Your members are working hard with the City of London Corporation towards a net-zero emissions City by 2040. Alderman Professor Michael Mainelli asked the following question in Common Council on 19 May 2020:
My Lord Mayor.
May I join in the congratulations to Deputy Chris Hayward upon his appointment from the fine ward of Broad Street to Chairman of Policy & Resources. I trust that I speak for all honourable members when I applaud the Chairman of Policy & Resources, and his predecessors’, continuing work towards a sustainable City. As a reminder, the City’s modern green credentials are long-standing. Common Council passed the first UK clean air directive in 1953. After COP3 in Kyoto in 1997, the Corporation developed the EU Emissions Trading System. In 2002 the Corporation produced the “London Principles” framework for sustainable finance for the Johannesburg Earth Summit. In 2005 the City launched London Accord, a cooperative scheme to share investment research environmental, social, and governance (ESG) reports with policy makers, NGOs, and the general public. In 2006, the London Accord group posed the ‘stranded assets’ systemic financial stability question, garnering the support of the Bank of England. In 2007, Lord Mayor Sir David Lewis launched a 780 page report on the investability of climate projects. In 2009, the Corporation took a London Accord idea on policy performance bonds to the World Bank and COP15 in Copenhagen, garnering the support of the French government. Policy performance bonds link a bond’s interest rates to carbon emission targets. Such bonds are analogous to inflation linked bonds. The policy performance bond market, according to Bloomberg, was $11bn in 2020, $110bn in 2021, and projected to be $250bn this year. The big news this March is that the first sovereign policy performance bond of $2bn was issued by the government of Chile. Chile pays more interest on its bond if it fails to meet its 2030 emission and renewable energy targets.
Closer to home, in 2021 the City of London Corporation announced a net zero 2040 target for its combined £3bn investment portfolios, outlining a concrete action plan in response to the Intergovernmental Panel on Climate Change’s ‘code red’ warning. The City is alive with green, in tune with our Lord Mayor’s national colours, the Green Finance Institute, Heart of the City SME training, the Livery Climate Action Group, sponsored by my fellow Alderman, Sheriff Alison Gowman, and much more.
My question though. 25 wards constitute the City of London. If we are to achieve our green goals with “action at the local level”, then every ward has to reduce emissions to zero in less than 18 years. Perhaps each ward should have its own ‘net zero 2040’ plan, call it “Get Zero”. Can the Corporation provide each ward with their current emissions and detail how each ward will progress to its net zero 2040 target? How can we make other cities green with envy of our Green Destination City ambitions?
My Lord Mayor.
And a supplementary:
My Lord Mayor.
May I thank the Chairman for his considered response. We all appreciate the complexity of targeting systems. Many would argue that price mechanisms for carbon emissions, as specified at COP 3 a quarter of a century ago, are the important path to follow. After a rocky start in 2005, over the past few years the EU emissions trading system has risen to solid levels forcing firms to cut back on their pollution. Since Brexit, the UK has its own emissions trading system functioning well with the EU’s. Both markets are approaching a price of €100 per tonne of emissions. Last year, China launched a national emissions trading system. By some estimates, 25% of global emissions are within credible cap-and-trade systems. These emissions trading systems are the right market approach for a market city. What is the Corporation doing to help promote the resurging carbon markets, especially as we were their midwife some two decades ago?
My Lord Mayor.
You can watch the exchange at Common Council here from 48:08 to 58:05.