As referenced in this very newsletter last week, climate change is a global issue that’s going to require international cooperation and coordination on a scale the likes of which we have yet to see. Despite how tall a mountain this is to climb (a metaphor that may lose some of its luster with the world’s glaciers melting faster than ever) it has not stopped world leaders from gathering and talking about cooperating. In fact, as also referenced last week, on April 22 & 23 President Biden convened a Leaders Summit on Climate, virtually gathering over 40 world leaders in an effort to “galvanize efforts by the major economies to tackle the climate crisis.”
While the Summit touted an impressive turnout and no doubt covers an important topic, a gathering of this sort is not all that uncommon. In fact, organized by the UN, world leaders have met on an annual basis over 25 times to discuss this very topic — perhaps the most famous of these meetings happening in 1997 in Kyoto, Japan and in 2015 in Paris, France. At these prior conferences, major economic powers have committed to non-binding emissions reductions intended to combat the impending — and now, we at FWP would contend, arrived — climate crisis. With the next gathering (COP 26) scheduled for November 2021 in Glasgow, UK, multinational calls and (non-binding) commitments to action are nothing new.
As loyal newsletter readers of mine you may be alarmed that the resident FWP Pollyanna (self-proclaimed) is sounding so flippant. Have no fear. While it is true that any commitments made at this summit, and previous summits to date, are non-binding and accountable to nothing other than good intentions and public shaming, messaging is important. And while that messaging needs to be followed by action, the White House highlighted two “Key Themes” that are encouraging and of particular interest to FWP and our clients. First, the White House stated its goal to mobilize “public and private sector capital” for the transition to net-zero economies. Second, the summit was meant to help spur “transformational technologies that can help reduce emissions and adapt to climate change.”
Any chance we have, as a world, at adhering to the 2015 Climate Agreement’s goal of limiting warming to 1.5-degrees Celsius relies on technological breakthroughs in energy production and distribution, electric vehicle production and infrastructure, carbon capture, and a myriad of other sectors. This is not news to us at Flat World Partners. These are all sectors that Flat World has underwritten and continues to underwrite. The overt commitment of 40+ major economies to this goal and their acknowledgment of private capital’s role in the transition simply strengthens the tailwinds blowing us, and our clients, towards above market returns and a net-zero future.
Tucker Pribor, VP Investments
The AP reported that new 30-year temperature averages show that the US is now a full degree hotter than it was just two decades ago.
Want to see how these individual country commitments can affect global temperatures? Climate Interactive has created a free simulator that can show you.
Want to learn more about the technological breakthroughs needed to meet our goals? Bill Gates recently published How To Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need, his blueprint for achieving net-zero global emissions.
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