Ethny Childs
October 2021

STAGES on the road to COP26: Economy wrap-up

In the run-up to COP26, the IES has been hosting a number of discussions and events exploring six key themes in our STAGES on the road to COP26

We have just wrapped up the latest theme: Economy. For this penultimate stage we have been looking into questions of economic transformation, green finance, and our ability to create ‘just transitions’ towards net zero.

We explored this topic through two panel discussion and an expert working group meeting. You can catch up on the recordings from the panel discussions below: 

The role of business

The first panel event shared insights from business, media and policy, asking whether businesses, jobs, and ESG (environmental, social, and corporate governance) can play a role in the climate transition. In particular, the event took a look at corporate sustainability, just transition, and the role of businesses in the climate agenda.

The overriding messages from the discussion highlighted the need for governments to provide top-down incentives for businesses to transition, including the urgent need for the translation of high level commitments to plans of action on the ground. Governments should also engage with the most carbon-intensive sectors to support their transition through plans and deals, as these are the most urgent sectors that need to decarbonise in order for us to meet climate ambitions. Inevitably policy processes can be slow, so first-movers in business are important to drive ambition within the economy. Cities and regions can also prove more agile in this space, by committing to more ambitious action, which ultimately affects the businesses within their remit. However, first-movers in this area are the exception rather than the rule, and government support to push forward ambitions across sectors is vital.

Positive competition within and between sectors is a key determinate of driving action, and is driven by change in the risk-opportunity landscape; a change in the perception of risk in terms of decarbonisation is what has driven the growth of ESG. It is therefore imperative that the government works to highlight the opportunities that exists within the transition. A key part of this will be highlighting the opportunities in terms of competitive advantage to decarbonising rapidly. By building knowledge clusters, supply lines and skills relevant to the transition, UK business will have a competitive advantage with other countries, whilst investing in domestic supply chains and reskilling/upskilling initiatives will support a just transition. 

The blue economy

A sustainable blue economy will be an essential part of meeting a number of Sustainable Development Goals. The oceans provide an estimated 3 billion people with their primary source of protein, 80% of all life on the planet comes from the ocean, goods, services and economic activities from the ocean are equivalent to the 7th largest global economy by GDP and it represents the largest natural carbon sink. The concept of blue economy aims to bring together economic activities for any ocean-linked sector, highlighting that sustainability cannot be separate from growth but is a condition for both. 

Discussion touched on the importance of distinguishing transition from transformation, with transformation representing simultaneous cross-sectoral change that moves beyong 'business as usual'. Transition in the other hand, refers to a temporary state of moving towards these transformative changes, often referring to a specific sector. The importance of a just transition was raised, given the disproportionate effects of climate change. Moreover, the knowledge that indigenous communities and small island states have is extremely valuable, especially in terms of ocean knowledge. The blue economy needs to recognise this raft of knowledge, and ensure that opportunities within the blue economy are distributed to the people that need it most. 

The importance of improving ocean literacy, a key topic within the UN Decade of Ocean Science, was also raised. This is in terms of the public, but also across businesses and governments.This should focus on helping stakeholders understand the impacts of their behaviours on the ocean. An area of particular importance at the moment is mining in the deep-sea for minerals needed for electric vehicles and batteries. 

The ocean is full of solutions. But in order for these solutions to be realised, and for a truly sustainable blue economy, we need to make sure that we are using a common language and share knowledge to protect our oceans, for people and planet. 

The circular economy

Finally, we held a discussion meeting where experts explored the topic of the circular economy and its role in supporting climate ambitions.  Although the circular economy is not one of the themes for COP26’s programme of negotiations, the
concepts it represents will be crucial to achieving our aspirations for tackling climate change.