Bloomberg What to Watch: Wednesday Morning Briefing
November 10, 2021
The day marked a pivotal point after an extended all-night session to put forth the first draft of documents containing deals and commitments that will be negotiated in the final days of the conference. A Bloomberg panel takes the temperature of the draft, and what to expect from here, and a panel of industry experts looks at the EV evolution.
Click HERE to view the video of the full discussion.
- Wes Bricker, Vice Chair – US Trust Solutions Co-Leader, PwC
- Julia Pallé, Sustainability Director, ABB, FIA Formula E Championship
- Kristen Siemen, Vice President, Chief Sustainability Officer, General Motors
- Anne Smart, Vice President, Global Public Policy, ChargePoint
- John Fraher, Senior Executive Editor, Bloomberg
- Karoline Kan, Reporter, Bloomberg Green
- Akshat Rathi, Reporter, Bloomberg Green
- Aaron Rutkoff, Executive Editor, Bloomberg Green
Bloomberg Green Reporter Akshat Rathi offered a first glance at a “just dropped” draft statement on a consensus released at dawn after what was apparently an all-night session. Three documents totaling 14 pages are a starting point for negotiations that will look at every detail, and include ongoing aspects of COP26 discussions, such as the creation of a carbon market. Seen for the first time; plans to phase out fossil fuels, not mentioned in the Paris Agreement due to pressure from producing countries. Also notable is the acceleration of Nationally Determined Contributions (NDC) updates from the current arbitrary five years. Financial updates, with the inclusion of 1.5 degrees, will be expected next year, with an assessment in 2023. It matters because cheaper technology and more funding can move transition forward at a faster pace when there is a better overview of progress by countries. Notably missing from site deals are forest and coal, alongside methane. “I expect a push to get them in the final document,” Rathi said.
Rounding out the big site deals is a two-parter on the phase-in of electric vehicles. From the UK comes the proposal to end fossil fuel cars and vans in developed countries by 2035 and developing by 2040. Notable holdouts coming out of the room are the U.S. and China. From the Netherlands; a plan that 30-percent of truck sales be electric by 2030, to all by 2040 and no fossil fuel trucks on the road by 2050. At least 13 countries are on board, as are New York, Washington and California, and carmakers Ford, GMC, Daimler, BYD and Volvo.
How are the players – negotiators, NGOs and activists – reacting? It’s early, and although the big concepts are “baked in,” Rathi said, much will change. The inclusion of fossil fuels is satisfying the crowd. Look for financing to be a hot topic, as the numbers for adaptation and developing companies remain vague.
As COP26 comes down to the wire, China is holding back in light of what they call unresolved financing issues and unfair criticism, according to Karoline Kan, Bloomberg Green’s Beijing-based reporter. It’s a core issue as the country maintains its developing status, and believes “it is doing its fair share in contributions and its efforts are not being fully recognized by the world,” such as their announcement this year to stop building coal-fired power plants overseas.
U.S. envoy John Kerry told Bloomberg the day before about his lengthy negotiations with Beijing and China’s COP negotiators to get them to sign agreements, said John Fraher, Bloomberg Executive Editor and panel moderator. He asked specifically about the methane pledge. Kan said they are willing, but are looking first for more commitments from developed countries.
More domestic conversation is needed for Chinese citizens to be aware of the nuances of climate change, Kan said, describing a need for a grassroots effort. State media’s COP coverage spotlights that issue, with focus on the mundane, such as the large number of people waiting in lines, and misleading stories of how China’s accomplishments are being heralded. Kan offered an anecdote to illustrate how coverage is avoiding the main issues. When an American reporter asked a Chinese COP representative to answer in English, the response was ‘if she would ask the question in Chinese,’ and that became the big news story. So, at COP, China is looking to position itself as needy, while it seeks to convince its citizens it is the new world leader.
On the upside, Kan said China is now facing the reality of their contribution to emissions. Where they once used per capita rates, they no longer deny the relevance of having the fastest-rising rates. New announcements about commitments made during an internal conference may be coming soon.
Aaron Rutkoff, Bloomberg Green’s executive editor, arrived mid-conference and offered his objective analysis of the proceedings. He was struck by Kerry’s specific and concrete statements that are encouraging the tone of a transition to amping up action. Although the U.S. is not in the deal, Kerry stated its power sector will be coal-free by 2030, Rutkoff said, adding that Kerry’s talk about how solutions will be accelerated in the private sector was sparking discussions among business leaders. He was also buoyed by youth activists talking about their work as a force to make things happen faster.
Going forward, Rutkoff sees new technology and NDC evaluations moving the needle on more informative stories for Bloomberg Green Magazine, giving them the ability to tie emissions to countries and companies, exposing footprints. Fraher noted the exciting work by Planet and its satellite mapping data.
As to how the debate will go on the COP26 deals, Rathi offered perspective, noting degree targets are political, not scientific. “But every .1-degree Celsius matters because while there will be tipping points, scientists don’t know when they will come.” Going into COP26, total pledges brought warming to 2.1 degree, falling to 1.8 degrees with commitments made during the talks. “Quite remarkable progress,” Rathi said, with the caveat of 1.8 sitting within a broad fan of possibilities.
Moving on to a conversation about electric vehicles (EV), a panel addressed the draft agreement’s pact by some major carmakers to phase out internal combustion engines by 2040, what regulators can do to help speed the transition and how to inspire consumer confidence.
This is the next step GM has been looking for, because they never expected to be able to do it alone. “It’s going to take public policy. It’s going to take governments. It’s going to take others in the industry, said Kristen Siemen, Vice President, Chief Sustainability Officer, General Motors. “It’s going to take our partners from a charging infrastructure standpoint and utilities.”
Building out a charging network is key to motivating consumers. Anne Smart, Vice President, Global Public Policy, ChargePoint said people think in terms of a gas station model, but there are more existing opportunities than they realize. “You can plug in anywhere you park, including at home, work or while shopping,” she said. A “seamless ecosystem” will come with a combination of governments, business and employer commitments, Smart said. The new U.S. infrastructure bill earmarks up to $7.5 billion for a passenger vehicle highway charging network. That will only cover up to 80-percent, but Smart noted there are also private and utility partnerships, along with allocations for ports, and school and municipal buses, and the like.
Excitement for, and a different perspective on EVs, will help spark the revolution, according to Julia Pallé, Sustainability Director, ABB, FIA Formula E Championship. The global race series includes a line-up of car manufacturers using it as a lab for EV technology, and the power of sport as a way to showcase the technological advances that will be used in passenger vehicles just a few years out from track development. Around the world, Pallé said, they are seeing “governments coming to terms with EVs as the main way forward,” with policies to eliminate internal combustion engines.
When it comes to incentives, Siemen said, GM looks at three key elements; charging infrastructure, other ways to help customers see how they can personally make the transition and research and development.
Smart described a future of gas stations evolving, rather than being disrupted, since they are already conveniently-located for travelers. Charging time will create more retail opportunities. A network will find people topping off car batteries wherever they can, just as we do now with cell phones.
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