Later this month about 25,000 people are headed to Glasgow for the 26th annual United Nations Framework Convention on Climate Change (UNFCCC), known as COP26. The UK, this year’s host of the Conference of the Parties, has asked participants to submit more ambitious targets for emissions reductions by 2030 in order to enable the possibility of achieving global net-zero emissions by mid-century. Conference leaders have also asked for increased monetary contribution to climate adaptation and mitigation funds, and have the stated goal of finalizing the regulatory framework for implementing and enforcing the pledges made in the 2015 Paris agreement.
At the same time that the world ramps up for the latest and most robust global climate meeting, an energy crisis is unfolding in Europe and Asia which could set the world back in terms of carbon emissions, and which showcases just how difficult the road to decarbonization will be. As global economies have surged back to life in the post-pandemic era, demand for consumer goods and services has skyrocketed. While consumers have largely bounced back to business as usual, however, supply chains have not been able to keep up.
In the energy sector, supply has simply been unable to keep up with demand, causing an energy crunch and severe price spikes in the European Union, China, and India, leading to massive disruptions of supply chains and industries around the globe. In Europe, the EU is trying to walk a tightrope act between getting enough natural gas from Moscow to stay afloat without seriously compromising their energy security and giving the Kremlin too much geopolitical power. India is seriously at risk of running out of coal, which accounts for 70% of the national energy mix. In China, many energy companies have simply stopped producing, as coal prices have skyrocketed but national price caps prevent energy companies from raising electricity prices accordingly, forcing them to either run at a deficit or shut down entirely…read more.