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COP26, Prime Minister Draghi’s press conference with Minister Cingolani

Monday, 1 November 2021

[The following video is available in Italian only]


It has been a great pleasure to be here on the opening day of the COP26. Our Minister of Ecological Transition, Roberto Cingolani, will be here for most of the next two weeks, attending the various working groups.
This is a very important initiative indeed. It tracks the course we must embark on together to provide a response to the problem which, as we keep saying, we cannot solve alone. No country can solve these problems alone. This is perhaps the most important collective initiative dedicated to this purpose.
Over the last few years, it has been positive to see a growing awareness of the environmental disasters that await us if we do not fight climate change. However, at the same time, the involvement of certain countries, which are perhaps among the largest emitters, has not been in line with the commitments made collectively, nor with the objectives. What is even more concerning is the extraordinary increase in emissions that has been recorded since economic activity picked up again after COVID-19. We are already back to pre-pandemic levels.
These negotiations are made all the more complex by the fact that countries have different starting points. There are some rich nations that have much higher emissions than other countries because, unlike the European Union for example, they have not taken sufficiently effective action. As you know, the EU is responsible for approximately 8% of total global emissions; China for 28/29%; the USA for 17/18%. So, this is one reason why the starting points are different, but they also vary because countries are not at the same stages in their economic history and development. Some have only recently begun to grow and become more prosperous. The point of view of these countries is: ‘basically, we have this problem because you rich countries polluted when we weren’t producing any emissions. So, why now should all the burden of reducing emissions fall on our shoulders?’.

Then there are countries that are harder hit by climate change than others, despite being very small emitters themselves because they are poor. We then have those countries, such as the small Caribbean islands, whose economies are essentially based on tourism. The Prime Minister of Barbados made an extraordinary, powerful speech this morning. These are often vulnerable countries lacking the resources necessary to also make investments in infrastructure, i.e. in even the most simple things to protect them from the tragic consequences of climate change.
These are the reasons why these negotiations are difficult. I am expecting this COP26 to build on and go beyond the results of the G20. A number of aspects have already emerged today, which I mentioned in my introductory remarks. One is the fact that, if we manage to bring in private capital to fight climate change, then it becomes clear that financial constraints are not an issue. Tens of trillions of dollars are available from the private sector, large international financial institutions and banks.
What do we have to do to mobilise these investments? The public sector must help the private sector to share risk. These investments entail varying degrees of risk, and these risks cannot be borne by the private sector alone, so the public sector needs to intervene.
As I have already spoken a lot, perhaps I should stop here. If you have any questions, I shall continue to elaborate on this and on other points. 
Over to you.

Federico Gatti (Mediaset): Good afternoon, Prime Minister. As outgoing Presidency of the G20 and holding the Co-Presidency of the COP26, how do you plan on involving the countries that are not present here in discussions on climate change and on the efforts that need to be made? I am of course referring to China and Russia.
PM Draghi: During the G20 discussions, these countries moved away from their previous positions, drawing closer to the issue of the fight against climate change. The most important point is that there is no longer much difference between these countries and others when it comes to objectives and ambitions. Divergences still exist regarding the speed with which these challenges are to be met. However, also in this case, the fact that everyone has accepted that global warming must be limited to 1.5 degrees, rather than 2, is very important. This goal requires these countries, like all the others, to take coherent action. I don’t know how negotiations with these countries will evolve. I do, however, get the impression – as I said during the G20 press conference yesterday – that they are willing to talk, to come to agreements and to take steps forward. I believe this will turn into concrete action. Initiatives leading to reductions in emissions, especially those that are technological in nature, will help this ecological transition. 
I shall now pass the floor to Minister Cingolani who will provide you with some examples.
Minister Cingolani: It has already clearly emerged today that everyone expects this transformation, which should lead to 1.5 degrees instead of 2 degrees, to necessarily rely on technological innovation, as well as on cooperation in terms of global sustainable finance. 
There is widespread awareness that, if the level of technology remains as it is, it will be difficult to achieve the target of 1.5 degrees, or even 2 degrees. 
I think this is something that has been made very clear today; everyone has spoken about this.
At various stages of the discussions, it has been said that one of the best ways to speed up the transition is to make a similar effort on global warming as the international drive to develop the COVID-19 vaccine, which achieved an almost global solution in record time.
Some ideas have emerged on this that require further elaboration.
Our approach clearly focuses above all on energy and this is a huge sector, full of potential development on mobility. Just think about the research into ‘post-lithium’ batteries. Today, a 1kg battery stores 200-250 watts, while a litre of petrol can hold 10 times as much. Making further progress is therefore a key issue. Let us also think about circularity, whereby all the chemicals involved with materials and waste transformation, and the chemicals in and the transformation of plastics, can give rise to a number of solutions which, in addition to benefits in terms of recycling and reuse, can also bring advantages in the energy field (e.g. in the production of fertilisers).
Just think about how important it will be in 2050 when we achieve ‘Net Zero Carbon’: this means that the net balance between the carbon dioxide we emit and the carbon dioxide we in some way block or capture, must be equal to zero. Everyone knows that it will be impossible to achieve ‘zero emissions’, which is why we must compensate for emissions above a certain level. Having said that, there is a lot of time for technology to develop more intelligent methods. I was reading recently, for example, of teams extracting carbon dioxide from the air and transforming it into calcium carbonate, i.e., into stone. This is still in an experimental phase; I believe it’s possible to make a few million tonnes a year. Just imagine if technology like that were to evolve.
The direction we need to head in is very clear: we need a global effort which, in addition to immediately helping countries with their mitigation and adaptation measures, must also think about developing new technologies to allow us to move forward quicker. It is pointless to think that we can reach our 2050 goal with the current level of technology. So, now is the time for common efforts requiring very serious reflection.

Annalisa Cuzzocrea (La Repubblica): Good afternoon, Prime Minister. You mentioned “going beyond the G20”, but Prime Minister Modi of India has just revised his promise of net zero by 2060, and is now talking about 2070. Do you think it’s possible to overcome this choice of words by mid-century? How do you think the countries proposing the mid-century target can put pressure on China, India and Russia? Lastly, do you not find there are too many contradictions by countries? In August, the US asked the OPEC to increase their production of petroleum in order to reduce the cost of petrol; in Europe, the Nord Stream 2 is asking Russia to produce more gas. What are your thoughts on this?
PM Draghi: There is no doubt that certain conduct lacks consistency, and this of course weakens the position of the so-called virtuous countries. I don’t think we will get very far in terms of progress on climate by pointing fingers at guilty and innocent countries. There are very few truly innocent parties, and many more guilty ones by far. 
Public opinion in these countries certainly needs to put the pressure on, as it does everywhere. Climate activists are doing this, and we must never stop thanking them. This is very important, and they are also doing this in those countries.
These countries also have different starting point conditions. 
Having said that, the Indian Prime Minister, for example, was very open in Rome. A lot of the credit for managing to change the wording on the 2050 target, compared with what it was before, goes to him. There was also acceptance of the 1.5 degrees target and, even more significantly, with regard to finance and the G20 Finance Track, carbon pricing was mentioned for the first time. This is something that the European Union has had for a long time now, but this has not been the case outside of the EU.

These are all achievements that we managed to reach [with the involvement of these countries], including Russia and also China to a certain extent, who could easily have objected to everything. This is therefore a completely different form of diplomacy. I firmly believe that confrontational democracy won’t get us anywhere. Diplomacy must be based on close cooperation pursuing a common goal, not on confrontation. In this regard, it is clear that various geopolitical difficulties don’t help, but we must manage to overcome them.
I can see that a significant helping hand is coming from technology. 
With regard to smaller countries, on the other hand, as well as larger but relatively poor countries, financial aid, involvement in financial plans and also in technological investments are the key tools for everyone to work towards the same goal.

Alessandro Barbera (La Stampa): Prime Minister, I would like to focus on this point for a moment. It seems that China and India are the real players that need to be put under pressure, or in any case with whom we need to cooperate at this stage. My question to you is: this morning, you mentioned a number of multilateral instruments; the impression is that these countries are basically saying ‘you are asking us to pay a price that is too high for us compared with your position’, i.e., their ecological transition costs them more than ours does us. I was wondering – during the G20 and today – if you have reflected on possible instruments that can somehow change the paradigm and perhaps help overcome this rather understandable obstacle from their point of view?
PM Draghi: During the COP26, this week and next week, we will be seeing what the private sector, and in particular the private financial sector, can do to invest in climate solutions. I’m referring to climate solutions in a very broad sense, as these may range from the construction of resistant infrastructure to climate-related events, from technology to research into new ways of reducing the emissions produced by breeding farms, through new types of food for example. There really is an extraordinary range. I shall perhaps hand over to Minister Cingolani to elaborate further on this, because he has some very interesting things to add. 
So, how can we mobilise this money? The private sector needs to be supported by the public sector through sharing risk. But, how can we do this? Here, there are a number of players that absolutely need to be mobilised. All the multilateral development banks, the World Bank first and foremost, must make a move. Governments can also be involved in co-guaranteeing these projects, but the World Bank has clearly always played a synergistic role or, as it was once defined, a catalytic role in the creation of these financial packages. So, this is the first player that comes to mind, although the World Bank still does very little in terms of climate action. The IMF has mobilised impressive resources by allocating special drawing rights for 650 billion, as well as various other funds. In this regard, I am not concerned about the IMF.
One thing that has been pointed out is that we have not yet fulfilled the 100 billion dollar pledge. However, I wouldn’t worry too much about this; today, we’re at around 82-83 billion. I wouldn’t worry too much about this because the IMF can allocate more special drawing rights to cover today’s difference. 
The resources we’re talking about, however, are much larger. As I mentioned, we’re not talking about billions but tens of trillions. So, the mechanism, the concept that needs to be developed must centre around these multilateral banks, as these are the channel that immediately comes to mind. That’s why, this morning, I asked for a task force to be created at this Glasgow summit, to immediately elaborate this concept, which can then be further worked on by United Nations technical experts. The important thing is for this initiative to begin here. I am quite certain that this will happen over the course of the fortnight.

Elena Giuliano (Agenzia Nova): At the G20, there was a lot of discussion about climate change, but the minimum corporate tax agreement is also a great milestone. Is there a way to somehow quantify the benefits that this decision may have on the Italian tax system?
PM Draghi: I don’t know; if there is, I don’t know. You’re right in saying that there was a lot of discussion about climate change, but, as I said at the beginning of yesterday’s press conference, the G20 summit was merely the last step of a year’s worth of work, during which truly extraordinary results have been achieved. The one that you mentioned is the first and this objective had been pursued for years and years without ever being reached. Important results were also achieved in the field of health and the link between funding, finance and health; a task force is being created within the WHO. Altogether, there were many results. Of course, almost all of the attention is on climate change.
I am not aware of exactly how to quantify the benefits, although I’m sure Minister Franco would know if he were here.

Antonio Piemontese (CNBC): It would appear that the public sector is beginning to put pressure on the private sector to shift the latter’s positioning. Do you think this will come to something or will it just be talk over the coming days? Given your international experience and the fact you are recognised as playing a leading role, would you like to put yourself forward as a ‘guide’ to keep the spotlight on this role of private finance? 
PM Draghi: I think something can come of this. I believe there is a lot of room to be able to use private capital, to give private finance an important role in the fight against climate change. This is clear not only from the plans being made by governments or that will be discussed, but also because there is now greater commitment. If we look at the largest private financial institutions over the last year and a half, all have shown their commitment in this field on various occasions. Of course, the framework of reference with the World Bank etc. must allow for this flow of money to arrive. So, it’s about reviewing and selecting the investment projects, it’s about assessing risks, it’s about sharing risks and it’s about aligning various countries’ climate policies so as to have ambitions that can be fulfilled with this money. This money will arrive without ulterior motives and, in general, there is widespread awareness of how important this commitment is, also in the private sector.
In response to your second question about whether I shall put myself forward as a leader of something, the answer is no. 
Before coming to a close, however, I would like to pass over to Minister Cingolani so he can give you a very brief overview of how we can reduce emissions. In other words, it is not realistic to think we can reach our 2050 targets using only renewable energy. The European Commission, the United Nations, etc. have all told us that. So, we need to do much more. I shall now hand over to Minister Cingolani.

Minister Cingolani: As inhabitants of this planet, based on our local circumstances, as you have understood, we must quickly contribute to decarbonisation. We have precise targets on this. Decarbonisation can be achieved in three ways: the first is the most direct, and this is what we refer to as ‘low-hanging fruit’, meaning the most immediate things to do. It is clear that, today, the majority of carbon dioxide is produced by the way in which we produce energy; our primary production. We extract fossil fuels from the subsoil, and then we burn them to fuel internal combustion engines, or to boil water to create gas which in turn creates electricity through a turbine.
We have been doing this for decades, and it works very well, but the problem is that this is also one of the main sources of carbon dioxide. Today, changing first and foremost how we produce the energy we use and, in particular, moving towards electrification, involves another chain of transformation – relating to mobility and manufacturing. So, instead of burning coal, furnaces will use electric heaters powered by electricity; as you know, cars will run on batteries and those batteries must be charged using electricity that in turn must be environmentally friendly. Our first goal is therefore to change how we produce our primary energy and electrify all sectors that currently produce CO2. As you know, around a third comes from manufacturing, approximately a fourth comes form mobility and another 20/22% comes from how we live: our homes, heating.
In this regard, we are expecting, and indeed we are all working towards, an EU taxonomy. This is therefore not a question of personal choices; there is a taxonomy stating what can really be defined as ‘green’ in terms of climate-altering impact. Based on this taxonomy, the European Commission has made its position very clear: it has said that member states will be free to make their own choices, as long as those choices are technologically neutral and they allow for CO2 emissions into the atmosphere to be reduced as soon as possible. As you can imagine, this is a historic challenge from a technological point of view, as well as in terms of how our production, manufacturing and transport systems work, not to mention our lifestyles and how we live in our homes.
It is clear that this involves the green hydrogen chain, the battery chain, which must evolve, the electrification chain and artificial intelligence applied to networks, as networks are not used to managing such an erratic energy mix as the one involved with renewables. In the short term, this is the road we need to take; it is difficult for anyone to come up with anything more efficient between now and 2030. What we’ll need to see is whether technology evolves further between 2030 and 2050, and after 2050, and gives us some pleasant surprises.
The second way we have of reducing carbon dioxide is through the indirect method, and this is what we refer to as the ‘circular economy’. This consists of reusing, recycling and giving a second, third or even a fourth life to materials and devices that we have already produced, producing carbon dioxide. To be very clear on this point, the idea is to replace, for example, fertiliser with compost, i.e., with something made from a chemical reaction that has somehow altered organic waste. Or, for example, we can transform waste, which may be plastic or organic waste, into energy. This form of circularity is all based on chemical approaches to materials which, as of today, are not as well developed as they could be. As is the case with the energy transition, we only recently began to think about circularity, and this requires huge investments. 
The third and final way refers to passive carbon dioxide reduction, and this is what we call ‘carbon capture’. Today, one of the few methods we have is to take carbon dioxide and place it underground. In certain cases, this is used to place deposits under excess pressure, extracting other fuel; hence why it is often criticised. However, we must remember that the best carbon capture systems are the sea, the earth and plants; prospects for the renaturation of areas are huge. This obviously requires a planning of investments, but also involves many technologies that we are yet to study in depth; as of today, these technologies are perhaps not particularly efficient, but they could become so. Hence why I gave you the example of extracting carbon dioxide from the air and transforming it into calcium carbonate; this represents an inverse reaction: instead of eroding mountains, we can re-form them. Of course, these processes are currently not very efficient at all, but they do work.
Lastly – and this is isn’t a decarbonisation method, but it is something that we need  – we have technological developments for adaptation and mitigation. So, if we’re talking about adaptation, let’s think about what ‘crop genomics’ could mean, i.e., plant genetics developed to create crops able to adapt to very high temperatures or that can live in conditions without much water. Just imagine how important the water purification cycle is. The global water reserve is already diminishing, mainly due to polar ice melting. However, groundwater is also deteriorating, diminishing; bottom layers are ‘dirty’. So, here we have an issue with recovering and purifying water. We haven’t developed water technology until now because, all things considered, it seemed to be a sufficiently plentiful resource. 
I believe that, as the President of the Council of Ministers has said, this is a historic transformation in terms of its size and scope. There has never been anything of this size in the history of mankind, and countries cannot deal with it alone. We are not talking about trillions in investments per year for nothing. With these figures in mind, everything that the President of the Council of Ministers has said becomes automatically clear. This is a historic transformation, countries cannot manage alone; everyone must work together and 12-figure investments are needed, not for a year but for at least a decade. Let’s see what happens. Thank you.

[Courtesy translation]