As gloomy Glasgow summit kicks off, is Israel missing out on a key ray of hope?

Climate conference expected to focus on role of business and money in getting world back on track, but no Finance Ministry officials will be there to weigh in

Sue Surkes is The Times of Israel's environment reporter

In this Dec. 22, 2016 photo, 50,000 mirrors, known as heliostats,encircle the solar tower in the Negev desert, near in Ashelim, southern Israel.  (AP Photo/Oded Balilty)
In this Dec. 22, 2016 photo, 50,000 mirrors, known as heliostats,encircle the solar tower in the Negev desert, near in Ashelim, southern Israel. (AP Photo/Oded Balilty)

GLASGOW, United Kingdom — Six years after a major meeting on climate change in Paris sparked euphoria with an agreement to cap global warming at below 2 degrees Celsius compared to pre-industrial levels, world leaders are gathering together once again as those high hopes have given way to an atmosphere of pessimism bordering on desperation.

On Tuesday, the UN’s 2021 Emissions Gap Report highlighted how far many nations still have to go to reach the target of under 2º C, to say nothing of the preferable Paris 2015 target of 1.5º C. New national climate pledges combined with other mitigation measures are putting the world on track for a global temperature rise of 2.7°C by the end of the century, something that would lead to “catastrophic changes” in the Earth’s climate.

“To keep global warming below 1.5°C this century… the world needs to halve annual greenhouse gas emissions in the next eight years,” the report said.

Over the next 12 days, COP 26 in Glasgow will focus on efforts to cajole nations to do more to reach their targets; to agree to a transparent verification mechanism to ensure goals are being met; and to make sure large economies that pollute more are helping the poorer nations that often bear the brunt of the effects of a warming earth.

The exercise will hardly be helped by the fact that big emitters China and Russia will be staying away.

And while Israel is sending a large delegation to Scotland, the pointed lack of senior treasury officials attending would appear to run counter to the meeting’s expected focus on financial negotiations.

Leaders of the G20 pose for a photo by the Trevi Fountain during an event for the G20 summit in Rome, October 31, 2021, laying the groundwork for the climate conference opening the same day in Glasgow. (Jeff J Mitchell/Pool Photo via AP)

The UN-sponsored meeting cannot impose its will upon the world. It can only try to persuade countries, including by using money to sweeten the deal.

Thus, negotiations will be held over the right financial mechanism to make it economically attractive for governments, industries and financial institutions to completely change their modus operandi by divesting from fossil fuels and investing in a green, sustainable future instead.

Carbon taxes have become a favored model of a financial tool doing just that. Putting a tax on emissions helps reflect the cost of putting carbon dioxide in the air — from ill health caused by pollution to property damage from flooding — and ensure that the polluters pay rather than all of society.

Israel appears to be closer than ever to adopting a carbon tax system, including it in the Economic Arrangements Bill set to be passed alongside the state budget making its way through the Knesset.

Air pollution around unrecognized Bedouin villages near Ramat Hovav in the Negev desert, southern Israel, December 28, 2017. (Yaniv Nadav/FLASH90)

For Israeli companies that export to Europe, paying a carbon tax would seem inevitable anyway. Starting in 2023, the European Union will start the phased introduction of a carbon tax on goods that have come from outside the bloc and were not already hit with a carbon tax, meaning they would need to pay the tax anyway.

Another tool that will be discussed at Glasgow is the creation of an international carbon credit market. Under emissions trading schemes, countries distribute permits to businesses allowing them to pollute a certain amount of CO₂. Companies that pollute more than their permit allows can purchase credits from those who pollute less at a price determined by supply and demand without affecting an overall national emissions cap.

The European Union’s Emissions Trading System established the world’s first major carbon market and remains its biggest. A global market has been sought since Paris, but has remained elusive. In Glasgow, nations will again attempt to broker a broad agreement on such a system.

Yet despite the focus on the business side of limiting global warming, Israel’s 120-person strong delegation to Glasgow, led by Prime Minister Naftali Bennett, Environmental Protection Minister Tamar Zandberg and Energy Minister Karin Elharrar, will not include a single representative from the Finance Ministry.

Part of this is timing. The meeting kicks off just two weeks before a deadline on passing a budget — Israel’s first in years — and many in the ministry are focused on that goal. One official from the budgets division was due to fly to Glasgow, but stayed behind to help shepherd the spending plan through the Knesset. Another one may be sent toward the end of the meeting.

No financial regulators will be present either. The only official from the public sector side of the financial world will be Lior Gallo, a research economist at the Bank of Israel, who has been working closely with the Environmental Protection Ministry. A business delegation will also make the trip to Scotland, led by Nitzan Moshe of Israel Chemicals Ltd.

Environmental Protection Minister Tamar Zandberg speaks during a Conference of Heads of Local Authorities in Ramat Negev, southern Israel, July 22, 2021. (Flash90)

The Environmental Protection Ministry is anxious for the country’s banks, financial organizations and insurance companies to integrate climate risks into their investment decisions. It has closely followed developments in Europe and in particularly in the UK, where banks are to be forced to reveal their exposure to the climate crisis.

A stinging State Comptroller’s report about the failures of the previous governments on climate change released last month credited the Bank of Israel with being one of the few Israeli institutions to have begun taking the climate crisis seriously over the past year. The Supervisor of Banks is understood to be working on new climate-risk-related regulations.

Zandberg and her team are hoping that discussions and agreement in Glasgow on financial mechanisms will help the Israeli business delegation at the conference, and the Finance Ministry back home in Israel, better internalize that the world is changing course.

On Monday and Tuesday, while Bennett is meeting other leaders and delivering a speech to the conference, likely on issues unrelated to climate change, Zandberg will hold meetings with White House climate advisers Jonathan Pershing and Sue Biniaz, as well as with the Cypriot Agriculture and Environment Minister Costas Kadis.

She will join Bennett in a meeting with Australian premier Scott Morrison, although the reason for her participation is not clear. Morrison, a supporter of coal development, was initially unwilling to go to Glasgow and his recent announcement that Australia will aim for net zero carbon emissions has been met with skepticism.

Energy Minister Karin Elharrar during a meeting of the Arrangements Committee at the Knesset on June 9, 2021 (Olivier Fitoussi/Flash90)

Elharrar is set to speak at an event of the International Energy Agency, which Israel is in the process of joining. She will also be hosting an event for Israeli green technology companies.

On Thursday, State Comptroller Matanyahu Englman, 1st Vice President of the governing board of the European Organisation of Supreme Audit Institutions (EUROSAI), will be in Glasgow for a special panel discussion he initiated on the role of national audit bodies in driving policy change on climate issues and monitoring their implementation.

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