Jane: [00:00:00] Hello and welcome to the LSEG Sustainable Growth podcast, where we talk to leading experts about sustainability and finance. I'm Jane Goodland and this week we're talking to Nick Mabey who's the founder and CEO of independent climate change think tank E3G. Earlier in his career, Nick served as a senior adviser in the Prime Minister's Strategy Unit and was the chief economist at WWF, and in recognition of his services to tackling climate change, he was made an OBE in 2022. Personally, I'm delighted that Nick was able to join us because he is the font of all knowledge when it comes to the Cop process, which can be quite difficult to fully grasp at times. So hopefully our conversation will help unpick what happened at COP29 in Azerbaijan this year. But before we hear from Nick, a quick reminder to follow us so you don't miss any future episodes. And also, don't forget to rate us on Spotify, Apple Podcasts, or any other platform you use to enjoy the show. Hi Nick, thanks so much for joining us on the Lseg Sustainable Growth podcast, particularly as I understand you're not long off the plane from Baku where you were up close and personal with the COP29 negotiations.
Nick: [00:01:10] Well, great to be with you. And yeah, thanks for having me on.
Jane: [00:01:12] So you founded E3G back in 2006, but you've been at the heart of climate change work for the last three decades. I'm really curious to know what was the path that you intended to take? Was this always what you wanted to do? And what's been your motivation all the way along?
Nick: [00:01:30] It was definitely not a job I was told about at school what I expected to be doing was being an engineer in the energy industry, I wanted to build windmills.
Jane: [00:01:39] Ah okay.
Nick: [00:01:40] Particularly in developing countries. And that's why I started my career as an engineer in the power sector. But I've quickly found out, and this was the end of the 80s, that no one wanted to build windmills in the UK. And that wasn't because you couldn't build them. The Danes were building lots of them, but because the economists and the policy makers said they didn't want them. So slightly out of frustration. I ended up moving out of industry into academia. Training as an economist and as a policymaker in different universities to try and work out why. Basically, I wasn't allowed to do the job I wanted to do. And after, you know, in a sense, working on that for a while and realising that in academia was a bit too abstract, that's why I leapt into working at WWF as chief economist. I went to my first cop in Kyoto in 1997. And really, from then point on, I went to the Foreign Office to help them build a climate diplomacy outfit. And then the Prime Minister's office, where I worked on a range of issues from climate to conflict to fisheries. In a sense, becoming an engineer of policy and diplomacy rather than an engineer of large bits of steel and cement. Which I may actually be better at doing than I was at being an engineer. But that was my pathway. Still trying to do the same thing, trying to kind of make what's necessary for the environment and for people possible in the real world. And that's why we found that E3G. When I left government as well to kind of carry on that work both in the UK but also now in 12 countries globally.
Jane: [00:03:00 ] That's super cool. And I definitely sympathise with that whole kind of, you know, the job you do now wasn't on the kind of careers chat because mine certainly wasn't either. You know, the whole notion of sustainability just wasn't even part of the conversation then. But I love the fact that your whole career really started from a desire to build windmills. That's just so lovely. But I think probably good that you actually did end up taking your path to trying to work out how to change the system, actually, because that's really what we're here to talk about today, which is the cop process in particular, which actually can be quite impenetrable to those who aren't kind of up close and personal with it and living and breathing it. So I was wondering perhaps before we get into some of the detail of what's happened this year, could you give us an overview of the Cop process itself and where we kind of sit in it right now?
Nick: [00:03:51] Yeah, I mean, like most things in the world, and fundamentally it's quite simple, but it can get very confusing when you look, as you say, at the detail. So I mean, climate change is a global issue. Everybody affects everybody else. And the cops and the UN processes where we have the conversation about how we're all going to act together. It's that simple. And basically we've been running this since 1992, and it has kind of several core functions of what we need to do. So the first thing is the Cop is where we have agreed what a safe level of climate change is one and a half degrees. That changes with the science. But it's basically it's where we agree how much we've got to do to get to kind of no impact on the planet, on the climate system by around mid-century. That's so we all agree to that. And then we also have to agree how countries are going to help each other because countries come from different backgrounds, they have different responsibility. So the kind of social contract of climate change, you know, how much finance are we going to give countries to both implement their commitments but also manage the impacts of climate change they weren't responsible for? And then overarching all of that a transparency system.
Nick: [00:04:53] So we can all see what everybody's doing. So again, it's very simple in a way. It's basically we all agree what to do. And we all make sure everybody else is doing it so everybody can feel they're not being cheated on by anybody. And essentially the conference of the parties COP is where we have every year a discussion about how we're doing against the goals we've set each other and agreed and how we talk to the public. It's the biggest media moment of the year by around five times on climate compared to anything else. So it's the moment in the year the world pays attention and leaders pay attention. So it's incredibly important. And it's also a place where we come together and drive collaboration on action. So in that sense, if we don't have cops, if we don't have a space where we have this conversation, nothing else we do on energy and finance and all the practical things have no place to tie together to say, yeah, that's all great, what we've done, but is it actually meeting the environmental and climate system parameters of what's needed? Because Cop is never going to do everything because the world's a big, complicated place. But it's a place we check we're doing enough to keep everybody safe.
Jane: [00:05:55] I think the one thing that strikes me about it, it's a really unusual process, because while it's principally about kind of policy makers coming together to do the actual negotiations, like you said, it's a great point in time to bring other sectors involved as well, isn't it? In terms of you have you have the private sector there in force? You have you have representations from impacted community groups. So it's a real blend of different actors, isn't it, in terms of the broad spectrum of kind of those impacted and affecting climate change.
Nick: [00:06:24] Yeah. And that does differentiate it from other, you know, so you go to an arms control conference or you go to a trade meeting. You'll have people outside, but nothing like this because, you know, the decision to not build nuclear weapons or the decision to lower a tariff is just made by government. They can make the decision to change your whole society, industry, economy and agriculture in line with climate change requires a whole of society to do it. So in a sense, Cop reflects that. And particularly I like the thing you said, which is it has the most impact. And that's why, you know, there was a call just to do this with the big polluters in the room. George Bush said, let's have a big polluters meeting to solve climate change. And actually it was the UK and the EU who said no, the vulnerable countries need to be in the room because if the big polluters decide what's safe is safe, they're going to come up with a very different answer to the most vulnerable. And so that is one of the really powerful things about Cop, that it brings together those most impacted, both governments and non-governments, to have their voice in the room. And I can tell you that really affects what meeting, what agreements we get. We generally get more out of the cop than the real politic diplomat inside me would estimate. And we do scenarios before each meeting. And it's that kind of magic of, to be honest, the emotion and the passion that comes around cops, that kind of pushes them beyond the norm. And I think if you look at the last 20 years, the one multilateral process made real progress is climate, whereas trade and other areas have been completely stagnant. And that has a lot to do with what some call the circus around the formal diplomacy. But actually it's kind of the secret sauce that makes cops work. They look a bit chaotic, but they do work, which not many other things do in the world at the moment.
Jane: [00:08:02] Yeah. And I think that emotion definitely comes through in terms of some of the clips that I've seen, just actually on the kind of the mainstream news about kind of certainly some of the representations from some of the more impacted countries. You can really see that emotion coming through. And I think that is really important in that kind of policy development. So let's go a bit into this year's cop. So it was held in Azerbaijan, in Baku. I believe you were there. So you are well placed to talk to us about what happened, but let's talk about first, what was it trying to achieve? What were the big things on the table this year?
Nick: [00:08:38] Yeah. So Baku is kind of a link in a chain because we have this process happens every year in a pattern. So in Paris in 2015, the world agreed a process where every five years, every country would have to increase its target towards our collective goal. And the next set of targets have to be made in 2025. So in Dubai last year, we had something called the global stocktake that basically said, okay, how are we doing? How much have we done? How is the science worse or better than we thought? It's worse. So what's the gap between what we're doing and what we need to do? And that kind of set forward a set of gaps more renewable energy, more energy efficiency needed, less fossil fuels, more finance. And Baku's job in the middle of that was to take that outcome, give some momentum into target setting for next year. In 2025, when countries had to put their 2035 targets forward. But critically, to agree a finance goal, a new finance goal of how much money would be coming to help developing countries deliver their targets for reducing emissions, but and critically, to protecting against climate change. So those were the kind of three things on the agenda this year. One is mitigation momentum, two, a new finance goal and three, a signal into the broader finance system. So the IMF, the world Bank, etc., on what they would need to do to deliver finance. Again, it's not just going to grants, it's about changing the whole way we fund infrastructure, energy, agriculture, it requires a whole range of different things outside the UNF, triple C, those were the three things Baku was trying to do this year mitigation, a new finance goal and a forward finance roadmap to really set up next year with a sense of ambition and kind of delivery process. So that next year when we go to Belgium we could again, we could have taken the next step towards 1.5 degrees and kind of a safe planet.
Jane: [00:10:31] And we've already started seeing some of those national targets being kind of publicised, aren't we , in terms of I know the UK's done theirs, but there's other countries as well. So it's all kind of a live process isn't it? Can we talk about the geopolitical element of the cop Process. And we can't kind of ignore the change of the administration in the US in all of this, but also just thinking more broadly about kind of the role of geopolitics in the cop process and how important or not it is. Maybe some reflections about that would be helpful.
Nick: [00:11:04] Yeah. So it used to be that climate was completely outside geopolitics, depending on how the geopolitics were, you know, climate would be easier or harder to deal with. So we're kind of a taker of geopolitics, but really since around 2015, climate is now in the geopolitical mix. It's very much a part of people's economies. It's a part of how countries relate to each other whether they trust each other. And that was very reflective this year. So obviously Trump was very much present in the halls in Baku. It was a big pressure on people to have a, have an agreement before the new administration came into office that was seen. It also empowered Saudi Arabia, for example, played a very negative game on fossil fuels. And I think that would have been toned down if they hadn't been a Trump administration. On the other hand, China was very keen to show it was a supporter of multilateralism and was very keen to kind of show its bona fides with developing countries, again, kind of playing off the US. So those issues of positioning oneself or taking advantage of a gap in, say, the US being at such a forceful player in the negotiations very much show in the halls of, of climate change.
Nick: [00:12:10] And I think it's one of the big open questions going forward is how much countries will value climate cooperation in their big picture. So, for example, the US will want to work with Pacific Islands because they doesn't want them aligning with China, while Pacific islands want is climate adaptation and work on that. How has the Trump administration going to deal with countries it wants to be allies. Climate change is like their number one issue for national security and prosperity when they're claiming not to care about climate, because on a pure geopolitical basis, they've got to cooperate. So those are the type of things that are now kind of very much live in the conversation, which weren't, you know, ten years ago. This was just not a conversation. Climate was climate and geopolitics was geopolitics. Now they are very much intermingled and increasingly becoming entangled for good or ill. Sometimes it drives more action, sometimes it retards action. It's just one of those things.
Jane: [00:13:04] And also I think in sort of contextualising this all in terms of the time that we have available, because I suppose one of the impacts of the whole thing getting more political is that it could slow progress down. And it's exactly this point and in our kind of forward looking agenda, that we don't really have that time available to slow down, do we?
Nick: [00:13:24] Yeah. And I think this is where you get the kind of double edged sword and the negative side, you know, the geopolitical tensions mean leaders have a lot less bandwidth. So getting leaders to focus energy on the things we need to do for climate is much, much harder than it was before. They've got Ukraine, Gaza, trade issues. That's a real issue. If Trump really put on his tariffs, it would massively shock to the global economy that would affect global clean investment, even if it wasn't so much in affecting US investment, which the federal government can't do much about. It will affect global investment. On the other hand, we're seeing competition between major powers like Europe and China lead to a kind of a race to invest in other countries, in clean economies and things like the European Global Gateway, which is an investment fund for funding critical minerals, hydrogen, renewables in other countries. A big deal was done with Africa at Baku by the European Commission. That's essentially a geopolitical tool. That probably wouldn't have happened if it was just for climate. So the two forces are going to struggle against each other, less noticed by leaders, but much more intense competition for relationships and economic opportunities than perhaps we saw before. Whether that makes it easier or harder to meet the timescales we have, who knows? The one the people who will suffer, to be honest, are the poorest and the most vulnerable because what it is happening is money is moving away from supporting, say, Africa and adaptation to go to work with, you know, more geopolitically important countries. So as often in these areas, when you get kind of power competition, it's the poorest who suffer because they get neglected, because they're not in that fight. And so that's what worries us, is the kind of lack of attention for protecting the poorest people and the most vulnerable people on the planet, because they're not part of the geopolitical game.
Jane: [00:15:06] And of course, some of that relates back to the finance piece, right? Doesn't it? In terms of how much finance is going to flow to those most impacted countries. So tell us about what was actually agreed at Baku, including that finance package.
Nick: [00:15:19] Yeah. So we got an agreement at Baku. It was quite late. It was one of the more fraught and difficult negotiations. I've been involved with the cop. There was a real chance it would have collapsed. And I think, you know, the tension of Trump's election was one of the things that kept us in. People had to make some really tough compromises. And that's reflected in the overall package of the outcome. So just starting, you know, mitigation we wanted to have moving beyond the agreement last year to phase out fossil fuels and a real push forward. That didn't happen. The Saudis were incredibly blocking, working with the Russians and others. And in fact, they watered down the text so much that some of the major groups, including Europe and the small islands, just objected to it. And it's now been pushed to next year. So people thought they had an agreement, but it's not an agreement because it was sort of two weeks. So that's actually probably a good thing overall. Not a good thing, but a good thing we didn't agree on something that rolled us back from last year because the Saudis were taking advantage of this moment. On finance, we did get an outcome a commitment to a new goal of $300 billion a year by 2035, moving on from the 100 billion which developed countries committed to. There's also inside that there's a commitment to ramp up funding on adaptation, perhaps not as much as we would have liked. And give look at getting more money to the small island states and the poorest countries who don't get a very large proportion of any of this climate finance.
Nick: [00:16:40] So a bit more equity. The 300 is probably at the lower end of what people wanted. It certainly wasn't anywhere near what developing countries wanted. But I think the interesting thing inside that and that wasn't that unusual given the pressure on budgets at home, given that, you know, US is going to pull out their financing. The pressure on the lower number was always going to be very strong. So that was just part of the politics of Trump. But one of the most interesting things is that there's a roadmap going forward to say, okay, we've only got 300 now. We probably need 1.3 trillion a year moving by financing, moving by 2030. So we're going to come back and look at reforms to the IMF, the world Bank, the multilateral development banks, look at taxes on aviation and maritime to fund new approaches. And there will be a process of reviewing looking at who's getting what money, what reforms are moving forward, how it's happening. So this Baku roadmap is a quite unique new thing where essentially the Cop is now part of the international financial architecture, which was never before to try and squeeze us above 300 to something a lot nearer. What countries need which again is mostly investment, finances mostly. But you know, it's hard getting money in the middle of a global recession, the geopolitical tensions and high debt levels into emerging and developing economies, Anyways, even if projects are economic. So that's so that last thing, the roadmap I think is one of the most powerful things that came out this year. We now have to use it. It's just a roadmap. You have to have to walk it now.
Jane: [00:18:03] Yeah. I mean it's fascinating isn't it? And think, I mean, it's just so complicated. I don't think there's anything else which is as complicated as the cop process, which I think is why sometimes, like I said at the outset, it's difficult for people to navigate because obviously this is a multiyear process and which is then affected by kind of real time events and changes to politics and economies. So thank you for simplifying that. I think it's really helpful, actually, to have someone like you to be able to kind of make it really clear about what's going on and why it's so important. So let's you mentioned Belem in Brazil. Let's kind of wind forward to that in terms of thinking we've got this roadmap, but why is Brazil and why is the Cop 30? That's going to happen next year in Brazil. Why is it so important? Because there's a lot of emphasis on it, isn't there?
Nick: [00:18:55] Yeah. Well, this comes back to this five year cycle we set up in in Paris, which was basically, you know, we knew we wouldn't get there in one go. So we have to iterate. So 2025 countries by February is a deadline. But doubtless we'll see them come through the first half of the year, need to put their new targets forward. And basically those targets will tell us what temperature we're going to have to live with going forward, or at least the maximum. Will we get anywhere near 1.5? Probably not in the targets, but hopefully a lot nearer. And that so and there's no more time. Basically this is this is the critical iteration. If we don't really push the ambition this time around, it's very hard to, to pull back. Just that's just arithmetic of how many tonnes in the atmosphere, how many tons we produce. Here's how quickly we have to reduce things. So that's why there's so much focus on next year. And again, it's not just Belem, which is in November. And, you know, the final cop. It's about the whole year. It's going the whole year of ambition. So through the year we'll see targets come forward. We will doubtless see the UN secretary general say that's not enough. There'll be another push with leaders to try and move people to stronger targets perhaps provide more finance, which helps them move, perhaps do more deals on areas like renewables on phasing down oil and gas to try and get there. So by the time we get to Belem, there's essentially a package of both formal targets and informal targets where we can go, you know, how good is this? And, you know, and if you're a small island state who will go out of existence at 1.5 degrees, given sea level rise, they're going to have to make some choices.
Nick: [00:20:19] How do they go back to their people and go, well, all these people have agreed that it's going to be kind of around two degrees, and so our land is going to be flooded or it's going to be unliveable. So that's why it's so important, because previously we could always say, yeah, there's a bit more wiggle room, we can do a bit more next time, and we always have done more than we said we would do. It really is starting to kind of be the end game now if we don't really make those decisions. So I think that's why Belem is so important. And people, especially small island states, most vulnerable states will go, is this regime still working for me? You know, there's also taking cases to the International Criminal Court on climate change. So it is kind of the real litmus test of is this regime working for everybody, or do we need to do something fundamentally different? And if so, what would that be? So we think this is currently the, the only game in town, but it has to show it can perform. So that's why next year is so full of jeopardy! To show that we can collectively solve this problem in a way that is keeping everybody safe, not just a few people safe.
Jane: [00:21:21] Yeah, and really, that's about the last few years until 2030, which is sort of a key milestone before we get to 2050. Right. Which is probably far too far out for people to really get their head around in any sensible way. Yeah.
Nick: [00:21:34 ] Yeah. And I think this is so people will set targets for 2035 and that will say, you know, how quickly can we get down to zero by 2050? And I think this is way outside timescales. Humans are used to working on it, but the climate doesn't care about humans. It cares about itself. So that's why we have to adapt to what's needed. I think the most powerful statement and kind of hope that came forward at Cop is there was a statement by a whole set of countries, including Brazil and the UK saying we are going to align our next targets, at least with the straight line to net zero by 2050, which is what the science says the globe needs to do. And overperform if we can, like the UK, is doing more than that, and if we did that, we would be hitting somewhere between 1.5 and 1.9 degrees in the second half of the century. Currently we're on track for around two and a half degrees. 95% of emissions countries are said will go to net zero sometime around 2050 2060. So if everybody just aligned their targets with the promises they've already made, we would be in a much better place.
Nick: [00:22:37] And I think that's going to be part of the conversation. So turning all this abstraction away and go, okay, I said I'm going to be net zero sometime around 2050, 2060. If you're China, my next target is going to be on that track, credibly, believably. And I've got a delivery plan to deliver that and that, you know, that's what we need to kind of get away from all these abstract numbers and words and say, no, it's just really simple. We got to get to zero because then we stop changing the climate as fast as we all possibly can, and everybody's got to go that extra mile. So that's in a sense, trying to make this conversation a bit more understandable for normal people or even for politicians, because they get confused too. It's not their specialised subject because the real concern is it's very complex, but it's very easy with complex things not to drive them fast. And what we need to do is drive this incredibly fast, uncomfortably fast. And so we need a clear load sign. And that's net zero 2050, one generation of infrastructure. We need to be at zero emissions pretty much everywhere.
Jane: [00:23:36] Yeah. And if you think about that kind of straight line to 2050 right. You know zero by 2050, for me is always really important to kind of remember is you can't kind of delay this because the more you store up for later, the worse it becomes. It's not like you can say, well, I'm not going to do anything for the next 5 or 10 years because then I'll act, I'll do more later. But actually this is a cumulative effect because we're already starting to see the impacts of climate change. So we can't delay this any further. It gets more expensive the more we delay. So there's lots of good reasons to be observing and complying with that straight line that you've mentioned. So you mentioned kind of you know, what this all means to normal people, as it were. Let's finish on that question about day to day life. You know, we've been talking about the cop process, which sometimes feels like it's kind of 50 thousand feet. How do we how do we kind of bring this closer to home so that, you know, in our day to day lives, whether that's our kind of working life or our personal lives, how does this become real for people so that people really connect and engage into the whole process?
Nick: [00:24:40] So just taking the UK as an example. So for people in their everyday life, what this is going to mean is in the next five years, pretty much everybody will move to buying an electric car if they're buying a new car or even a second hand car and installing a heat pump instead of a gas boiler in the home. Now that will happen a bit slower. And having their home upgraded. In a sense two of the biggest things you do, you know, heat your house, drive your car are going to be impacted over the next five, ten years, if we're going to be anywhere near the trajectory of the UK has set itself. Up until now, we've just changed how we've made electricity. That's where most of our cuts we've turned off coal, we've built renewables. Do you still turn on a light in your house? Light goes on. Might be a slightly more efficient light, but that was you didn't really notice it. But now it's real changes to your house and your transport. And that's going to be real choices which the government has to make work for you. So that's for people in jobs going to be huge change in how people work. If you work anywhere in the automotive industry. Massive revolution scary revolution, heavy industry, the same. But also in the city in professional services, the UK has a huge opportunity because, you know, climate change is a smart revolution and it needs more people who do smart things.
Nick: [00:25:56] And UK is actually very good at exporting services of smart people doing smart things, whether that's in finance or engineering or urban planning but people will need to retrain. So if you're a professional who is a, you know, an engineer in the offshore oil industry, you've probably already retrained to offshore wind. Now that's going to happen for professional accountants, professional finance people, they're going to have to retrain to work in a world of climate change, whether that's leading with impacts or dealing with mitigation. So there's going to be a lot more visibility of this revolution in people's both work lives and personal lives. But I think also that's what kind of the impact. But also, again, people think Cop is abstract, but actually it's incredibly important, a very deep level, which is the worst thing we can do is give up and say it's not solvable. And there's a lot of people out there, often who own lots of fossil fuels who want to say, oh, it's impossible. We'll just have to live with it. We can't live with extreme climate change, we know that. It's very clear. So we need to carry on doing something. But it's quite hard to do things when you feel a lack of agency in the world is very complex. It's very turbulent. So for me, what cops do is they send a signal that we do have a plan where people are coming together.
Nick: [00:27:01] And so the little bit you do or the bit you are sent the government to do adds up to keeping you safe at a global level. And that sense of agency, that sense of confidence in the future, because there is this place where people come together and cooperate, is incredibly important in building the politics of change in every part of the world. And we see that in the polling. We see that in what people say. So it's this fragile thread that goes from Baku down to everybody in the world, to give them the confidence to allow the changes to happen, because the changes are going to be big. They're generally going to be positive in the long term, but in the short term, they're not going to be that easy. They're going to be difficult for people. But and without that guiding light, without that, that visible cop, where people see us coming together to solve things. I think it would be extraordinarily hard to maintain that support at the national level among everybody. So it feels abstract, a long way away in Baku or Belém or wherever we hold these conferences. But they are the keystone that holds the whole project together, and without them, it would be very difficult to see how we'd get anywhere near a safe planet.
Jane: [00:28:02] I think the whole point about policymakers and governments really making sure that they continue getting the support of their people and connecting the dots. And that golden thread between the heat source pump that you might have put in your house and, and nationally, what we're doing in terms of contributing to the overall objective, I think it really does make it real for people. Nick, thank you so much for sharing your experience, your very, very long experience in climate change. You've made it so simple for us. Thank you so much. And definitely given us food for thought as we go forward. Thank you very much indeed.
Jane: [00:39:06] So that's it for this week's episode of the Lseg Sustainable Growth podcast. Hope you enjoyed that conversation with Nick. I thought it was brilliant, actually. He really simplified the whole cop process for me and certainly gave us food for thought. If you've got questions, comments, or someone you'd like us to talk to, then do get in touch by email at fmt@lseg.com. That's all from me but watch out for the next episode very soon.
