Shift to the right could slow down climate action, but not reverse it

By Simon Jessop, Susanna Twidale and Virginia Furness

LONDON (Reuters) – A political shift to the right in Europe and a possible Trump presidency in the United States will not derail climate efforts as companies increasingly focus on green strategies, delegates at London Climate Action Week learned.

In a key election year around the world, right-wing and populist parties have returned to power or gained ground in the European Union, India, Indonesia and Argentina, and may also do so in France, which has elections this weekend. This shift is being offset to some extent by gains made by left-wing parties in Mexico and, as expected, in the UK next week.

The biggest shock to the USA will come with the election in November. Although national polls have shown a neck-and-neck race, President Joe Biden is behind Republican candidate Donald Trump in most of the swing states that traditionally decide the presidential election.

During his previous term, Trump had led the world’s largest economy out of an agreement to combat global warming.

But for the 45,000 delegates who attended the capital’s largest annual climate event in London this week, the message was clear: Even without the support of the US government, the real economy will continue its path toward decarbonization.

“Could a change in the presidency stop the progress that is currently being made? The answer is no. Could it hinder it and cause it to move more slowly than it is now, the answer is yes,” former US special envoy for climate issues John Kerry told Reuters.

“The bottom line is that CEOs around the world understand that avoiding climate responsibility is not a good business plan… their products, the costs of their supply chains, everything will be affected.”

Nearly 6,000 of the world’s largest companies told nonprofit disclosure platform CDP that they had a plan in place to limit global warming to 1.5 degrees Celsius (2.7 Fahrenheit) above the pre-industrial average, the level at which scientists believe the most devastating consequences can be avoided.

SETBACK

In the US and elsewhere, there has been a backlash against environmental, social and governance investments as inflation and the cost of living have brought the focus back to short-term profits, prompting some companies to shift their strategy away from renewable energy.

In addition, the EU’s climate policy ambitions have been watered down even before this month’s European Parliament elections, and companies pushing their climate targets are increasingly reluctant to make them public for fear of criticism.

Former Italian Prime Minister Mario Draghi said politicians must engage with voters who may be disillusioned.

“It is as important as making progress,” he told delegates at the London conference.

Trump has won support in some parts of the U.S. with comments downplaying the risks of climate change, but billionaire philanthropist Bill Gates expressed cautious optimism that Trump, if re-elected, would not repeal President Joe Biden’s signature climate policy, the Inflation Reduction Act.

Gates told reporters he believed “much of what happened with the IRA would remain the same” because it would require a consensus in Congress to eliminate the tax credits and because Republican states had benefited from them.

Kerry’s successor, John Podesta, told delegates that the tax breaks that had boosted the US green economy were structured to provide certainty for companies for 10 years, thus leading to lasting change.

Companies seeking to adopt greener technologies believe that such a regulatory structure is crucial to overcoming the problems that can initially hamper innovation.

In general, companies in the US and other industrialised countries have increased their production of green electricity, including from solar and wind power, as the costs of both energy sources have fallen. This has helped to displace climate-damaging fossil fuels.

Although politics will influence the pace of change, “we will not see a reversal,” said Selwin Hart, climate adviser to the UN Secretary-General. “Who in the industrialized countries would still invest in coal? It is no longer cost-competitive.”

(Additional reporting by Gloria Dickie and Valerie Volcovici; editing by Barbara Lewis)