How did it all turn out?
“Hopes unfulfilled but not buried” said Antonio Guterres the UN Secretary General. He went on “The COP26 deal is a compromise reflecting the interests contradictions and state of political will in the world today. It’s an important step but it’s not enough. It’s time to go into emergency mode. The climate battle is the fight of our lives and that fight must be won”
What are the negative elements?
The need was for the Nationally Determined Contributions to meet the 1.5 degree limit to temperature and that was not achieved. The pledges leave us somewhere around 1.8 degrees. What we do have is a commitment to come back next year at COP27 to revise these to be more ambitious to meet 1.5 degrees. Let us hope that nations step up to this requirement.
Secondly, whilst the Glasgow Climate Pact is the first ever climate deal to explicitly plan to reduce coal, the worst fossil fuel for greenhouse gases, the draft proposal was prepared stating that there would be a phase out of coal and this was, at the last minute, rephrased to “phase down” and gave specifically India and China a let out. Both this outcome and the fact that the deal was renegotiated at the last minute left Alok Sharma the COP President choking away tears at this manoeuvring.
For balance, I should state that the UN’s Net Zero Asset Owner Alliance, responsible for $10 trillion in assets, committed to phase out most thermal coal assets by 2030 for industrialized countries and worldwide by 2040. Thirty-three GFANZ members are now part of the Powering Past Coal Alliance, with 11 new firms joining at COP26.
More than 40 countries have committed to shift away from coal, in pledges made at the COP26 climate summit.
The final deal promises more funds for developing countries - to help them adapt to climate impacts.
Money talks and this is another area where the nations had not met the target set in Paris - which was that the richer countries agreed that the poorer countries would receive at least $100bn (£75bn) a year from 2020, from public and private sources, to help them cut emissions and cope with the impacts of the climate crisis. But by 2019, the latest year for which data is available, only $80bn had flowed.
Developing countries are angered by this, which was reflected at the talks, and have now been promised that increases will follow in the next five years that will bring the finance for the next five years to $500bn. Crucially, they also want more of the cash to be spent on assisting in adaptation, rather than just cutting emissions. In the end, the text agreed to double the proportion of climate finance going to adaptation.
Let’s look at the good elements - 1.5 degrees is still alive as an aim. The Glasgow Climate Pact has put science and nature front and centre, and galvanized global efforts behind 1.5°C, with a focus on the 45% emissions cuts needed this decade by 2030. It has also called for doubling adaptation finance and acknowledged the importance of addressing loss and damage also known as reparations, an initial step forward for the most climate-vulnerable communities.
Glasgow has helped to bring the non-state actor and government agendas closer together, focused on the specific solutions needed to decarbonise key sectors and build resilience. At COP26, we have seen positively reinforcing actions by sub-national governments, industry, and finance. On the Monday after COP, the FT headline suggested that business is disappointed at the lack of government ambition and so these non-state actors will be part of the drive to push for more pledges and commitment in the years to come.
Let’s see how this looks
• there has been a breakthrough commitment to end deforestation, with 133 world leaders responsible for around 90% of the world’s forests promising to end and reverse deforestation by 2030, plus 33 financial institutions with $8.7 trillion in assets under management, committing to tackle deforestation in the 2020s.
• a major agreement on methane speeds up our potential for deep short-term cuts to deliver on climate goals, as one of the most effective immediate actions to reduce near-term global warming.
• the end of the combustion engine is in sight, as national governments, cities, states and major businesses have agreed to end the sale of internal combustion engines by 2035 in leading markets.
• mainstream private finance is publicly committed to transforming the economy for net zero. Through the Glasgow Financial Alliance for Net Zero, over 450 firms across 45 countries are now committed to set robust, near-term science-based targets to halve their fair share of emissions by 2030 This accounts for over $130 trln dollars.
• nearly 8,000 non-state actors have committed to halving emissions by 2030 as part of Race to Zero, as the UN Climate Champions launch a 5-year plan to deepen engagement with regional stakeholders, enhance the implementation of non-state actors’ commitments, and develop tools for accountability across mitigation, finance and adaptation.
The technical groundwork has been laid to enable enforcement of sustainability standards and resilience actions, with the launch of International Sustainability Standards Board promoted by the IFRS. This is something that the City of London has been keen to support and will be essential to stop claims of greening being only superficial or inaccurate
• A new metrics framework for measuring resilience, for the first time, allows cities, regions, businesses and investors to measure the progress of their work in building resilience to climate change for the 4 billion people most at risk by 2030.
• In the UK Rishi Sunak announced that he would be making net zero transition plans mandatory for UK financial institutions and listed companies by 2023.
A lot has happened and I want to stay positive. I believe that finance has a big role to play both to urge Governments to do more and to ensure the transition works across all nations. And it needs to work fairly and equitably.
Mark Carney the UN and UK envoy said “People will no longer tolerate worthy statements followed by futile gestures. They won’t settle for governments making announcements at summits that they don’t meet at home, or companies that speak green but don’t act.That’s why we’ve worked to transform the heart of finance.”
That work is still in process with the City Corporation and the Green Finance Institute alongside Government and businesses.