With the current U.S. federal administration abandoning its leadership role in the fight against climate change, international efforts by governments to mitigate global warming appear to have stalled, at least for now.
But according to Adelina Barbalau, an expert on climate finance in the Alberta School of Business, hope may lie elsewhere - in the global marketplace and the opportunities for multinational companies to pick up the slack.
"With the right incentives, these companies can reduce emissions at a scale few governments can match," says Barbalau. "The key step is ensuring that business incentives are aligned with society's climate goals."
Following the withdrawal of the U.S. from the Paris climate agreement, the Environmental Protection Agency this month overturned a 2009 "endangerment finding," a scientific determination that climate change threatens public health and welfare. Abandoning it means effectively "relinquishing its authority to regulate the emissions that are dangerously warming the planet," reports The New York Times.
At the same time, low-carbon energy investment is now exceeding that spent on fossil fuel development. Renewable energy sources are now the cheapest in much of the world, making up more than 90 per cent of new power generation capacity in 2025.
In other words, there is more cost savings in green energy, says Barbalau. The tide is turning, with or without government regulation.
"Climate change is a reality, and private actors know that," she says, which is why we see it reflected in the market. "Renewable energy is now actually cheap, so they're thinking, 'Why not adopt it?' Hopefully there has been enough momentum that we can go with these alternative technologies."
And though multinational corporations have been major contributors to global warming - and often vilified for it - they are now well positioned to take the lead on reducing emissions, says Barbalau. Their motivation doesn't need to be grounded in some altruistic mission to make the world a better place (an assumption Barbalau considers naive) if driven by the right economic incentives.
"The size and ability (of multinationals) to co-ordinate efforts across countries put them in a unique position to drive climate action at scale," she says.
"They're much more efficient than governments; you're more likely to get a job done and do it better if you have skin in the game (and are less vulnerable to the vagaries of politics)."
