Climate change dominated discussions at the World Economic Forum in Davos
27 January 2020 | Adaptation
Climate change dominated discussions at the World Economic Forum in Davos, but this year’s sunny edition was dry on the consensus required to drive the global economy towards a greener future.
“The signal has emerged.” That signal James Hansen spoke about in the summer of 1988 was the hottest June ever recorded at the time in the US. It was during the same month that he declared before the Senate, in a historic hearing, that climate change was real and humankind was causing it.
Since then, signals never stopped emerging, as the world witnessed over the past months with the wildfires sweeping the Amazon and Australia, or the floods submerging parts of Italy and Indonesia.
In Davos, where the World Economic Forum concluded last Friday (24 January), climate change crept into every panel discussion, absorbing the attention required by other hot priorities, including growing inequalities, the structural problems of the world economy and the risk of a recession, the crisis of the multilateral system, the ongoing trade war, or global pandemics.
“In past years there was a theme emerging, either the risk of a recession or the failures of globalisation and capitalism. But this year there is no clear narrative, beyond the climate issue,” summarised one of the attendees during an informal conversation in the ski resort’s congress centre.
The Forum did bring some results, but they were more patches than real solutions.
France and the US agreed to a truce in their dispute over the French digital tax, and Washington dropped its insistence about only accepting a voluntary ‘Google tax’, one of the main obstacles to achieving the OECD-led global agreement on a digital tax.
But as OECD Secretary General Angel Gurría warned, “a lot of political will and a great spirit of compromise” are still needed to conclude a deal in the new round of negotiations starting this week.
The EU added 16 WTO members to its ad-hoc mechanism to solve trade disputes, including China. But the renewal of the WTO’s appellate body is still pending.
Regarding climate, the only achievement was the prominent role the topic occupied during the debates.
But in spite of good words, the private sector doesn’t seem to know how to deal with the climate challenge or grasp its opportunities, besides the commitments made by a few companies.
For the first time in its 15 editions, the Forum’s Global Risks report found that the top five challenges were environmental or climate-related. But according to a survey conducted by PwC, global warming is not among the top 10 risks for global CEOs, while only 25% of them believe that they could seize the opportunities brought by climate action.
True, the green tone of the conversation gave Europe a good opportunity to shine on stage. The heads of EU institutions and European governments outlined their Green Deal to achieve “climate neutrality” by the middle of this century.
The European Investment Bank will play a critical role in this effort, as it plans to unlock €1 trillion in climate-related investments by 2030.
“It seems that a change of attitude in the business and financial world is emerging,” said Emma Navarro, the EIB’s vice-president, in charge of the green agenda. “There is a growing awareness that they also have to be part of the response to this great challenge,”.
But she added that “there is still much to be done and the complexity of the challenge cannot be minimised, so it will be important that real progress is achieved in the next climate meetings.”.
This year ahead, and the new decade unfolding, will likely be more unstable and uncertain; with increasing domestic polarisation and weakening transnational cooperation. These are difficult times for the globalisation and do-good entrepreneurs whom the “Davos spirt” is supposed to encourage. But nevertheless the zeitgeist of an era in which the cooperation and solidarity between generations, among countries and within nations continues to run low.