Our ESG and Climate Piece today focuses heavily on COP26, which begins this weekend, and has been the subject of many of this week's stories, as attending countries make their concerns and preferences known and as companies and lobbying groups try to be heard. The linked FT article talks about the minimum needs from COP26. We highlight this because we have been talking about the same things for months – the significant gap between what is pledged for 2030 and what is needed, and the need to attack emissions of methane and CO2 aggressively. The methane issue can likely best be achieved through legislation – especially as some of the leaks around the world may not belong to anyone, who could benefit from an incentive or be penalized for the leak. The CO2 emission issue will always be bet addressed through a pricing mechanism on carbon.
Separately, we get a sense that China’s goal of net-zero by 2060 has legitimized the goal for others, with Russia and now Saudi Arabia joining the 2060 club. In recent work, we focused on the competitive edge that China might gain from being a decade late - China: A Challenge With 2060 Goal But Also A Possible Edge. The advantages discussed in this report might also accrue to Russia and Saudi Arabia. We do not see this ending well, especially if others with significant climate goal challenges decide that this is a better club to join.
