Boris Johnson’s COP26 finance adviser said the government needs to develop “credible” policies to achieve net-zero carbon emissions and provide certainty for investment.
Mark Carney, a former Bank of England governor, attended the Green Horizon Perspectives conference as a UN Special Envoy for Climate Action. The conference was hosted in partnership with the City of London Corporation and the World Economic Forum.
Carney said: “About three quarters of emissions result from the production and consumption of energy in various sectors.
“This underscores the need to green the production of electricity by shifting to renewables and interchange how we use energy by electrifying as much of our activities as possible, from heating and cooling buildings to transportation.”
Investment needs to be made soon
Carney said entirely new cement and steel production processes will be required, and new energy technologies will be needed for sectors such as air transport and shipping.
He added across 10 key sectors that account for three-quarters of global emissions, an investment of around $120 trillion is needed over the next three decades to achieve net-zero.
He said: “Half of this amount is needed to transform the power sector and a third to electrify road transport. But significant investment is also required in buildings, aviation, steel, cement, shipping and agriculture. And the majority of this investment needs to happen soon in order to ensure a smooth transition.”
Transition timeline will see companies facing increased scrutiny
Carney warned investors, banks and the society will increasingly scrutinise companies to meet standards and provide credible plans, turned into action.
He praised the progress made by the UK through making the Task Force on Climate-related Financial Disclosures (TCFD) compulsory by 2025 across the UK economy.
He said: “To stabilise temperatures, we have to reach net-zero and to keep the objectives of Paris within reach, to get on the path to stabilise temperatures at 1.5 degrees, emissions need to fall by a minimum of eight per cent, year on year, for the next 20 years.
“Reducing emissions at this pace and scale demands a whole economy transition backed by a plan and funded by mainstream climate finance. 126 countries have committed to net zero and more could join in short order.”
Carney’s speech was followed by a panel discussion regarding banking on net-zero carbon emissions. It was attended by finance leaders of Natwest, Morgan Stanley and BNP Paribas.
Biden’s Earth Day summit to follow
Carney made his statement ahead of US President Joe Biden’s Leaders Summit on Climate this week. The summit coincides with Earth Day 2021 on Thursday, and Carney is set to reveal which banks will pledge to reach net-zero greenhouse gas emissions by 2050. Dozens of European and US banks are expected to be part of the Glasgow Finance Alliance for Net-Zero.
A spokesperson for the White House said the summit will be a ‘key milestone’ ahead of the United Nations Climate Change Glasgow Conference in November – known as the COP26.
Key November summit in Glasgow
The Glasgow summit is believed to set targets for the financial sector, to meet the Paris Agreement.
President Biden signed the US back onto the climate agreement just hours after being sworn in as president in January.
Former US president Donald Trump has previously withdrawn the US from the efforts to tackle global warming, despite the country being the second-largest emitter of carbon dioxide in the world.