This article is part of our special report COP25: Countries pressed to deliver.
The longest in the history of UN climate negotiations, the COP25 ended on Sunday (15 September) with almost no significant decisions being made. Julia Panzer gives her take about the business implications of the Madrid climate talks.
Julia Panzer is Head of Public Affairs and Sustainability at Danfoss, the Danish technology company. She answered in writing to questions by Claire Stam.
Negotiators failed to reach an agreement on carbon markets at COP25. In the final hours of negotiations, over 30 governments joined behind the San Jose Principles in an effort to preserve the integrity of carbon market rules and prevent loopholes and the ability for double-counting carbon credits. As a member of the ‘We mean business’ coalition, Danfoss supports the idea of carbon-pricing. What is your take on the final UNFCCC text on Article 6?
The problem is not the final text – the problem is the final text that countries could agree on, which is not strong enough to respond to the climate emergency we are in.
This means negotiations are stalling yet again, and countries need to step up individually in the lead-up to COP26 to revitalise the process towards 2020. The majority of countries agrees with what is needed: an energy transition first and foremost. An industrial transition. And nature-based solutions, with a focus on oceans and forests to balance our global climate.
Science should guide us, just as in Denmark, where we are headquartered. The Danish government came to COP25 with a strong message and a 70% CO2 reduction target, having asked science what’s necessary, not what’s possible. This is the type of leadership we need.
Why does Danfoss support carbon-pricing? Climate economists argue that to be effective, price on carbon should range between 50 to 100 euros. What is your position?
We see investment decisions every day as part of our business. And it is clear that our financial system is failing to support the necessary climate targets to bring the world back on track, aligned with Paris, aligned with science and aligned with the 1.5C pathway needed to keep people and the planet safe.
Investments into sustainable, energy efficient and renewable projects are still lagging behind. As a business, based on energy efficiency, we know that the market alone will not solve this challenge. We need a price on carbon. Therefore, Danfoss supports a price on carbon at the right level as suggested by climate economists, to incentivise investments into renewable energy, as well as efficiency.
Given the weak outcome at COP25, the stake for COP26 which is to take place on Glasgow, are higher than ever. What are your expectations on governments for 2020?
The new European Green Deal is more than an important political signal. It also outlines a long series of tangible actions to get us to where we need to be – we need more of this.
The world urgently needs increased ambition, enhanced NDCs, concrete CO2 emission reduction targets with sectorial plans on how to get there, country by country.
As industry we are here to support governments and showcase what is possible today in partnership with our employees and civil society. We know that most importantly, we need to focus our energy on the energy transition, which needs to be a just. As a follow-up to the Climate Action Summit, we as Danfoss will work with governments across the globe in partnerships such as the Cool Coalition led by UNEP to support countries in their development of sustainable cooling action plans, the Three Percent Club to increase ambition and concrete action on energy efficiency and with the Getting to Zero Coalition, to decarbonise the maritime sector.