Net Zero - Zero Delivery

Conference of the Parties (COP) is the supreme decision-making body of the United Nations Framework Convention on Climate Change. London has long been trying to bridge from COP 1 in Berlin to COP 31 in Antalya this year. A bridge lets people on different sides of a problem meet in the middle. It is less useful if everyone stays on their own bank and shouts across the water.

My theme as Lord Mayor of London was “Connect to Prosper”. As a long-term environmentalist since the 1970s – forestry cover science research, first conservation maps of the world, ISO 14000, emissions trading support for COP 3 in Kyoto and early shadow carbon markets, Marine Stewardship Council, China Construction Bank’s Global Green Finance Index, and more - climate action was one of my six big themes leading to the City Carbon Credit Cancellation Service.

When it comes to COPs, the world is remarkably good at gathering people to agree that something must be done. We are less consistently good at making sure it gets done before the next gathering.

We have the technology; government policy is weak; finance will come when policy is certain. So let’s talk about carbon emission markets, carbon removal (or sequestration) markets, and policy performance bonds.

The finance gap: mind the gap

Let me begin with two numbers from our work at Z/Yen. Global energy-transition investment reached about $2.3 trillion in 2025 — a record. Yet estimates suggest that roughly $235 trillion of investment will be needed by 2050 to reach net zero. But we can raise huge investments at short notice, think of the internet in the mid-90s, or the current rage for AI and data centres.

In London, we hear “Mind the gap” on the Underground. In climate finance, the announcement should be louder, and the gap harder to ignore.

Why is the money not flowing faster? Because investors do not invest in good intentions and don’t trust government commitments to policy. They invest when they can understand the risks, trust the rules, assess the returns, and believe that the rules will still be there when the project is built.

Green finance entails energy security, industrial competitiveness, supply chains, and resilience. Voters notice energy bills before they notice emissions, and politicians tend to notice voters before they notice climate models. That is not a reason to abandon climate policy. It is a reason to design it so that it delivers security, affordability, and prosperity alongside lower emissions.

Three markets that can help

COP 31 offers Türkiye an opportunity to help move the discussion from commitments to implementation. Türkiye is especially well placed to help connect Europe, Asia, and the wider Mediterranean. The task is to turn that connectivity into practical cooperation on clean energy, resilient infrastructure, technology, and investment.

As the saying goes, “If you want to go fast, go alone; if you want to go far, go together.” Climate infrastructure is a long-distance undertaking. It needs partners who can stay the course.

At Z/Yen, we have long argued that we need better-designed markets, not simply more technology. A perfectly transparent, blockchain-enabled, AI-verified bad market is still a bad market. Technology can improve measurement and reduce friction, but it cannot rescue incentives that are poorly designed. If we find ways that people will make money from preventing climate change, then we will have no problem getting the investments operating.

Three areas deserve particular attention.

First, carbon emission markets. Emissions trading schemes (ETSs) cover a significant share of global emissions, showing that carbon can be priced rather than treated as a free dumping ground. COP 3 in Kyoto in 1997 was a global agreement to use ETSs. The EU system is an important benchmark; China’s national scheme is the largest by coverage; and the UK and other jurisdictions have developed their own systems. The priorities are integrity, effective coverage, and predictable rules. A carbon market cannot work if permits are so plentiful that scarcity becomes theoretical. I applaud Türkiye’s launch of an ETS this year.

So here’s a credible COP 31 target – move from 25% ETS coverage of global emissions to 50% by 2030. Double it. Move from a $1tn market to $2tn.

Second, credible carbon removal markets. Carbon removal (or sequestration) markets have struggled with quality and questions over whether claimed reductions are real, measurable, and permanent. Insurance, independent verification, and performance bonds can put consequences behind claims. If a forest burns or a restoration project fails, there should be a credible mechanism to ensure the promised climate benefit is still delivered. “A promise without a guarantee is not an asset. It is a hope.”

So here's a credible COP 31 target - establish a clear, separate, and standardised (e.g. 25 year guaranteed removal tonnage) market for insurance-backed sequestration credits.

Third, policy performance bonds — sometimes called sovereign sustainability-linked bonds. These link the cost of government borrowing to measurable performance against sustainability targets. Chile helped demonstrate the model, and countries including Uruguay, Thailand, and Slovenia have followed with related approaches. If governments want markets to believe their commitments, they should be prepared to have them measured. COP 31 should be about making the other thirty COPs’ promises credible, and giving investors a clearer basis on which to support long-term projects.

So here's a credible COP 31 target - every government should issue a 20 year policy performance bond tied to its UNFCCC target (as Chile did in March 2022 for its 2030 UNFCCC targets).

A small joke about large problems

There is a familiar story about two people looking at a half-built bridge. One says, “We need more ambition.” The other says, “We need a construction schedule.” Both are right — but only one is likely to get the bridge open before the next summit.

We should not confuse announcements with outcomes, or expect one label to solve every environmental and social problem. ESG ratings can disagree dramatically about the same company. Sometimes ESG seems to mean “Extremely Subjective Guesswork”. Standards, transparent data, and accountability move us from argument to evidence.

We cannot keep kicking the can down the road, particularly when the road itself is increasingly under water. If the joke is weak; the risk is not.

Connect to prosper

Let me close with a thought attributed to John Maynard Keynes: “The difficulty lies not so much in developing new ideas as in escaping from old ones.” We have the technologies we need, substantial pools of capital, and businesses ready to innovate. What we need are better incentives, credible commitments, and cooperation that survives political cycles.

The atmosphere does not care whether a target was announced in Baku, London, or Antalya. It responds to what we emit — and what we genuinely remove. The bridge from COP 29 to COP 31 must be built from practical projects, reliable measurement, sensible finance, and enduring partnerships.

Let us use London’s financial strengths and Türkiye’s connectivity to turn climate ambition into investment, and investment into results. Let us connect to prosper — and ensure that, when we leave Antalya, we have more to show than an impressive collection of lanyards.