Social Cohesion and Community during Periods of Change

Lord Sharma Excerpts

Friday 6th December 2024 Lords Chamber

[Lord Sharma (Con) (Maiden Speech)]

My Lords, it is an honour and a privilege to speak for the first time in your Lordships’ House, and it is a pleasure to follow the right reverend Prelate the Bishop of London. I start by thanking your Lordships for the incredibly kind welcome that I have received. I have genuinely felt that I have been enveloped in a blanket of good will, and I sincerely hope that that is going to continue for some time. My supporters at my introduction, the noble Baroness, Lady Hayman, and my noble friend Lord Gascoigne have offered wise counsel over the past few weeks. I also want to put on record my thanks to all the House staff for all the support they have given over the past few weeks, particularly the doorkeepers, who have quickly worked out that I am not going to win any prizes in an orienteering competition and will gently point me in the right direction when I am going down the wrong corridor.

I know that convention dictates that new Members speak a little bit about their own background, but I hope your Lordships will forgive me if I keep that bit mercifully short because I want get to on to the substance of this debate—as they say in government, I will get into the detail of that in due course during my time here. To summarise, 14 and half years ago, I arrived in the Commons after a career in investment banking, proudly representing a constituency in my hometown of Reading. I served in a range of junior Minister roles before I entered the Cabinet as Secretary of State for International Development and then Secretary of State for Business, Energy and Industrial Strategy and subsequently as president of COP 26, the UN climate change conference in Glasgow. I can tell noble Lords that they were all really quite interesting perches from which to observe an incredibly tumultuous few years over the past few decades.

Let me turn to today’s debate. As other noble Lords have noted, we are living through an era of increasing uncertainty and change. One of the biggest changes the world is facing, with profound impacts for social cohesion, is climate change. As I speak on this subject, I refer your Lordships to my entry in the register of interests. In particular, I serve as co-chair of the Rockefeller Foundation’s climate advisory council and I am an adviser to two finance firms: SEB and EQT.

I want to take your Lordships back for a moment to COP 26 in November 2021. That conference, resulting in the Glasgow climate pact, was agreed by almost 200 countries. Frankly—I say this not immodestly—it achieved more than many had expected when we started the whole process. We saw increased emission reduction targets from countries. We saw more finance put on the table from developed countries to support developing nations, particularly to help them adapt to the changing climate. We managed to go from less than 30% of the global economy covered by a net-zero target to over 90% by the time we got to Glasgow. Just about every G20 country signed up. For the first time, in 26 of these annual meetings, we managed to get the world to agree to phase down the use of coal.

COP 26 was also the first business COP. It was the first time in these meetings that we had the business community coming in real force and making commitments of its own. These included $130 trillion of private capital through the Glasgow Financial Alliance for Net Zero, committed to accelerating the decarbonisation of the global economy.

Despite that progress in Glasgow, at the time I described COP 26 as a “fragile” win. I said that the goal that the world agreed in Paris in 2015, to limit average global warming to 1.5 degrees above pre-industrial levels, was on “life support”. I said that because, although commitments are difficult to extract from countries—I can tell your Lordships, they are really difficult—getting those countries to implement those commitments on time is even harder.

Yes, there has been some progress on commitments made. In 2017, for instance, one in 70 new cars sold in the world was an electric vehicle; this year it will be one in five. On current trends, renewables sources are on course to generate close to half of global electricity by 2030. That is vitally important, as 75% of global emissions are energy related. But the reality is that the world is not doing nearly enough to cut global emissions and arrest global warming. Last year was the hottest on record. That record is expected to be broken this year, with 2024 set to be the first year to breach the totemic 1.5 degrees limit. Just about every day, we see the terrible impacts of the changing climate on millions of lives and livelihoods around the world—many billions of dollars of costs to infrastructure and business, all of it testing social cohesion. Ultimately, climate change does not recognise borders.

We also know that climate change exacerbates existing risks—water security, food security, migration risk—further testing social cohesion. In 2022, millions more people in the world were displaced due to climatic events than conflicts. Yes, many of them moved within their own countries or regions, but can we imagine what might happen if parts of the global South eventually become uninhabitable because of climate change? Where will these people move to?

But, just as the science has become starker and the risks posed by climate change have become clearer, countries and businesses have very much recognised the economic opportunities offered by pursuing a net-zero agenda—for jobs, for growth and for inward investment. However, one of the key constraints has been deploying finance at the scale that is needed; this was a key topic of discussion at the COP we have just had in Baku. Public finance is important, but the reality is that much of the finance required will need to come from the private sector. There is a shortfall in how much is being deployed annually, particularly in developing economies, where last year we saw cash outflows, not inflows.

With the right policy stimuli—planning reform, a green skills revolution and financial incentives for individuals and communities to take up green technologies and accept infrastructure locally—I remain confident that we will win the battle for net zero in the developed countries. But my concern is that we risk losing the climate war in developing nations unless we can significantly scale up the private finance needed to transition those emerging economies. There are ways to do this. I do not have time now, but I hope that this will be the subject of a future debate in this House.

Leaders around the world face many immediate challenges: war, trade conflicts and an increasingly fractured geopolitics which is picking at the very seams of the current world order. But, among all of this, the chronic threat from climate change continues to get worse. We need to treat this for what it is: a climate emergency. If we get it right, we can transition to a cleaner, greener and more prosperous world, with stronger and more cohesive societies. I look forward to advocating for that kind of world during my time in your Lordships’ House.