Covid-19

SARS-CoV-2 is following the evolutionary rule book

Its new variants are optimised for spreading


Natural selection is a powerful force. 

In circumstances that are still disputed, it took a bat coronavirus and adapted it to people instead. The result has spread around the globe. 

Now, in two independent but coincidental events, it has modified that virus still further, creating new variants which are displacing the original versions. 

It looks possible that one or other of these novel viruses will itself soon become a dominant form of sars-cov-2.

Knowledge of both became widespread in mid-December. In Britain, a set of researchers called the Covid-19 Genomics uk Consortium (cog-uk) published the genetic sequence of variant b.1.1.7, and nervtag, a group that studies emerging viral threats, advised the government that this version of the virus was 67-75% more transmissible than those already circulating in the country. 

In South Africa, meanwhile, Salim Abdool Kalim, a leading epidemiologist, briefed the country on all three television channels about a variant called 501.v2 which, by then, was accounting for almost 90% of new covid-19 infections in the province of Western Cape.

Britain responded on December 19th, by tightening restrictions already in place. South Africa’s response came on December 28th, in the wake of its millionth recorded case of the illness, with measures that extended a night-time curfew by two hours and reimposed a ban on the sale of alcohol. 

Other countries have reacted by discouraging even more forcefully than before any travel between themselves and Britain and South Africa. 

At least in the case of b.1.1.7, though, this has merely shut the stable door after the horse has bolted. That variant has now been detected in a score of countries besides Britain—and from these new sites, or from Britain, it will spread still further. 

Isolated cases of 501.v2 outside South Africa have been reported, too, from Australia, Britain, Japan and Switzerland.

So far, the evidence suggests that despite their extra transmissibility, neither new variant is more dangerous on a case-by-case basis than existing versions of the virus. 

In this, both are travelling the path predicted by evolutionary biologists to lead to long-term success for a new pathogen—which is to become more contagious (which increases the chance of onward transmission) rather than more deadly (which reduces it). And the speed with which they have spread is impressive.

The first sample of b.1.1.7 was collected on September 20th, to the south-east of London. 

The second was found the following day in London itself. A few weeks later, at the beginning of November, b.1.1.7 accounted for 28% of new infections in London. By the first week of December that had risen to 62%. It is probably now above 90%.

Variant 501.v2 has a similar history. It began in the Eastern Cape, the first samples dating from mid-October, and has since spread to other coastal provinces.

The rapid rise of b.1.1.7 and 501.v2 raises several questions. One is why these particular variants have been so successful. A second is what circumstances they arose in. 

A third is whether they will resist any of the new vaccines in which such store is now being placed.

The answers to the first of these questions lie in the variants’ genomes. cog-uk’s investigation of b.1.1.7 shows that it differs meaningfully from the original version of sars-cov-2 in 17 places. That is a lot. 

Moreover, several of these differences are in the gene for spike, the protein by which coronaviruses attach themselves to their cellular prey. 

Three of the spike mutations particularly caught the researchers’ eyes.

One, n501y, affects the 501st link in spike’s amino-acid chain. This link is part of a structure called the receptor-binding domain, which stretches from links 319 to 541. 

It is one of six key contact points that help lock spike onto its target, a protein called ace2 which occurs on the surface membranes of certain cells lining the airways of the lungs. 

The letters in the mutation’s name refer to the replacement of an amino acid called asparagine (“n”, in biological shorthand) by one called tyrosine (“y”). 

That matters because previous laboratory work has shown that the change in chemical properties which this substitution causes binds the two proteins together more tightly than normal. 

Perhaps tellingly, this particular mutation (though no other) is shared with 501.v2.

Golden spike

b.1.1.7’s other two intriguing spike mutations are 69-70del, which knocks two amino acids out of the chain altogether, and p681h, which substitutes yet another amino acid, histidine, for one called proline at chain-link 681. 

The double-deletion attracted the researchers’ attention for several reasons, not the least being that it was also found in a viral variant which afflicted some farmed mink in Denmark in November, causing worries about an animal reservoir of the disease developing. 

The substitution is reckoned significant because it is at one end of a part of the protein called the s1/s2 furin-cleavage site (links 681-688), which helps activate spike in preparation for its encounter with the target cell. 

This site is absent from the spike proteins of related coronaviruses, such as the original sars, and may be one reason why sars-cov-2 is so infective.

The South African variant, 501.v2, has only three meaningful mutations, and all are in spike’s receptor-binding domain. Besides n501y, they are k417n and e484k (k and e are amino acids called lysine and glutamic acid). These two other links are now the subject of intense scrutiny.

Even three meaningful mutations is quite a lot for a variant to have. Just one would be more usual. The 17 found in b.1.1.7 therefore constitute a huge anomaly. How this plethora of changes came together in a single virus is thus the second question which needs an answer.

The authors of the cog-uk paper have a suggestion. This is that, rather than being a chance accumulation of changes, b.1.1.7 might itself be the consequence of an evolutionary process—but one that happened in a single human being rather than a population. 

They observe that some people develop chronic covid-19 infections because their immune systems do not work properly and so cannot clear the infection. These unfortunates, they hypothesise, may act as incubators for novel viral variants.

The theory goes like this. At first, such a patient’s lack of natural immunity relaxes pressure on the virus, permitting the multiplication of mutations which would otherwise be culled by the immune system. 

However, treatment for chronic covid-19 often involves what is known as convalescent plasma. 

This is serum gathered from recovered covid patients, which is therefore rich in antibodies against sars-cov-2. As a therapy, that approach frequently works. But administering such a cocktail of antibodies applies a strong selection pressure to what is now a diverse viral population in the patient’s body. 

This, the cog-uk researchers reckon, may result in the success of mutational combinations which would not otherwise have seen the light of day. It is possible that b.1.1.7 is one of these.

The answer to the third question—whether either new variant will resist the vaccines now being rolled out—is “probably not”. It would be a long-odds coincidence if mutations which spread in the absence of a vaccine nevertheless protected the virus carrying them from the immune response raised by that vaccine.

This is no guarantee for the future, though. The swift emergence of these two variants shows evolution’s power. 

If there is a combination of mutations that can get around the immune response which a vaccine induces, then there is a fair chance that nature will find it.

Brazil and the EU: The Value of Going Green

Environmental concerns over the Amazon serve geostrategic purposes.

By: Allison Fedirka


Representatives from Brazil and the European Union will meet next month to discuss an environmental addendum for the Mercosur-EU free trade agreement, without which the deal will not be ratified, or so says Europe. 

Specifically, the EU wants Mercosur members – that is, Brazil – to reinforce commitments to the environment, climate and sustainable development. At the heart of the issue is the Amazon basin, an enormous untamed region filled with biodiversity and natural resources. 

For both Brazil and the EU, the future of the Amazon ties into economic necessities and developments critical to their future.

The significance of EU-Mercosur trade has changed since initial talks started 20 years ago, when the end of the Cold War heralded a future of healthy, robust regional blocs meant to prop up a new, multipolar world. But now it’s not so clear cut. The EU grew from 15 members to 27. 

Brazil became the powerhouse in Mercosur as Argentina spent the better part of the post-Cold War era tending to its sluggish economy. This is to say nothing of how the global economy has since been shaped by financial crises, a pandemic, trade wars, sanctions and so on.

This is why the environmental aspects of the FTA are so important. The two sides already have healthy trade ties: The EU is Mercosur’s second largest trading partner after China and is its top source of foreign investment. 

From 2000 to 2017, the accumulated stock of EU investment in Mercosur grew from 130 billion euros to 365 billion euros ($160 billion to $445 billion). But how their ties shape up going forward will depend on how they pursue geostrategic agendas that intersect with environmental and climate concerns.

For Brazil

From Brazil’s perspective, the Amazon represents a challenge to its cohesion and national defense. 

A north-south socio-economic divide has been one of the country’s defining features since the second half of the 19th century. Wealth, resources and development have historically been concentrated in the south; the north, which includes the Amazon, lagged behind. 

This is a problem for a central government whose wants and needs are not shared by a large portion of its citizens. The Brazilian government has thus regularly sought out strategies and projects to help decrease the socio-economic gap between the north and south.

For example, in 1953 the government introduced the concept of the Legal Amazon to group together an area of the country that historically shared similar political, economic and social challenges. 

The idea was that creating a subregion would make it easier for the government to plan and promote economic development. The Legal Amazon now includes 25 million Brazilians and covers 61 percent of the country’s territory (about 5.2 million square kilometers). 



On matters of national defense, the Amazon is a series of security problems for the central government. 

The length, impermeability, distance from the country’s core and lack of connectivity with the rest of Brazil make it nearly impossible for the Brazilian military to physically enforce border controls. 

Brazil uses the military it does have in the region as a springboard for trying to integrate the region with the mainstream country. The Amazon Triangle (where the borders of Brazil, Peru and Colombia meet) is a hotbed for drug trafficking and other illicit activity, which eventually spreads to Brazil’s metropolitan areas. 

Without much of a government presence, areas such as these are vulnerable to outside influence that challenges what little control the government does have in the Legal Amazon. Finally, the region is a critical doorway for Brasilia to extend its reach into the Northern Hemisphere and to give it much-needed strategic depth.

In other words, the Amazon could be key to unlocking Brazil’s economic and geostrategic potential.

For the EU

For the European Union, the Amazon symbolizes a commitment to long-term energy, finance and infrastructure strategies. Earlier this month, Brussels finally passed its multiannual financial framework, which designates EU funding from 2021 to 2027. 

Much of the budget incorporated ideals from the Green Deal, which calls for environmentally friendly initiatives and clean energy, as well as the infrastructure modernization, sustainable financing and responsible R&D to support those efforts. 

The budget allocates 132.8 billion euros to the single market, innovation and digital, and 356.4 billion euros to natural resources and the environment, both of which directly fund initiatives in line with the Green Deal and which account for about 45 percent of the entire budget.





This being the EU, however, its members don’t all agree on the Green Deal or its mandates. The strategy promoted by the Green Deal favors Western Europe’s more developed economies. 

According to the European Environment Agency, western economies also sustain the greatest amount of economic losses per capita related to climatic change. 

The negotiations surrounding environmental components of the EU budget pitted the interests of western EU economies against eastern EU economies. The new budget puts a premium on renewables and industrial-tech activities, which are more expensive and more difficult for the less developed eastern economies to pursue. Due to the high cost of going green, these countries tend to accept more easily the continued use of cheaper fossil fuels. While EU countries cannot undo the 2021-27 budget, the proponents of the Green Deal must regularly stand by their decision lest they risk losing face and reigniting the climate debate. 

By taking up issue with the Amazon, the western, pro-Green Deal countries have a convenient PR opportunity with which they can promote their ideals without alienating the eastern economies that have little to lose from greater Amazon protection.

Jockeying for Position

Brazil and the EU remain at loggerheads because their individual economic and political priorities result in competing visions for the future of the Amazon. 

Brazil has a need to develop Amazonian territory, including using natural resources and building out infrastructure, such as hydroelectric dams. 

The EU, however, has an interest to publicly speak in favor of preservation and reduced activity. Both are motivated by fundamental needs to maintain economic and political agendas that aim to strengthen their standing in the long term, and both are trying to position themselves to achieve those ends.

Brazil is using its national sovereignty over much of the Amazon to set the rules of play. 

Earlier this month, for example, the Brazilian Senate approved a bill that allows foreigners to purchase rural land. 

Foreign land purchase has been highly regulated in Brazil; this bill merely removes certain restrictions – i.e., purchases must be less than 25 percent of the municipality. 

Acquisition of real estate in areas essential to national security or that involve certain types of nongovernmental organizations require foreign buyers to obtain the prior consent of the National Defense Council. 

The bill also specifies that any land purchase in the Amazon must have council approval. 

The central government believes that opening up rural land purchases could attract up to 50 billion reais ($9.6 billion) per year in investment that would help stimulate rural economies, create jobs and improve food supply. (Support for the bill includes the bloc led by President Jair Bolsonaro, but opponents say it creates risks to national security and to commodity production.)

Brazil also designed initiatives that focus on halting illegal activities in the Legal Amazon that leave open plans for legal economic development. 

In February, the government created the Amazon Council, which is meant to design plans and initiatives for protecting, defending and sustainably developing Brazilian forestry. 

In practice, the council would be an intermediary between the outside world and Brazil over Amazon issues. It still supports the government’s broader development and is currently proposing reforms that would allow it to control NGOs operating in the Amazon and for the Amazon Fund to use its money to support economic development. (Both have already been rejected by the Europeans.) In April, the military started Operation Green Brazil 2, which aims to crack down on illegal logging and drug trafficking in the Legal Amazon. 

Its mandate was recently extended by six months to April 2021. All of these gestures are Brazil’s attempts to demonstrate some environmental concern and appease outside demands without compromising its national agenda. 



For its part, the EU is trying to improve its negotiating position by targeting Brazil’s economy. 

Leading the charge are European Green parties, whose membership consists largely of lawmakers from France, Germany, Belgium, Austria, the Netherlands, Finland and Sweden – all developed European economies that will benefit from Green Deal initiatives. 

The EU’s PR campaign has focused heavily on mobilizing NGOs, one of Europe’s strengths, and the private sector to use financial pressure against the Brazilian government. 

Global investment funds, banks, multinationals and large Brazilian companies have threatened to divest from the country if it does not change its stance on the Amazon. 

Especially concerning is the momentum building on soybeans, one of Brazil’s most prized and valuable commodity exports. 

Food companies such as Nestle, Walmart, Tesco, McDonald’s and others have started to ask major suppliers like Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc. and Louis Dreyfus Co. to stop trading soybeans associated with deforestation in Brazil’s Cerrado region. 

The food companies have said they may refuse soy from these traders if it comes from this deforested area. The Brazilian economy has performed poorly in the past decade, and especially within the last five years. 

The country has been unable to execute much-needed structural reforms because of the COVID-19 pandemic and relies even more now on investment to spur economic growth. 

It’s vulnerable to fluctuations in European spending behavior, so threats to investment or boycotting illegally sourced goods resonate with Brazil.

The battle over the Amazon highlights the intersection of geopolitics with environmental concerns. The latter have typically been put on the back burner, partly because climate change is such a long-term issue that it’s easy to ignore (and partly because it’s financially beneficial to). 

But as climate-related issues become more important, these types of frictions will increasingly arise.

PERFECT STORMS AND FAIRY TALES

By Matthew Piepenburg


It should and will come as no surprise that fundamentals like valuation basics and sane credit levels have left the building (and securities markets) for some time.

Today, we literally invest (i.e. buy and sell) in a veritable market Twilight Zone beyond sight, sound, reason and, well…earnings, profits and cash-flow.

But that’s what happens when a central bank produces fiat money like this…


That is, gobs and gobs of printed dollars (of which the FOMC has promised more this week) keep banks artificially liquid, bond prices artificially bought/high, yields artificially repressed and thus rates (i.e. the cost of borrowing) stapled to the floor of history.

But as the Austrian School reminds, cheap debt leads to debt binging, and debt binging leads to very bad things…

Cheap Debt = Crappy Bonds & Zombie Enterprises

Smelling cheap rates, U.S. companies will borrow (i.e. binge) like this…


Corporations chase cheap debt almost as much as college kids seek discounted beer, and use it just as dangerously—i.e. to buy-back their own shares or issue dividends with borrowed dollars, make no profits and then call themselves “recovered” as their stock prices fly, literally, on borrowed wings.

Many, in fact 15%, of these debt-drunk enterprises are walking dead “zombies” who borrow at advantaged rates just to pay yesterday’s interest and have no chance at all of ever repaying the principal.

These zombies, however, are just one member of an over-all embarrassing club of U.S. corporate bond issuers, 67% of which are rated at or just a pinch above junk, high yield or levered loan status—namely the very bottom of the credit barrel.


From Bad Bonds to Inflated Stocks: Just Do the Math

But when not issuing IOU’s to stay alive, many of those same enterprises are passively riding a stock market wave above jagged rocks of broken balance sheets hidden just beneath the waterline.

And as for modern balance sheets–do they or any other rule of math and common sense even matter anymore in this new Twilight Zone?

Toward that end, I’m thinking of  those pesky items of the ancient past like earnings, profits, cash flow, book value etc.

As Doug Cass recently reminded, nearly every traditional and once-respected measure of sound stock valuation—i.e., PE ratios (27.9), Cyclically Adjusted PE multiples (32.9), Price to Earnings ratios (27.9), Price to Sales (3.0) or even Buffet’s favorite, the classic Total Market Cap to GDP (170%)—are all at record high levels of over-valuation today.

And yet buyers are crowding in for more, buying at (and chasing) frothy tops like sheep following a mad herdsman.

Speaking of mad crowds and their even madder herdsman, Citigroup is forecasting an S&P at 3800 for 2021 while JP Morgan and Kantor Fitzgerald are anticipating 20% surges from current stock valuations for the coming year–pandemics, recessions and unemployment levels be damned.

Price to What?

But let’s pause and consider (for the sake of brevity) just one of the many 100th percentile metrics of market overvaluation—the infamous price to operating earnings ratio.

It’s worth noting that current PE ratios for the S&P are now where they were just before the infamous bubble-popping of 2001 and even higher than where they stood before the great rise of 2008 made history as the Great Financial Crisis of that same year:


Look a little scary to you?

Now look even closer.

What’s particularly eerie is just how fast those ratios (i.e. metrics of gross over-payment) have climbed since the market tanked in March of this year.

Folks, it’s not as if earnings were rising by double digits because valuation was rising at the same pace.

Au contraire.

If we look at actual earnings per share data, they confirm that earnings today are where they stood in 2018 when the market was valued much lower.

This means today’s (and tomorrow’s) investors are literally riding such an optimistic high that they are openly (and likely unknowingly) paying 35% higher prices for the same companies whose earnings have not risen for the same period.

Furthermore, earnings per share data has been totally distorted by trillions in corporate stock buy-backs, which means investors are paying far more than even these staggering percentages confirm.

So, what gives? What’s going on? How did things get this crazy?

Mania and Market Psychology

In simple terms, we are witnessing a mania, and manias, like viruses, can last for a long time.

Mania’s moreover, have less to do with valuations and math—i.e. PE ratios and bond yields—and more to do with psychology, a topic absent from most Wall Street (and even Main Street) reading lists.

Looking at past manias and bubbles, we know that maniacal investors always pile in together on the buy-side, ignoring valuation sobriety until they are forced to—i.e. when it’s too late.

We also know that market manias often have no correlation to underlying economic conditions, and thus markets can thrive while economies (as now) are literally gasping for air.

In fact, manias typically gain speed rather than tire out as markets pierce resistance levels and reach new, record-highs, seemingly, with each weekly headline and despite every red flag from traditional valuation metrics.

Confidence follows headlines, and headlines create crowds, and crowds follow each other (and the sell-side)—right up to, and then eventually, right over a market cliff.

This is true of all bubbles and maniacal markets, from Revolutionary France (1793), the roaring 20’s (1929), the bloated Nikkei (1989), the irrational NASDAQ (2000), or the sub-prime S&P (2008).

Overestimating Skill While Underestimating Humility

Psychologists, for example, would remind that a cognitive bias often occurs in bull markets wherein individuals of a low ability at a given skill begin to overestimate their abilities due simply to an “inability to face their inability.”

This often takes place when investors are enjoying a trend (or mania) rather than genius or fair price discovery.

The fancy lads call this psychological phenomenon the Dunning-Kruger Affect, and I’d contend that many self-smug Fed Chairs and wealth advisors, as well as many investors, are suffering from it now as they passively enjoy (and take credit for) a maniacal market rise.

This disease of false confidence spurred by false (i.e. artificial markets) is particularly the case for Janet Yellen, who is now heading from the Fed to the Treasury with much applause.

Ah, how the ironies do abound. When it comes to monetary discipline, Yellen at the Treasury makes as much sense as Madoff at the SEC.

And no, this time is not different. It’s worse.

The level of current mania (Tesla to Bitcoin) surpasses prior bubbles, and the depth of the debt and economic (as well as political) weakness beneath it is now greater than prior recessions.

With global debt now at an unprecedented $280T and combined corporate, household and consumer debt in the U.S. now at $80T, this in no time for losing one’s mind (and portfolio) to the buzz of yet another Fed-driven mania.

In short, the Twilight Zone market is colliding with a Perfect Storm (psychological, financial, social, political).

Mean Reversion—The Great Humbler

All markets revert to the mean. It’s a law of markets as real and natural as gravity is to the laws of physics.

And math, as well as natural market forces, like the laws of physics, still matter.

Together, these forces stand in the background rubbing their hands as maniacal investors go all-in to chase a market top that would make the Matterhorn blush.

By example, math reminds us that the median PE ratio for the S&P is 17. Today, that PE ratio is a jaw-dropping 30.

Once (not if) this market reverts to its mean (as all markets do), this would place the S&P closer to 1500 or 2,000, where the real value investors can start buying the bottoms rather than these dangerous tops, now poised to needle-peak further before they tank.


More Fiat Dope, More Addiction & More Debased Currencies

But as we also know, and after years of addiction to Fed “accommodation,” whenever and however markets begin their next implosion (typically on some headline scandal or event), the Fed will crank out the money printers and deliver more fiat dope to markets suffering “the needle chill.”

Global money supply, now at a staggering $6.5T, is only going to shoot higher, as central banks shoot more steroids into a system which they helped corrupt, debasing currencies with blind elan as markets inflate on the backs of fiat dollars and unpayable, rotten debt.

As always, all rivers and informed market conversations eventually turn toward physical gold, often castigated as a “barbarous relic” in times of market mania and then no longer available/affordable when desperately needed in times of market pain.

In short, those who were once chasing tops suddenly find themselves looking for a safe and precious place to land when there’s nowhere left to hide.

Three Little Piggies & The Big Bad Wolf

Such cycles remind us of our youth and the tale of the three little piggies and the big, bad wolf.

In that childhood fairy tale, two piggies, enjoying all the blissful ignorance of the Dunning-Kruger Affect, are too busy playing to worry about a big, bad wolf around the corner.

Thus, they build their huts of straw or mud while the third little piggy, all too aware of that big, bad wolf, diligently builds his home of bricks.

When the wolf comes, guess which hut is left standing?

Of course, the same is true of weak and strong portfolios and the big, bad market wolves of debt, over-valuation and risk asset bubbles: Some investors are prepared, but most are sitting on straw and mud.

When risk assets are slaughtered by the wolf’s fangs of 1) needle-sharp debt, 2) gross equity over-valuation and 3) fatal currency debasing policies like “unlimited QE,” only those investors who built their portfolios on a foundation of physical gold are left standing.

Why?

Precious Metals Don’t Bow to the Wolves

Because unlike the straw and mud of fiat currencies and dangerously overvalued stocks and bonds, gold rises strong (rather than falls into dust) when the market wolf huffs and puffs and blows bad portfolios down.

Smart money, like just about anything smart, including that third little piggy above, are by nature a smaller circle, a more far-sighted minority, and thus think more of steady wealth preservation than easy wealth creation.

In short, the smart money understands the difference between staying rich and getting rich.

Physical gold, as a timeless (rather than trendy or passẻ) instrument of wealth preservation, serves as the historically-confirmed and surest way to ensure one’s wealth against the ravages of currency debasement.

For those who refuse to see such facts, the following chart is worth repeating as much as possible, and makes such warnings obvious rather than theoretical:


And so, as central bankers and consensus-thinking investors maniacally continue to build markets, currencies and portfolios of straw and mud, will you be joining that crowd or looking for some gold bricks upon which to preserve your wealth? 

A Marshall Plan for the Planet

The climate crisis has taken a back seat to COVID-19 this year, but prospects for bold international action to tackle global warming in 2021 are much more encouraging. There is no reason why the world cannot apply the ingenuity and agility it has shown during the pandemic to combat climate change while there is still time.

Paul Polman



LONDON – In a year dominated by COVID-19, it’s perhaps understandable that we’ve neglected the most profound, existential crisis we face: runaway climate change. 

But we must quickly make up for lost time, before it’s too late.

The world received the blessings of cutting-edge science this holiday season with the record-fast development of effective COVID-19 vaccines that promise to end a pandemic that has so far killed more than 1.7 million people and caused the worst economic crisis in generations. 

But the rush by rich-country governments to secure enough doses for their own citizens threatens to prolong the agony for the developing world.

Fortunately, the prospects for effective international climate action in 2021 already look much better than they did a few months ago. 

For starters, as soon as President-elect Joe Biden takes office in January, the United States will rejoin the 2015 Paris climate agreement – the historic protocol that aims to limit global warming to well below 2°C, and preferably to 1.5°C, relative to pre-industrial levels.

This will send an unmistakable signal that the world’s biggest economy is again serious about accelerating its transition to net-zero carbon-dioxide emissions, and will build on China’s recent commitment to become carbon neutral before 2060. 

These two superpowers will define the twenty-first century, so the prospect of their enhanced climate collaboration provides real cause for optimism.

Likewise, the European Union is pressing ahead with its ambitious European Green Deal and aims to be climate neutral by 2050. And UK Prime Minister Boris Johnson’s ten-point plan for a Green Industrial Revolution also points the way ahead. 

Energy efficiency and diversification, sustainable infrastructure and housing, renewable power generation, green technologies, carbon capture and storage, and nature-based solutions all provide a clear pathway to a net-zero future. 

This is the “Marshall Plan for the Planet” we urgently need, and we must now double down on achieving a true green recovery.

It is encouraging to see the international community mobilizing. 

Next year, China will play a pivotal role in helping to protect and restore nature as the host of the United Nations Biodiversity Conference (COP15). 

The meeting comes at a critical time: one million species are threatened with extinction, and the destruction of our oceans, forests, peatlands, and mangroves – which all act as essential carbon sinks – has regrettably become routine business.

Valued at $125 trillion a year, our natural capital and biodiversity are the real source of our wealth. Or, as the economist Herman Daly argues, “the economy is a wholly owned subsidiary of the environment, not the reverse.” 

That’s why Business for Nature – a diverse group of more than 600 firms and 50 partner organizations – is advocating more ambitious government and corporate action to provide nature with the safety net it needs to flourish.

Next year’s UN Food Systems and Nutrition for Growth summits will also be important opportunities to raise collective ambition. 

We urgently need to repurpose agricultural subsidies to deliver better outcomes for people, climate, and nature. 

In addition, we must shift public food procurement toward plant-based diets and away from highly processed foods, deploy more productive and regenerative agricultural practices, support rural livelihoods, and commit to ambitious targets for reducing food loss and waste. 

Given that 25% of global CO2 emissions are linked to land use, we should not underestimate the contribution that transforming food systems can make in the fight against climate change.

But perhaps the most critical international meeting in 2021 will be November’s UN climate conference (COP26) in Glasgow. 

Governments must boost their carbon-cutting measures in a race to the top that helps the world achieve net-zero emissions by 2050 – at the latest. 

Crucially, COP26 must also uphold rich countries’ commitment to provide poorer economies with the climate finance they need to manage extreme weather hazards – storms, droughts, and wildfires – which are increasing in prevalence and holding back their development and growth.

That said, decisive climate action cannot be the responsibility of governments alone. 

Business must also play its part by setting science-based emission-reduction targets, improving energy efficiency, enhancing climate reporting and disclosures, and eliminating deforestation from supply chains.

The We Mean Business coalition is a great example of joint private-sector action. 

Companies with a combined market capitalization of over $24 trillion are working together to drive more ambitious climate policies and accelerate the transition to a zero-carbon economy. 

Similarly, the Task Force on Climate-related Financial Disclosures is helping firms better calculate the risks and opportunities of climate change, thereby making it easier for investors to support sustainable businesses. 

This is creating a domino effect that is helping to move financial markets in a greener direction.

The pandemic has led to a temporary decrease in greenhouse-gas emissions and a resurgence of nature. But a brief reprieve for the planet is no substitute for a coherent global climate strategy. 

All told, 2021 promises to be a super-year for climate action, with the stars aligning for a cleaner and more sustainable future. 

We must seize the opportunity while we still can.


Paul Polman is Chair of the Food and Land Use Coalition.