Once again, politicians, environmentalists, and industrialists from all over the world are full of expectations and doubts as the UN climate change summit (COP27) will be held in Sharm el-Sheikh, Egypt from November 6 to 18.
The COP26 last year held in Glasgow forged some promising agreements, from phasing out "inefficient" fossil fuel subsidies" to China and India pledged to phase down coal use, and the summit also gave the green light for the establishment of a global carbon trading market system.
Yet, the war in Ukraine changes everything, where it seriously endangers energy security, and drives global inflation. Geopolitical interference has artificially disrupted the global energy situation, especially impacting the European energy supply. Germany is now considering rebooting coal power, and France has unveiled plans to ramp up nuclear energy. Changes in the global energy supply and demand pattern affect the daily livelihoods and even the basic survival of people across the globe. In the short term, "available energy source" has become far more important than " environmentally friendly energy source". The goals set to be achieved previously have to be put aside. Both energy-consuming countries and energy-producing countries are under the pressure of the world's largest energy crisis.
As the war ravages Ukraine, other parts of the world are facing extreme weather. Severe droughts sweep across the northern hemisphere. One of the hardest-hit regions is the Horn of Africa, which has experienced four consecutive rainy seasons without a drop of water, while the Yangtze River Basin of China dries up. Climate change spells catastrophe and it is an increasingly pressing matter that affects every single person on this planet.
The most direct impact of it is food security. Insufficient rainfall in India this year has affected agricultural production in several regions, including West Bengal and Uttar Pradesh, which account for a quarter of total rice production. The total rice planting area in India has decreased by 13% and its national rice production is expected to hit the lowest level in three years, forcing the Indian government to implement a rice export ban. In Germany, France, the Netherlands, and other important potato-growing countries in Europe, the potato harvest in 2022 is expected to be significantly reduced. More and more key agricultural producers have decided to restrict their food exports. The impact of the COVID-19 pandemic in the past two years has already tightened the global food supply. Now, with the impact of the Russian-Ukrainian war, the world has begun to witness a food crisis. The number of those facing acute food insecurity has soared, from 135 million before 2019 to the current 345 million, according to the World Food Programme.
We should, therefore, understand that solving the problem of global climate change is a worldwide and systematic battle that involves all, an urgent top priority one at that. The economic plans and policy indicators of various countries must be adjusted accordingly to include "climate disaster cost". Understandably, different countries are at odds on many issues, but climate issues transcend politics. In the medium and long term, geopolitical risks will accelerate the global energy transition, hastening the pace of decarbonization, and improving energy efficiency. Green and low-carbon transformations require collective efforts, and not a single nation can exclude itself from this.
The clock is ticking for humanity. To achieve the global temperature control target set by the Paris Agreement, some institutions estimate that the world needs to invest more than US$ 1,000 trillion. On the premise of ensuring economic security, it is not easy for many countries to achieve carbon emission targets. It is, therefore, necessary to strengthen the multi-subject and multi-level cooperation in this, to create conditions for sufficient communication and exchange, and make appropriate compromises in order to build mutual trust. The focus of the COP27 summit should then be on formulating pragmatic solutions without being too critical.
The motto of COP27 is "Together for Implementation". Egyptian presidency's goal is the implementation of various climate response initiatives needs to be "on time and at scale" and be "specific, measurable, and impactful". We hereby suggest that the COP27 agenda should focus on the following two aspects, which will help make multilateral climate change negotiations to be more effective.
1. Further optimization of the cooperation and consultation mechanism of the United Nations
On the basis of the existing UN dialogue mechanism, governments and the public sector are more dominant in the formulation of international agendas and rules. In the response to climate change, there is a contest for the voices of industrial development planning and standard formulation to be heard. The calls for equal participation, fair transformation, and organizational cooperation are getting louder. To achieve the optimization of such a mechanism, the UN will need to work with private companies, non-profit organizations, civil society, and academia in developing countries to assist in obtaining necessary and reliable data. Market openness and fair competition too will be indispensable in this.
In this regard, the UN should be innovative, provide an open policy platform, and strengthen policy dialogue and research interaction with think tanks of various countries. As an influential large-scale "super-government" organization, it would be crucial for the UN to work closely with these think tanks in research projects involving a wide range of policy issues and conducts in-depth research on some of the critical issues, in addition to information sharing. As think tanks provide professional capabilities in policy formulation, this effectively contributes to the improvement of global governance.
In the design of global technical regulations and related standards, it will be essential for different groups to exchange their experiences, as this is beneficial to enhancing synergy between countries, reducing the cost of implementing various goals, and improving the efficiency of problem-solving. In fact, the financial risks and major issues that climate change poses to businesses make it imperative for more business executives to be strategically aware of the risks. Business operators also need to ensure that key stakeholders such as employees, customers, and long-term investors are informed of climate change-related issues, thus helping them to be oriented towards sustainable development and equipped with adequate professional knowledge. Whether risk management or business opportunity development, relevant concepts should be integrated into corporate culture and development strategies. In this regard, the UN will need to be more proactively providing training and guidance to professionals worldwide.
2. Concentrating on hydrogen energy solution
Driven by the carbon reduction agenda, the development of the use of hydrogen energy is increasingly regarded as an important means of low-carbon energy alternative. The European Hydrogen Energy Strategy (2020) clearly stated that by 2024, electrolyzer with an installed capacity of 6GW will be built in the EU, and the annual output of green hydrogen will exceed 1 million tons. By 2030, the annual output of green hydrogen will reach 10 million tons. In July 2021, the EU supplemented the European Hydrogen Energy Strategy, which aims to ensure a 55% reduction in EU net greenhouse gas emissions in 2030 compared to 1990 levels and to achieve carbon neutrality by 2050.
The UK government has laid a solid foundation for the country to become a global leader in developing a low-carbon hydrogen economy through its Ten-point Plan for a Green Industrial Revolution and a dedicated hydrogen strategy. More recently, the UK's Energy Security Strategy has set an even more ambitious target: 10GW of low-carbon hydrogen capacity by 2030. The strategic plan adopts a dual-track system that prioritizes the development of green hydrogen and blue hydrogen, covering the entire value chain from production, storage, distribution, and application. The UK has released the Hydrogen and CCUS and Investor Roadmaps, setting its support for the sector over the next decade, which will attract ￡ 9 billion of private investment into its hydrogen projects.
The proportion of fossil fuels in China's energy consumption currently exceeds 84%, which certainly does not meet the requirements of future climate change. Under many constraints, it is entirely possible for China to take an unusual path in the utilization of hydrogen energy. China is the largest hydrogen producer in the world and plays a leading role in the field of green hydrogen energy. The layout and development policies in the field of hydrogen energy are constantly being introduced. On March 23, 2022, the country's National Development and Reform Commission and the National Energy Administration jointly issued the Medium and Long-Term Plan for the Development of Hydrogen Energy Industry (2021-2035), which is the top-level design for the development of China's hydrogen energy industry. The Plan clarifies the energy attributes of hydrogen, which is an integral part of the future national energy system and promotes the green and low-carbon transformation of energy-consuming terminals such as transportation and industry, as well as high-energy-consumption and high-emission industries. The European Hydrogen Energy Conference this year was held in Madrid from May 18 to 20. Many industry insiders at the summit were optimistic that China will become one of the most important resource supply and consumption markets for green hydrogen energy, and quite a number of international companies are willing to further expand their businesses in hydrogen production, storage, transportation, and refueling in the country, and each of these fields are interrelated chains. French company TechnipFMC maintains close business relations with many electrolyzer manufacturers in China. In Spain's Elecnor renewable energy division, almost all major factories and suppliers of photovoltaic panels come from China. "Carbon neutrality" goal is expected for China to require an investment of RMB 136 trillion. The realization of green and low-carbon transformation and innovation will catalyze various new technologies and new business models, and usher in many international cooperation opportunities for green development.
In 2020, ANBOUND officially released the report Concept and Path of China's Development of Hydrogen Energy Society, analyzing and expounding the strategic significance of the country's development of a "hydrogen energy society" in detail. The development of hydrogen energy will transcend the significance and value of energy transformation itself. Under the multiple pressures of economic development, intensified geopolitical friction, and global climate change, China's energy security will inevitably manifest itself as "comprehensive security". We believe that the solution of building the "hydrogen energy society" is not only a technical option for certain industries but an energy strategic choice covering technology, industrial production, market application and consumption system. It will lead to a new, low-carbon way of life. This will also bring about a major industrial revolution involving transportation, construction, industry, manufacturing, electricity, and general energy utilization in the whole society. In the end, it will substantial contributions to global climate change, and also contribute to China's Energy security. As a country that consumes a high amount of energy, this option will make sure that the country will not be constrained by non-hydrogen energy hegemonic countries' energy sanctions.
A fairer and more inclusive approach that balances conscience and interests will give more people the opportunity to participate in addressing the world's most pressing issues. As things stand, the UN will need a set of key performance indicators (KPIs) to supervise the actions of those pacts of climate change. COP27 should not become yet another diplomatic gathering that does not contribute to actual problem-solving.
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Yi Wang is Head of Global Development Program and Senior Researcher at ANBOUND, an independent think tank.
