As the third decade of the 21st century gets under way, we will look back on 2021 as a year when the future of our life on earth balanced on a fulcrum.

But which way will we lean? Will we grind out a post-COVID-19 recovery along the lines of the recovery from the last great global financial crisis in 2009 towards a more dangerous future of higher consumption and emissions? Or will policy-makers, politicians, business leaders and civil society summon their collective imaginations, cooperative spirit and willpower to craft stimulus packages and investments that lead to a more sustainable, nature-friendly future?

Last year broke yet more of the wrong kinds of environmental records. A peak temperature of 38°C inside the Arctic Circle. Wildfires in the Amazon that spread to the Pantanal, the world’s largest tropical wetland, driving a drought that cost Brazil’s agriculture sector $3 billion. Historic levels of flooding along the Yangtze, affecting 63 million people.

More Californian fires to add to the $148 billion of losses from 2018’s fires. A record number of Atlantic hurricanes making landfall.

• 300mThe estimate of the number of people who live in places where climate-triggered flooding will likely occur by 2050
• 5xGreenland’s loss of ice when compared with the melt rate 25 years ago
• 23%The percentage of global climate change emissions that the degradation of ecosystems is responsible for
• $44tnOr one-half of all global GDP depends on nature and is threatened by its loss
• 1mThe number of species at risk from extinction

Yet amid the storm clouds of grim statistics are some sunbeams of hope. Last year saw a doubling in the number of companies committing to net-zero targets. The election of Joe Biden means the three largest carbon emitters in the world – China, the EU and the US – have all committed to emissions reduction targets that will start to bend the warming curve. But the actions we take this year and this decade are critical, as their impacts will resonate for generations to come.

Net-zero target

The landmark Paris Agreement is clearly driving climate action. Estimates of end-of-century warming, based on real-world climate policies, have fallen from 3.6°C in 2015 to 2.9°C in December 2020, according to The Climate Action Tracker, a consortium of non-profits that includes the highly-regarded Potsdam Institute for Climate Impact Research.

To stand a good chance of hitting Paris’s 1.5°C target, global CO2 emissions must reach net zero by 2050, with other greenhouse gases following soon after. Some European countries, the UK and small island states were among the first to commit to net-zero emissions by 2050, followed by the European Union in March 2020.

Then, at the UN’s General Assembly in September, President Xi Jinping surprised everyone by pledging to take China – responsible for one-quarter of global emissions – carbon-neutral before 2060. Japan, South Korea, Canada and South Africa followed with their own net-zero announcements. Meanwhile, President Joe Biden has promised a carbon-neutral United States by 2050.

The war has started and we’re losing it … we know we can’t afford to lose any longer and action is the one moral, economic and scientific imperative worth contemplating

—John Kerry, Special Presidential Envoy for Climate, National Security Council (NSC)

This takes the number of countries with such commitments to 127 – responsible for around 63% of global emissions. According to The Climate Action Tracker, if all these targets are achieved, “our temperature estimate for 2100 would be as low as 2.1°C, bringing the 1.5°C temperature limit of the Paris Agreement within reach”.

Beyond the pledges

Pledges are the easy bit; it’s tougher to figure out how to get there. Ahead of the COP26 climate conference in November, the UK, the host country, is leading the way by committing to cut emissions by 68% by 2030. Other governments need to adopt stronger targets for this decade, at least halving greenhouse gas emissions by 2030, to ensure they can deliver on their 2050 net-zero goals and close the gap to 1.5°C.

Clean energy is the biggest challenge. Energy for transport, electricity and heat, buildings, manufacturing and construction – plus fugitive emissions and other fuel combustion – accounted for a colossal 73% of world greenhouse gas emissions in 2016, according to the World Resources Institute. Despite impressive growth in solar and wind power, fossil fuels still supply 84% of the world’s energy consumption, according to oil giant BP. Renewables and hydro supply 11%, while nuclear’s contribution is 4%.

The key to hitting our emissions reduction targets is to kick our addiction to oil, gas and coal. The question is how? In a recent interview with The Economist newspaper, Bill Gates was asked whether the climate challenge was one of behavioural change or innovation.

Gates emphasised innovation unequivocally. It is important to change our habits, but that will deliver at best a 15% cut in emissions, according to the International Energy Agency. “We’re not just trying to reduce emissions by 15% or 20%; we need to get to zero,” said Gates, adding: “The kind of activities that produce emissions are so pervasive you can’t drive down demand for those services that dramatically. In fact, in developing countries, you should allow demand for those services to go up.”

Cost of carbon

Innovation has led to spectacular advances in the efficiency of solar cells, lithium batteries and both onshore and offshore wind power. We now need to find new, low-carbon ways of making steel and concrete, of propelling cars and planes. To unlock the innovative power of the private sector will take leadership and capital. Yet, the combined annual investment in climate-friendly technology, from venture capital, governments and energy companies, currently totals just $80 billion – around 4% of the global total spend on R&D.

Governments need to step in and fund R&D into the technologies that are too risky or large for private investors to take on alone, such as green steel and cement.

Even with innovative solutions, new technologies will cost more initially – what Gates calls the “green premium”. Getting this premium down near to zero is vital if these green technologies are to be adopted at scale, especially in emerging markets such as India. Governments can play a key role in creating the demand needed to build volume and reduce prices, by, for example, greening their own procurement processes.

More importantly, governments need to set a price on carbon. Gates reckons somewhere between $100 and $200 per tonne would send out a clear market signal. BP has calculated that a net-zero scenario requires carbon prices to reach $250 per tonne in the developed world by 2050, according to its Energy Outlook 2020. Carbon pricing is needed to “incentivize significant gains in both energy efficiency and the use of lower carbon energy sources,” says the oil major.

COVID-19 catalyst

If there is a silver lining to the pandemic, it is that it gave the atmosphere a brief breathing space in the relentless upward surge in CO2 emissions. It wasn’t enough to halt the heating of our planet’s surface; when the data is in, scientists expect 2020 to be on a par with 2016 as the hottest year on record. But COVID-19 might offer a more long-lasting contribution to the battle against climate change – the chance to chart a more sustainable economic course out of the pandemic. With governments spending trillions on stimulus packages, the opportunity for a green recovery is too good to miss.

Government investment in the circular economy and climate-friendly infrastructure would not only slash emissions, but stimulate growth and create new jobs. Of the 84 billion tonnes of materials consumed globally each year, just 9% are reused. For Europe, a circular economy development path could halve CO2 emissions by 2030, while increasing each household’s disposable income by €3,000, according to the Ellen MacArthur Foundation.

The EU is planning a transition to a circular economy as part of its Green Deal and anticipates this will save businesses €600 billion a year, while creating 580,000 new jobs by 2035. Answering this push, on 21 January, the World Economic Forum launched the global Circular Electronics Partnership with 30 top electronics brands to create a circular economy for e-waste, which is worth at least $62 billion annually. Meanwhile, the combination of cutting subsidies to fossil fuels – easier with oil prices so low – and boosting revenues from a carbon tax could help governments plug the huge deficits they are running up in the recovery from COVID-19.

The private sector needs to step up, according to Gates. “We expect leadership from companies that are big and doing well and have the IQ to have a department that’s really thinking these things through,” he said. He warned against bosses just going through the motions on metrics: “Companies are going to have to make the distinction between trying to look good and actually having impact.”

On 21 January, the Forum published a report, Net-Zero Challenge: A Supply Chain Opportunity, which details how decarbonising eight supply chains – including food, construction, electronics and automotive sectors – could halve global emissions, while only pushing up end-consumer costs by a few percent. “Supply-chain decarbonization will be a ‘game changer’ for the impact of corporate climate action. Addressing Scope 3 emissions is fundamental for companies to realize credible climate change commitments,” said Nigel Topping and Gonzalo Muñoz, the UN’s High-Level Champions for climate action, in their preface to the report.

The World Economic Forum is re-examining the relationship between cities and healthy living through its Healthy Cities and Communities initiative, which is promoting innovative urban partnerships. This has resulted in range of global and local initiatives designed to help city residents better focus on their physical and mental health. It is also looking at integrating social justice and sustainable development in an effort to develop inclusive futures during and beyond the pandemic.

Restoring nature will slow warming…

While the world tackles the health and economic consequences of COVID-19, two even more profound environmental crises have continued unabated – climate change and the accelerating destruction of nature. But just as these twin crises aggravate each other’s impacts, so actions to reduce atmospheric warming and the ravaging of ecosystems are mutually supporting.

Climate change and ecosystem destruction are not linear processes. The warmer and less biodiverse our world becomes, the greater the risk we cross tipping points of no return. One point is the melting of the Arctic tundra, releasing vast quantities of methane into the atmosphere – a greenhouse gas that is at least 25 times more potent than CO2. Another tipping point is the Amazon rainforest, huge tracts of which risk becoming savannah if action isn’t taken to stop deforestation.

Until we reach those tipping points, we have the power to reverse the loss of ecosystems and change the climate for the better. Beyond those tipping points, we lose that control.

The degradation of ecosystems is responsible for 23% of global climate change emissions, making it essential for governments and businesses to work harder to unify efforts towards tackling both crises. In July 2020, the Forum published the second report in its New Nature Economy report series, The Future and Nature of Business, which identified an ambitious range of nature-positive transitions in three systems – food, land and ocean use; infrastructure and the built environment; and energy and extractives.

The challenges in these three systems are breathtaking. Based on current trends of the growing global consumer class, food production alone would need to increase by 50%-98% by 2050 from 2005 levels. In urban environments – critical to driving economic growth, alleviating poverty and improving living standards – populations will increase by 1.5 million people a week until 2030. So how we design and build our cities will be vital for all our futures. Two Forum initiatives – Net Zero Carbon Cities and BiodiverCities – aim to harness the potential of cities as catalysts to stimulate low-carbon, pro-biodiversity urban living. Meanwhile, the negative impacts – in terms of air pollution and carbon emissions – of extracting and producing energy and raw materials equates to $9 trillion a year, more than 10% of global GDP.

… and create value and opportunity

The transitions proposed in these three systems would require $2.7 trillion a year between now and 2030 but could generate $10 trillion of business opportunities annually and create nearly 400 million new jobs over the next decade. Government has a key role to play in protecting critical ecosystems, framing the right regulations and aligning state subsidies and incentives with the restoration of nature, not its destruction. But voluntary action to shift corporate and personal habits towards sustainable consumption is also vital.

• 68%The amount of emissions UK has committed to cutting by 2030
• $62bnThe annual worth of the circular economy for e-waste
• 580,000The estimated number of new jobs created as a result of the European Green Deal by 2035
• $10tnThe potential annual business opportunities generated from the proposed green transitions
• €3,000The estimated increase in household disposable income by committing to a circular economy

A major initiative by the Forum in support of restoring biodiversity is the 1t.org platform, which supports existing efforts to conserve, restore and plant 1 trillion trees by 2030, as part of the UN Decade on Ecosystem Restoration 2021-2030. The initiative seeks to raise the ambition of public and private sectors, remove the barriers to system change and connect reforestation champions on the ground with the resources they need.

Natural climate solutions – such as reforestation, protection of peatlands and cover cropping – can contribute one third of the cut in carbon emissions required by 2030 to stay on the Paris Agreement trajectory, according to the Forum’s forthcoming Nature and Net Zero report. These measures are significantly cheaper than other forms of CO2 removal and can be deployed immediately without waiting for technological breakthroughs. In addition to absorbing carbon, they deliver co-benefits such as safeguarding biodiversity, securing water supplies, improving soil health and steering resources towards developing economies by offering high-quality carbon credits.

Green investment

Private-sector commitment to climate action is gaining momentum. The number of companies making net-zero commitments has doubled in the past year. Mark Carney, Governor of the Bank of England (2013-2020) and now the UN Special Envoy for Climate Action and Finance, said recently: “As more and more firms commit to net zero, they will increasingly need to show how they plan to meet their net zero targets through an appropriate mix of emissions reductions and offsets. This presents an enormous green investment opportunity, which can help generate large flows of private capital from advanced to developing economies and help fund projects from nature-based solutions to technological solutions like carbon capture and storage.”

What’s the World Economic Forum doing about climate change?

The Forum has given its support to the Taskforce on Scaling Voluntary Carbon Markets, headed by Carney. The task force, which comprises experts from six continents, has released 20 comprehensive, tangible actions to deliver this carbon market at pace and scale. The overall aim is to create a set of “core carbon principles” to ensure that reductions and offsets adhere to the highest levels of environmental integrity.

So, which way will the balance tilt; towards or away from a green recovery? Sir David Attenborough’s latest series of films, Perfect Planet, includes a sequence shot in the Amazon, as rising rainwaters threaten an anthill with destruction. The ants work together at furious speed to evacuate the colony and build a living raft with their own bodies, which floats down the floodstream bearing their queen with her clutch of eggs. Their solution is highly precarious, yet it resonates with our own situation. The difference is that we still have a brief window of opportunity to prevent the flood. Let’s hope we take it.