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Analysis | Climate Progress Is Happening, Just Not Fast Enough

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This year’s United Nations climate conference in Sharm El-Sheikh, Egypt — COP27, the latest in a series dating back to 1995 — achieved two important victories.

First, there was a hard-won agreement to start compensating poorer countries for harm due to years’ worth of greenhouse gases emitted by the rich world, which the US had long resisted. The ethics of the “loss and damage” question were never in dispute. Rich countries have already emitted almost all the carbon the atmosphere can stand if climate change is to be arrested. They owe poorer countries generous help in coping with the consequences. But it’s crucial that new resources are channeled in ways that help cut future emissions.

The principle of disproportionate responsibility recognized at COP27 can and should guide rich-country governments in broadening their approaches to the problem — for example, through the role of multilateral development banks in supporting climate-related investments.

While many COP27 observers praised the agreement, others focused on nations’ failure to pledge faster action to limit warming. It would’ve been better to do more, of course, since the world is still on course for devastating levels of warming. But the deal is important progress — and suggests that the kind of coordinated action needed to forestall the worst climate-change scenarios should still be possible.

The second victory at COP27 was not a formal agreement among nations, but rather a growing acceptance by them of a crucial idea — that the battle against climate change cannot be won without a much more robust mobilization of private capital — and a growing willingness to act on it.

As the meeting was underway, a group of countries led by the US and Japan announced a $20 billion financing package to support Indonesia’s plan to shift from coal to renewables. This was a breakthrough agreement, not only because it is one of the largest climate finance packages ever assembled, but because it is in partnership with a nation that holds vast coal deposits and generates 60% of its power from coal.

The agreement would not have happened without the leadership of Indonesia and the G-7 nations, along with Mark Carney and Mary Schapiro of the Glasgow Financial Alliance for Net Zero, a group Carney and I co-chair that includes many of the world’s largest financial firms and asset managers. And it creates a model for assisting other nations that are heavily dependent on coal to transition to clean energy — a transition that will not happen via government actions alone.

At COP27, Bloomberg and Bloomberg Philanthropies announced various efforts to increase private-sector investment in clean energy, particularly in the developing world. That includes a new data portal that will give companies the information they need to meet their net-zero pledges — and give the public the information it needs to hold them accountable for doing so.

Many countries have pledged to achieve net-zero emissions of carbon dioxide by 2050. If all governments committed to it and kept their promises, the goal adopted in Paris in 2015 of limiting future warming to 1.5% would be within reach. But many big emitters still aren’t on board, and the ones that have made net-zero pledges still aren’t fully aligning policies with promises. Changing that can only happen by enlisting the private sector, a mission that was hardly on the agenda in Paris in 2015 but is now emerging front and center.

At COP27, governments were urged “to revisit and strengthen the 2030 targets in their national climate plans by the end of 2023, as well as accelerate efforts to phase down unabated coal power and phase out inefficient fossil-fuel subsidies.” That’s critical, but actions are what matter, not words — and actions still fall short.

The world must invest more ambitiously in renewables and other technologies, phase out fossil fuels more quickly, and improve coordination of such efforts by pricing carbon emissions to reflect environmental harms. There’s no alternative to tirelessly pressing the case for such steps, and enlisting the private sector as an ally in doing so.

An energy transition as dramatic as the one that global warming dictates is a vast undertaking. It can’t be done all at once, and it demands cooperation among all the world’s governments — and the private sector, too. COP27 shows that progress is possible.

Investment in the planet’s future is happening. With more investment — much more — climate catastrophe can still be avoided.

Michael R. Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News, UN Special Envoy on Climate Ambition and Solutions, and chair of the Defense Innovation Board.

More stories like this are available on bloomberg.com/opinion

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