Farewell and Good Riddance, 2020: Your Chaotic Legacy Will Live On. For Good or for Bad?
I can’t imagine there will be many people sad to see the back of 2020. But this may yet prove to be one of the most important and defining years in our lives. Its effects and impacts will live on and its long-term legacy is yet to be seen.
Time will tell.
Will this prove to be the year that final, mortal and irreparable wounds are inflicted on the western liberal democratic system of government, with its Covid-ravaged economies and the continued open assault on its institutions (most notably in the US, but by no means a standalone case)?
Or, in a sliding door moment of history, will 2020 prove to be a turning-point? Will it be the wake-up call the West needed to get a truly accurate view of itself and its current standing in the world, and will it consider why technocratic-style eastern governments have generally proved superior through this crisis? Will 2020 be the disruption the global order needed to enable a “building back green and better” opportunity, allowing industrial transformations to truly begin?
What just happened?
Whatever 2020 was, it was a shock to the system and it will surely have a lasting impact on each of us, in our relationships to loved ones, in our assessment of risk and relevance and in our attitudes towards the Climate Crisis. The question is how deeply the impact is felt and how long it endures.
As we approached the 2020s a year ago, I called it out as the most significant decade of our lifetimes, given the implications and irreversibility of failing to get on a sustainable climate path by 2030. We designed our Cleantech Forum around that idea and titled it Welcome to the Chaos of the 2020s: Urgent Actions, Unusual Strategies, Unexpected Allies, ahead of which (on 30 August 2019, to be precise), we declared: “We do not foresee business as usual, we foresee an abnormal and chaotic next decade ahead”.
A year on from the first Wuhan cases, we still hold the same view, albeit with three significant differences:
- We have now had, for the first time since the 2015 Paris Accord, a year when the ever-upward trend in global carbon emissions has been broken, albeit forced upon us by nature (as opposed to self-imposed). According to work from leading global climate scientists, the first half of 2020 saw a 8% year-on-year decrease in global CO2emissions (−1551 Mt CO2), an unprecedented decline in carbon dioxide emissions, larger than during the 2008 financial crisis, the 1979 oil crisis and even World War II.
- We just “blew” up to $16tn globally to fight the pandemic, roughly 500 times as costly as what it would have taken to invest in proposed preventive measures.
- We now have one year less to halve emissions by 2030.
So much doom and gloom, so much personal pain, but the legacy of 2020 may yet prove to a be positive in the long run if we can learn its lessons. And the chaos may have buried some of the better news items, their significance may only be appreciated in time, if and when their objectives get achieved.
Without the backdrop of the coronavirus chaos, would the US electorate have rejected its first sitting president since 1988, paving the way for the US to return to the Paris accord, all just in the nick of time (at a very interesting moment with Japan, China and Europe having all recently increased their commitments to net zero)?
Without the Covid-19 test case showing us how Mother Nature can render our species small and powerless, would the global populace be as tuned into systemic life-threatening risks as it is right now? Would a book and a movement calling for the global governance of the biosphere even get an airing?
Arguably, the momentum was already there, but 2020 was a standout year for stronger and larger numbers of corporate announcements and commitments to fight climate change, including these selective shout-outs:
- To Big Tech, which Microsoft kicked off in early 2020 with its pledges to shift to 100% renewable energy supply by 2025 and to be carbon negative by 2030, followed later in the year by Apple’s 2030 carbon neutrality commitment, Google’s no more offsetting pledge and the weaker Facebook announcement
- To BP and its February pledge to be at net zero by 2050, setting a trend off across the European energy majors, ENI, Shell and Total (note: Repsol went there first, in Dec 2019).
- To Bayer, Cargill, Fedex and General Mills, for their commitments toward Regenerative Agriculture and Nature-based Solutions (in the case of Unilever’s new EUR 1 billion Climate and Nature Fund). A path towards a new asset class looks like it is now being pioneered.
- To Amazon for the Climate Pledge fund(“initially” $2 billion), and to Delta Airlines for committing $1 billion to become “the world’s first carbon neutral airline”
And, despite the pandemic, capital has continued to flow towards solution providers, our heroes in the story….
- For venture and growth investment rounds into cleantech innovation companies, 2020 will come in lower than 2019 but will still be in excess of $30 billion (the third year in a row this level has been exceeded) and Agriculture & Food will have taken over from next gen mobility and logistics as the biggest single category within our broad cleantech innovation theme.
- The special purpose acquisition company (SPAC) in US cleantech has taken off in 2020 – with 15 announcements to date, three listings completed (the latest being Quantumscape, the first battery manufacturer to go public for 10 years); more SPACS are still being formed and priced (last week, Spring Valley, for example).
Yes, there are some potential dangers to this SPAC trend, but it is also indicative of the appetite out there for assets which are 100% all in on the industrial transitions and mega-trends like electrification. Connect this to the gradual -if slower and more tentative than we would like- mobilisation of institutional investors (for example, Climate Action 100+’s 545 investor signatories representing in excess of $50 trillion in assets) towards taking action on big polluters and their “unpriced” negative impacts on the environment and local communities, and you start to see the potential for transformational change.
2020 may yet prove to be the year which created the conditions that brought us together and got us focused on achieving true transformations at scale and at pace. We cannot just hope so. We have to make it so.