In a curiously organic way, a COP (Conference of the Parties to the UN Framework Convention on Climate Change) also works like this, as a chaotic yet seamless gathering of voices, interests and perspectives.

The endless summit corridors are packed with almost 60,000 participants, each navigating their way to uncertain outcomes at predetermined destinations: a negotiating table, a roundtable discussion or a profound conversation on the future of the climate. In this global microcosm, where governments, businesses, non-governmental organizations and academics converge, the interplay of interests is never stable, yet the wheels of the system remain constantly in motion.

My watch (and feet) can attest to the sheer scale of this gathering. During my time here I have been clocking more than 25,000 steps per day, roughly half a marathon, in my efforts to keep up with the rushing, incessantly conversing human tides.

Renewable price competitiveness isn’t enough

It is easy to point fingers at the more than 1,700 representatives from the oil and gas sectors attending COP29, yet their role in the energy transition is absolutely crucial. After COP28, even giants like ExxonMobil and Shell acknowledged that their future depends on diversifying their portfolios and transitioning to more sustainable business models. The current market is not, however, designed to make clean energy as profitable as oil and gas – complex systemic issues present roadblocks to a competitive transition.

The cost of solar energy has plummeted by 88% since 2010, and onshore wind by 68%. While this has helped to foster key industries such as electric vehicles and solar panels, clean energy is still far from being self-sufficient. Its success depends on a much more complex interplay between industry, governments and infrastructure.

In Spain, for instance, renewables account for 61.5% of installed capacity, with 78,968 megawatts (MW) of production, yet the stark reality is that there are 130 GW of renewable projects waiting to be connected to an electricity grid that is not ready to handle them.

Outdated infrastructure and slow bureaucratic processes are creating a bottleneck that prevents clean energy from being monetized, undermining its profitability and slowing its uptake. The complexities don’t stop there: further progress is also sorely needed in energy storage and data management, as well as in building optimized distribution networks.

The strategic necessity of climate negotiations

There is a paradoxical element to the climate struggle. As we move toward decarbonization, some renewable projects are having a highly detrimental impact on the environment, affecting precisely one of the other major global challenges: the recovery of biodiversity.

The Maestrazgo Cluster in Castellón, Spain, which envisages the installation of more than 125 wind turbines in Natura 2000 protected areas, is a clear example of this conflict. Local resistance, often framed as a NIMBY (not in my backyard) cause, is not only an aesthetic or territorial issue; it also houses deeper concerns about the preservation of unique ecosystems that could be lost forever.

As industries grapple with being competitive, the stakes are even higher for countries themselves. China and India are heading the technological race, so falling behind could lead to economic disaster. This is the main reason why figures like ExxonMobil CEO Darren Woods are encouraging Donald Trump to join the climate negotiations – not out of altruism, but as a strategic necessity.

The energy transition requires more than just investment in renewables; it also means designing a system that can combine efficient grids, streamlined processes, stable public policies, conservation efforts and the needs of local communities. Ignoring any of these elements will not only further delay the transition; it will also expose us to fresh environmental and social crises. There are no easy solutions to these complex problems.

The role of carbon-credit trading

We are still waiting for the magic “commitment number” – the figure that developed countries decide to allocate to developing nations to fund their climate transition.

Why is this so important? Because many of these countries lack the resources to implement renewable-energy projects and adapt their infrastructures to reduce climate change. However, this funding is not just a matter of charity. It is also a way to ensure that all countries, regardless of their resources, can contribute to the fight against climate change.

In this sense, Article 6.4 of the Paris Agreement represents a step toward a more orderly system by setting out a global framework for carbon-credit trading, under UN oversight. It aims to prevent double counting and fraud, as well as to restore confidence in a market that fell to $723 million in 2023 after multiple scandals.

Under this system, countries will be able to trade carbon credits produced by projects anywhere in the world, generating revenue to fund their own transitions. It replaces the former Clean Development Mechanism established under the Kyoto Protocol and seeks to establish clear rules to deter fraud and double emission counting.

Channelling the chaos of COP29

COP29 offers a clear lesson: tension and complexity are inherent to the climate challenge. Much like entropy itself, the energy transition is a constantly shifting system with opposing forces that need to be balanced.

Solving this puzzle demands more than just funds and technological breakthroughs. It requires bold leadership, international cooperation and the ability to navigate a system where tensions – decarbonization versus conservation, efficiency versus climate justice – have to be carefully managed and balanced.

Energy is the driving force behind this process, not only in the physical sense, but also in the political and social realms. The question is whether we can channel COP29’s chaos into a more sustainable and orderly future. Entropy may be a challenge, but it is also an opportunity, a reminder that there is room to build something extraordinary, even within disorder.

Isabela del Alcázar is the chief purpose and sustainability officer at IE University.

This story first appeared in The Conversation; it has been edited to conform with Corporate Knights style. Read the original article here.

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Both are mortal threats to humanity, but the coronavirus has the urgency of a bullet coming at our heads, whereas the climate crisis is a slower burn (albeit increasingly prone to blazing flare-ups).

With the coronavirus, time is compressed into minutes, hours, days and months. What we do today can determine if our families, neighbours and communities get deadly ill in the next 14 days. That temporally compressed line that connects our actions to their life-saving impacts has spurred governments around the globe to make the tough decision to lock down their economies and bring the engine of capitalism to a shuddering halt.

With the climate burn, the time scales are longer. If we throw water on the fire today, it could take decades or centuries before the flames are doused.

How to solve this riddle of time? For wisdom, I turned to my friend Nick Parker.

Nick is the prophet of “cleantech.” He coined the term in 2002 and helped catalyze an ecosystem that has since moved mountains of money ($150 billion of venture capital and private equity at last count) to develop cheap and sustainable solutions the world now appears ready to adopt.

Again today, Nick had an answer to the climate riddle. He said we can think about this in three phases.
The first 30 days was about saving our lives. The next 90 days is about keeping the economy on life support. The 900 days after that will be about building the society we want.

As we plan for the next 900 days, there will be no shortage of suggestions for how we can build back better, but it would be a disservice to the moment if we are not clear-eyed about what will drive the recovery. It will be people.

This virus has exposed the brittleness of our economic system, a system that has been downloading costs to the most vulnerable for too long. As we hunker down in our homes, we are sustained by essential workers, so many of whom are not even earning a living wage. In the starkness of our self-isolation we can now see that the people we need the most are often the ones we value the least.

As Mark Carney wrote recently in The Economist, “After decades of risk being downloaded onto individuals, the bill has arrived, and people do not know how to pay it.”

The social contract just came up for renewal, and those who have been getting short-changed are demanding a raise.
The people who have been rigging the game now recognize that the jig is up and are falling into line.

The Financial Times, flagship paper of the Davos class, signed off on the deal with an unsigned editorial this April: “Radical reforms – reversing the prevailing policy direction of the last four decades – will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities and look for ways to make labour markets less insecure. Redistribution will again be on the agenda, the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.”

People must be at the front of the line come stimulus time.

Fortunately, thanks in part to the clean innovation wave that Sir Parker’s ripples helped to generate, this could work out just fine for our climate.

If the objective of the economic recovery is to get as many people back to work as fast as possible and lay the foundations for a strong economy capable of digging us out of a debt hole, there may be no more effective strategy than applying a climate lens.

Putting a climate lens on economic stimulus sounds like a constraint or dilution of the primary mission. But rather than a constraint or diluent, it’s more akin to X-ray vision that will help us cut through the fog of old ways to hone in on the most effective investments that will get more people back to work faster while bolstering our long-term economic potential.

That’s because the clean economy is generally more labour-intensive (think retrofits) and has higher – more than double in most cases – compound annual growth rates as compared to the general economy.

This flies in the face of a still popular perception that carbon reduction policies are simply expensive. That might have been true 10 years ago when the cost of clean technologies was high. But since then the relentless march of technological progress has slashed clean technology costs, and they continue to fall.

As it becomes ever-cheaper to make and store clean energy; build smarter, more efficient buildings and industry; and electrify transport (even with oil at negative prices, electricity is still by far the cheaper way to move a car), demand for these products goes up, and those economies that invest accordingly rise to the top.

For these next 900 days, let’s take off the blinders of the past and put on a pair of climate X-ray goggles. They can help guide us through the pandemic portal to another world, one we can be proud to bequeath to our grandchildren.

Toby Heaps is the editor-in-chief and co-founder of Corporate Knights. This Editor’s Note appears in the Spring 2020 Issue of Corporate Knights.

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