The chairman of the Energy Transitions Commission has highlighted the role both companies and governments can play when it comes to reducing emissions, emphasizing the importance of the upcoming COP26 summit on climate change.
In a wide-ranging interview with CNBC’s “Squawk Box Europe” at the end of last week, Adair Turner was asked if meaningful action was actually taking place when it comes to corporate announcements related to ESG — a term which stands for environmental, social and governance — or if these lacked substance.
“A lot of meaningful action is taking place,” Turner said. “The problem is that it’s five to ten years later than it should have occurred – but it’s still good news.”
He went on to note that companies and countries across the world were “now making clear commitments and taking clear actions” to cut their emissions.
“Almost everybody has now agreed that we’ve got to get the global economy to about zero emissions by 2050,” Turner, who chaired the U.K.’s Financial Services Authority between 2008 and 2013, said.
“The other bit of good news is that the technologies to do that — the technologies of renewables, of batteries, of electrolyzing hydrogen — have ended up being far cheaper and easier to apply than we dared hope 10 years ago,” he said.
According to the foreword of a recent report from the International Renewable Energy Agency, the cost of electricity from utility scale solar photovoltaics dropped by 85% in the period 2010 to 2020. For onshore wind, costs fell by 56%, while offshore wind saw a decline of 48%.
The report from IRENA also states that, in the U.S., the price of utility scale battery storage decreased by 71% between 2015 and 2018.
The production of hydrogen using renewables and electrolysis — sometimes called ‘green’ hydrogen — remains expensive, but efforts are also being made to lower costs.
In June, the U.S. Department of Energy launched its Energy Earthshots Initiative and said the first of these would focus on cutting the cost of “clean” hydrogen to $1 per kilogram (2.2 lbs) in a decade. According to the DOE, hydrogen from renewables is priced at around $5 a kilogram today.
Looking at the bigger picture, Turner acknowledged that while the technologies were there and a lot of companies were taking action, even stronger commitments would be needed at COP26, which will be held in the Scottish city of Glasgow from October 31 to November 12.
“In particular, we now need to focus not just on how do we get to zero emissions by 2050, but how do we get really serious emission reductions in methane as well as CO2 — I want to stress that point — in the 2020s,” he said. “We’ve really got to get the action in place now.”
A lot is riding on COP26, which was due to take place last year but postponed because of the coronavirus pandemic. The U.K.’s official website for the summit says it will “bring parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.”