President Biden Helps Shaping the New Global Climate Agreement
Earlier this year, a deadly winter storm hit several parts of central and southern United States. In areas such as Oklahoma City and Fayetteville, Ark, the temperatures were as low as minus 14 and minus 20, respectively. These were the lowest readings there in over a century.
The extreme weather came with disruptions to several amenities. These include electricity and water treatment plants. As a result, roughly 3.5 million Texans were without power and heating at such a crucial time and four hundred thousand without water. This may be the natural disaster with the most damage and losses (both in terms of physical assets and economic losses), which is now estimated at around 200 billion USD.
This is just an example of the negative effects that come with a changing climate. And it’s not the only one. For example, extreme drought and heatwaves have ravaged 95% of the Western United States, bringing soil and water reservoirs to unprecedented emergency levels.
According to NASA, this is the worst megadrought in over 500 years. So far in 2021, there have been 41,768 wildfires across the country, burning more than 4.8 million acres. In 2020 alone, according to AccuWeather, the total cost due to wildfire in the US amounted to US$ 150 billion.
Such natural hazards demonstrate two key things; the effects of climate are here, and the US is largely unprepared. With the latter, the primary reason is geopolitics and a lack of focus on climate risk by the Federal Government.
Under the previous administration, the US withdrew from the Paris Agreement. Moreover, the Clean Power Plan limiting GHG emissions was replaced with weaker regulations. Under president Biden, efforts to reverse such actions are a key priority. This has seen America’s collaboration with other nations combating climate change restored.
But, beyond restoring the US to its championing role in global climate change matters, more robust domestic policies are now in place.
A Changing Tide
At present, the US is playing catchup on matters of climate change. However, with recent events, the policy dialogue is headed towards a more climate-friendly pathway which could result in one of the most extensive investment packages amounting to USD 3.5 trillion.
If enacted, it will be the largest investment toward addressing climate change. It aims to reduce carbon emissions by facilitating a transition toward renewable energy sources such as solar power and wind. There will also be tax incentives for renewable energy and electric vehicles.
Considering the imminent risk and the potential cost of not acting, such an investment of unprecedented proportions has massive national and international implications and urgency.
The Biden Plan | 2030 Greenhouse Gas Pollution Target
During the Leader’s Summit on Climate held in April, president Biden challenged world leaders. He urged them to increase their ambition and efforts in fighting climate change and building a more resilient global economy and society. Moreover, he presented this fight as a way to rebuilding the world in a better way creating innovation and cleaner new jobs.
His plan on sustainability also focuses on:
● Advancing environmental justice
● Ensuring economic competitiveness
● Creating well-paying green jobs
● Improving health and security in the US
● Reducing people and assets vulnerabilities to natural hazards
● Promoting ESG as the new frontier of investment
When it comes to CO2 and Methane Emission Reduction, the President of the US wants to achieve 50–52% by 2030. Leading the charge towards this goal is his infrastructure plan. This will see significant investments towards building a more resilient grid and advancing the transportation sector.
There will be a push towards cleaner ships, trains, and electric vehicles. Accompanying it will be investments in battery manufacturing with the US to support such initiatives and power manufacturing.
While many citizen the plan, particularly in the energy sector as over ambitious, this is the only way to move the agenda forward and create a “climate investment tipping point” resulting in a shift across sector to decarbonize the global economy.
Justifying Green Finance
Undoubtedly, investing in green and sustainable technologies and processes will come at a high cost. But, as climate risk continues to increase, so too will the frequency and intensity of extreme weather events.
Along with the damage they cause also comes an economic toll. According to a Swiss-Re report, the global GDP losses due to climate change may reach $23 trillion by 2050.
In the US, there were 22 billion-dollar extreme weather events in 2020. Their total cost was roughly 1% of the national GDP. However, this number does not seem to fully capture all direct and indirect costs caused by these disaster events, and I believe the final figure would be at least double or treble, as I mentioned in discussing in an up and coming climate change article to be discussed at the UN over the coming weeks.
How Will Such Domestic Environmental Resilience Impact the Globe?
If successful, President Biden’s efforts and investment towards climate change will have a considerable impact. More importantly, it will set the tone for other nations to follow.
In this regard, the UN Climate Change Conference in Glasgow, UK of November 2021 will likely be a frontier event. The direction and initiatives taken by the US government will influence the process and framework that will catalyze climate finance for the foreseeable future. As such, I anticipate a significant increase in investments towards clean energy, and cleantech in the coming years.
