Davos Elite See Trump Among Hurdles for Green Growth in 2024

Bloomberg

Expectations of more extreme-weather events, alongside the possibility of Donald Trump’s election as US president, set the tone for discussions on tackling climate change at the World Economic Forum in Davos, Switzerland.

The outcome at COP28 in Dubai in December, where all countries agreed to transition away from fossil fuels, should have provided a positive outlook for the rich and powerful to discuss the prospects of reducing greenhouse-gas emissions. Yet, potential leadership changes in big economies, including the US, Mexico and Indonesia, made corporate bosses wary they may be losing crucial policy support for doubling down on the energy transition.

“2024 will be an unusually consequential year for climate action,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University. “By the end of the year, with another COP concluding in a petrostate and the results of many national elections, we’ll have a sense of whether climate cooperation is breaking down or not.”

That fear is compounded by the recent election of leaders skeptical of action against global warming in the Netherlands and Argentina, and even backsliding in previously climate-forward countries such as the UK. And even though COP28 was hailed as historic, petrostates such as Saudi Arabia have been attempting to walk back on the list of ambitious steps they signed up to.

This is likely to create divisions between countries at the next two climate summits in Azerbaijan in November and Brazil next year. In an interview at Davos, Brazil’s Environment Minister Marina Silva pushed back on the Saudi suggestions, stating that the goals were based on solid science and are “not a matter of interpretation.”

There are some hopeful signs. Despite the challenges in 2023, the world spent a record $1.7 trillion on clean energy. This is more than the $1.1 trillion that was invested in fossil fuels. A massive deployment of solar and electric cars in China accounted for a large portion of that spend, and it seems China is committed at building at a huge scale.

Early stage climate technologies suffered a decline in venture capital of about 30% in 2023, according to Climate Tech VC, but the numbers aren’t as bad as they seem. Hans Kobler, founder of Energy Impact Partners, says investments in 2021 and 2022 had created too much hype in new climate technologies. “When things are good, people get too excited. When things are bad, people get too depressed,” said Kobler. “We are back to reality.”

There are other shiny, new things to get excited about this year. At Davos there were plenty of conversations around Swiss-army-knife-like climate solutions that have benefits beyond just reducing greenhouse gases. Restoring land can increase agricultural yield and sequester carbon. Deploying policies to limit aging cars in cities can reduce fossil-fuel consumption and reduce air pollution.

“It’s these kinds of stories of multiple benefits that will help support the solutions in the long run,” said Jenny Davis-Peccoud, founder of the sustainability practice at Bain & Company.