By Anders Lorenzen
With the pandemic, most of the world’s population has endured a year that they would rather forget, and it would be easy to adopt a narrative that everything has gone to shit.
We have definitely had many things to be pessimistic about. Many have faced terrible times in 2020 and have lost loved ones to COVID-19. Many of the deaths might have been avoided with better management of the pandemic. Many have lost their jobs and do not know what 2021 has in store for them in terms of getting back into the world of work.
But one ought to remember to celebrate the advantages of globalism and how the world can come together to solve a problem facing the whole globe. This should give us some optimism about solving climate change. A vaccine has been developed in record time as a result of cross-border cooperation. This should give us confidence, and it demonstrates how quickly we can act when we need to. It also proves just how crucial science is and should be, and how grateful we should be to scientists working non-stop since early last year to find solutions.
And there is a plausible argument that the pandemic has even fast-tracked important climate and environmental policies, and provoked discussion of policies where society is more friendly to the environment. Such discussions and debates may not have happened or been possible was it not for the pandemic.
Even though responding to the pandemic dominated 2020, we should pay some attention to some of the positive climate and energy trends in 2020 which will continue into 2021.
Below I aim to provide a snapshot of why we should head into 2021 with a positive mind.
Leaving it in the ground
While we are not where we want to be, it is often important to reflect on how far we have come and where we were 10-15 years ago.
Renewables have become mainstream, and together with the argument that we need to phase out fossil fuels. Just ten years ago that was not that evident.
Denmark’s move to deny any new oil licenses shows that we are starting to leave fossil fuels where they belong; in the ground.
While Denmark’s 103,000 daily barrels of North Sea oil is not a huge amount in terms of emissions, it sends an important signal to other big oil producers, particularly neighbouring large oil producers, Norway and the UK.
We could very likely see further pledges of this kind amongst other oil producers, especially as we gear up to COP26 in Glasgow at the end of this year.
So we are starting to leave oil in the ground, and that is a good thing.
The emergence of hydrogen
In 2020 hydrogen emerged as a viable climate solution, offering advantages that renewables cannot. It can decarbonise transport and heating which renewables can only do if we electrify those sectors. Several exciting projects and consortiums emerged in 2020, and we would expect these trends to continue in 2021 with the first projects starting to take shape.
Green finance is starting to dominate and it is here to stay
While many stocks took a hit from the pandemic and the resulting lockdowns, green stocks seem unaffected and continued to climb, and are now becoming more dominant players on the world’s largest stock markets. Tesla made its debut on S&P 500, and a little known Chinese electric car maker Nio Inc surged on the New York stock exchange up past $50 dollars per share from below $10.
Also solar stocks like Jinkosolar and the wind turbine manufacturer Siemens Gamesea Renewables are examples of clean energy stocks doing particularly well in 2020, together with hydrogen fuel cell stocks and more are expected to IPO in 2021. These are just a few examples of the many clean energy and cleantech stocks doing particularly well. Stock prices also favoured companies taking sustainable actions. In addition, the trend for green bonds and green mortgages remained strong and the pressure continued to mount on pensions funds to divest from unsustainable companies provoking a positive response.
2021 – a year of climate action
There is every reason to expect that the positive climate trends will not slow down in 2021.
One of the key nominators is of course the COP26 conference slated to be the first crucial climate summit since COP21 in 2015 which saw the signing of the Paris Agreement. While some countries have already set out further climate commitments and ambitions, we will see a raft of new countries all wanting to set the most ambitious climate plans. And to fall in line with government policies we will see a lot of companies trying to reframe themselves to be more sustainable and as a result making new commitments. The challenge will of course be to see what is actually genuine and what is greenwash.
As the world’s largest economy we cannot forget about the US, and what happens there matters. On the 20th of January, Joe Biden will take office as the 46th President of the US. He will do this on the strongest climate platform announced by any previous president, including first of course to rejoin the Paris Agreement. What he actually can do remains to be seen, but one thing is certain, the US as a place for sustainable companies to do business is back and the country will be a key space for the green economy.
While the world has been preoccupied with COVID-19, companies and organisations have not stopped innovating, and various breakthroughs has been made and will of course continue to filter through in 2021. In addition, we can expect to see significant progress on carbon capture and storage (CCS), carbon taxes, energy storage, electric vehicles and of course many other new ideas and solutions that we don`t yet know about.
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