alok Sharma

How  private sector could address worst impacts of climate change – UK MP, Alok Sharma

Sir Alok Sharma MP is a member of the UK Parliament and was President for COP26, the 26th United Nations Climate Change Conference which held in Scotland in 2021. 

As a well accomplished politician that has served in a number of cabinet roles including Secretary for Business, Energy and Industrial strategy for the UK Government and Secretary of State for International Development with a background in private sector grounded in Finance, he is well positioned to share perspectives on current shifts within the global climate action sphere. On the sidelines of The Global Citizen NOW Summit; TUOYO AMUKA sat with him to discuss how the private sector could champion progress with climate action & other ideas. 


Good day Sir Alok, pleasure to meet you indeed and thank you for your time. Firstly, the gap between the Global North and South in terms of climate impact, and resilience continues to grow, whilst national governments make the appropriate announcements for bridging this case in capabilities, how do you genuinely see a more equitable position emerging across the world? 

The first thing to understand is climate change does not recognize borders. And I think governments across the world have understood that, it’s one of the reasons why they all came together at COP 26. Where we agreed the Glasgow climate pact committed to by almost 200 countries; a common set of goals and framework that would be deployed to tackle climate change. 

But you are absolutely right, as the case is whilst we all are being affected; some countries are more affected by the changing climate than others. Africa as a continent is responsible for around 4% of global emissions and yet many of the countries in Africa are at the frontline of climate change. It’s why I think it’s incumbent on the Global North to work with the Global South and support those economies transition to a clean future. And I can give you a concrete example of how we’ve done this. 

In the lead up to COP26, we worked with the South Africa government to set up the Just Energy Transition partnership; worth eight and a half billion dollars to help South Africa transition from coal to clean energy. We have since replicated this model with other countries like Vietnam and Indonesia. Fact is we need to do a lot more of this and make sure that we are helping economies in developing country in the Global South to leapfrog the dirty industries that delivered the growth in the Global North, as I said, and that has to be a partnership.

The establishment of a loss and damage fund for developing countries and countries in need was indeed a key achievement from COP27. What does a practical framework to it’s establishment and deployment look like after the excitement that emerged from this announcement?

That was certainly the highlight of COP27 – the agreement to establish a loss & damage fund. Now obviously, I’m no longer in the in the UK Government, thus can only present my perspective of procedures that will take shape. But as I understand a transmission committee has met and work is underway into how this will be delivered. We shall see details that emerge however I hope that real progress will be made by the time we get to COP28, which will be held in the UAE.

In terms of who pays into this fund, we need to expand the sources that go in; there are of course traditional countries that have funds going into the support of others countries. But we need to expand this and assess critically who the biggest emitters are right now. I also think there is a wider point here, which is that putting money into a loss and damage fund will clearly help. 

But the scale of the challenge is such that if we’re going to get to net zero by 2050 by the middle of the century, across the world, that is going to require $125 trillion. That has to come from the private sector; going into climate resilient infrastructure, going into energy transition. And I think what we need to see happen is government work to deliver public finance, which then leverages in significantly greater funding from the private sector to deliver this change.

It is established that the effective and sustainable approach for developing & low-income countries to commit to climate adaptation strategies is obviously hinged upon climate finance. 

What can be done objectively to ensure commitments materialize? 

If we go back to COP26, one of those sorts of tough discussions we had was to get an agreement from developed countries to collectively at least double their provision of adaptation finance by 2025 on 2019 levels. And I think what we need to see at this COP is what progress has been made in terms of this goal because I think historically; adaptation finance has always been the poor cousin of mitigation finance. And I think we needed to see more of a balance coming through in this. 

Going back to this point about what we also need to make sure, in addition to that is that we are unleashing the trillions from the private sector. And I think one of the ways you do that is also to price climate risk into the investments that are being made so that you make sure that you’ve got climate resilient infrastructure that is being in place, and that we have projects that the private sector is able to invest in, This has to be a partnership between governments, between business and civil society.

Can a world where net-zero is achieved come to be given variations in progress, differences in economic profiles and positions, commitment levels from different political institutions and countries across the world?

I see it positively, we are seeing progress across the world. And if you say to me, do I think we will get to a net-zero emissions economy globally? 

My answer is yes, I fervently feel we are on the way to addressing the worst impacts of climate change. It’s a question of speed. We need to speed things up. I mean, I’ll just get back to this point when we took on organizing COP26, less than 30% of the global economy was covered by net-zero target. By the time we got to COP26, over 90% of the global economy was covered by a net-zero target. So if you work collectively together and there is peer pressure, this can happen. 

But you make a very important point in that different economies are developing at different rates, the requirements in terms of finance are different. And when countries set out their nationally determined contributions, particularly those countries in the Global South will say, yes, we can cut emissions by a certain percentage. This is the amount of money that we have internally to do this. But we need some additional support from the outside. And that goes back to the point I was making about finance. Finance is ultimately the glue that binds all of this together. And that’s why we need to unlock a lot more finance.

The private sector is a critical element of the climate transformation matrix. What would deepen private sector involvement in the climate action sphere beyond the wider adoption of ESG policies?

I think there are very many companies already taking this issue incredibly seriously. We have thousands of large international businesses across the world signed up for the UN’s Race to Zero campaign; that commit to be net-zero in their business by 2050. What we now need to see is those same companies setting out their transition plans. It’s one thing is to commit to net-zero by 2050. The other is what are you going to do over the next few quarters? What are you going to do with the next year, the next five years or the next 10 years, and to have those transition plans in place. In the United Kingdom, the finance ministry has set up a transition plan Task Force.

And the aim of that is to come up with mandatory requirements in terms of the standards that companies need to adhere to in coming up with that transition plan. So we can compare and see on a like for like basis, who is actually making progress. We certainly need to see more of this. And the final thing I would say to you is that there are countries that I have been to where the business community is driving this issue forward and actually taking government along with them. The reason they’re doing that is because they do see the race to net-zero as one of the biggest financial economic opportunities that there has ever been. As they can see that this is not only good for the environment but it’s good for their bottom line and profitability. It’s good for economic growth and it’s good for green jobs which pay well.

My final questions.. firstly, the African Carbon Markets Initiative (ACMI) was launched at COP27. The African Climate week will hold in Kenya September this year, convened by President Ruto of Kenya. What advice would you offer to the leadership of the first group of African countries that have committed to being involved? And what do you think the next steps should be? 

I am always reluctant to sort of give advice to people because everyone has their own approach to this. But what I would say more generally is developing carbon markets and ensuring that they have integrity and credibility is also very important. And the only other point I’d make is that at the end of the day, ultimately developing a global price for carbon is going to be really important because then you can tangibly drive real change. 

When you are doing anything on a global basis it is always very challenging. I know that from the work we did at COP26. But ultimately what we want to be driving towards is a global agreement when it comes to carbon pricing. 

Thank you very much. Lastly, what role do you see the media playing? and how can we support this transition, locally and globally? 

I think keep doing what you’re doing which is use your voice as a media platform. Amplify the messages that come from forums and engagements such as this, amplify the messages that you hear from young people across the world and give them that platform so they can speak to power, to the leaders of their countries, of governments and of corporate structures. This is the invaluable and key role the that the media can and should play.

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