CSIS Fellow in Energy & Climate Change Morgan Higman joins Yahoo Finance Live during the start of Climate Week to discuss progress made on net zero goals, how geopolitical tensions are affecting climate policy, and what the Inflation Reduction Act means for climate agreements.
- Well, the UN's New York Climate Week is officially underway, with business leaders, government officials, and activists all meeting to discuss progress towards a net zero world. Last year, world leaders agreed to set more ambitious climate goals at the COP26 summit. They were given a September deadline to submit new plans, but only 11 of the 196 countries have done that. So it was a very different macroeconomic environment, changing expectations.
Joining us to weigh in is the Center for Strategic and International Studies Energy Security and Climate Change program fellow, Morgan Higman. Morgan, to say that things have really shifted would probably be an understatement, especially given what has transpired since Russia invaded Ukraine, certainly countries in Europe now looking at energy security and saying, well, maybe we need to potentially push off some of these really ambitious goals towards clean energy. How do you think that all plays out this week?
MORGAN HIGMAN: Thank you for having me. I think it's absolutely true that we live in a different world than we did in November of 2021. Russia's invasion of Ukraine, of course, is the top of that, but inflation spiraling kind of all around the world, we're seeing energy, food, and supply chain sort of concerns, all of these are creating challenges for those important climate commitments that have been made.
And I would say that we've seen a variety of responses. Some have really doubled down on renewable energy and energy efficiency as a way to address these energy crises we're seeing. Others are, of course, falling back on fossil fuel resources. And some, frankly, I think, are kind of attributing some of these energy costs to energy transition and climate commitments that they've made, maybe not rightfully.
We've also seen that these geopolitical tensions have sort of undermined some of the bilateral agreements that came out of COP26, perhaps most importantly that between US and China. At the same time, climate impacts are becoming increasingly evident all over the world. Nonetheless, I think it's important to note that we have seen some measurable progress. In particular, the International Energy Agency published some figures highlighting sort of continued growth of renewables globally and the doubling of electric vehicle-- vehicles around the world. So we're seeing some progress still. I think that Climate Week will, of course, highlight some of the challenges and opportunities, and then COP27 in November will do the same.
- You've got the president coming in to New York tomorrow to address the UN General Assembly. Obviously, this isn't just about climate. Other geopolitical issues, too. But he comes in with a big package to say, look, we were able to meet some of these goals through the Inflation Reduction Act. How do you think that divide between what the US has pushed for and Europe is growing, when you consider Europe is really the one that is experiencing the brunt of the energy crisis?
MORGAN HIGMAN: Europe is the one experiencing the brunt, but I think the good thing about this meeting is that it highlights opportunities for some of these global powerhouses to come together. They represent a great deal of potential for investment and innovation. And one of the things that is really coming out of this crisis is the need for diverse renewables, diverse supply chains and energy resources that can be connected and shared globally.
That will require new infrastructure investments and a lot of private sector investment in these resources. And legislation like the Inflation Reduction Act will support that. But some of these meetings will provide opportunities for major leaders to come together around some of these goals. And we need that. That said, you know, Climate Week is important, but it's probably not going to be the place where we can map the road to net zero, right? These conversations are going to continue for a long time.
- Yeah, it is an ongoing conversation. You know, as we said, this isn't just a week where global leaders are gathering. A lot of business leaders also coming into town at a time when there's growing skepticism, from the investment perspective, on ESG investing. And part of that is about whether, in fact, that the standards are right, whether there should be universal standards.
How do you think that affects the messaging from these companies? Number one, as you said, they're being hit by inflation. Shareholders are saying, look, maybe this isn't the time to double down on clean energy. At the same time, there's an investment community that's saying everything that was pushed for in ESG hasn't necessarily materialized.
MORGAN HIGMAN: Absolutely. And I think there's a great deal of tension between the need for sort of ambitious and accelerated solutions, and also the need for credibility and transparency. And we'll see that play out in a number of different ways, I think.
And new technologies will provide some opportunities to decarbonize sectors that haven't seen a lot of progress. In particular, we can think about transportation and heavy industry. And we've also seen some renewed commitments to, you know, reforestation and sustainable investments that are more environmentally focused that might have broader appeal for some of those who have skepticism about these emerging technologies.
- Well, we will be watching for any headlines that come out this week. Morgan, it's good to have you on today. Center for Strategic and International Studies Energy Security and Climate Change program fellow Morgan Higman.