Takeaways from the COP26 Climate Summit
Environment Policy Brief #128 | By: Jacob Morton | November 30, 2021
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At the UN’s COP26 (Conference of the Parties) Climate Summit earlier this month, representatives from 197 nations gathered in Glasgow, Scotland with the goal of collectively accelerating global efforts towards achieving the climate goals of the Paris Agreement and the UN Framework Convention on Climate Change. The Paris Agreement was signed back in 2015, but most countries have thus far failed to live up to their climate action promises. The focus of the conference centered around three major pillars of climate change action: Adaptation, Finance, and Mitigation.
Adaptation focuses on the needs of countries and the solutions necessary for the world to cope with the humanitarian and economic impacts of climate change. From rising sea levels to more intense flooding and prolonged droughts, these issues held particular emphasis and claimed the most attention at the Summit. A working group was formed to define a collective goal for global adaptation, which would identify the needs and potential solutions for addressing the impacts of climate change that are already being felt by many countries.
Finance focuses on the financial investments necessary to fuel the global climate response effort. From adapting to the impacts of climate change, to mitigating its severity by limiting global warming to a 1.5-degrees Celsius increase, all countries will have to invest significant resources into this effort and wealthier countries will have to foot most of the bill. The majority of Parties present at the Summit agreed to at least double finance for adaptation, and the pledge of developed countries to provide $100 billion annually to developing countries was reaffirmed.
An original pledge of $100 billion was made back in 2009, with an equivalent annually occurring pledge to begin in 2020 but has never been met. The closest attempt was in 2019, when developed countries collectively provided $80 billion of climate-related funding to developing countries. That funding, however, came in the form of loans rather than grants, providing little real relief to the countries suffering the most from a problem largely created by the developed world. Similar to the goal-setting strategy for Adaptation, members of the Summit kicked off a “process to define the new global goal on finance.”
Mitigation focuses on preventing climate change (or the degree of its impact) as much as is still possible. Though climate change is already happening, and its impacts are already being felt, the goal of mitigation is to reduce its severity by ensuring we reduce global CO2 emissions enough to prevent the average global temperature from rising more than 1.5 ℃. To the Summit’s credit, the world’s top emitters, including China, the US, and India among others, agreed to continue working to accelerate their reduction of emissions to levels in accordance with the Paris Agreement, and a worldwide consensus to transition away from fossil fuels was reached (though India would only agree to “phase down” coal production, not “phase out”). However, agreement to reduce global emissions by 45% by 2030 (required to limit warming to 1.5℃ by 2100) was not reached, leaving many unsatisfied with the summit and critical that the wealthiest, most polluting countries are not acting fast enough.
Though an emissions reduction timeline that lives up to the Paris Agreement’s expectations was not agreed upon, the Summit did achieve the significant and long overdue goal of finalizing the “Paris Rulebook,” an agreed upon set of “rules and guidelines detailing how the Paris Agreement will operate in practice.” Several components of the rulebook have remained in debate for the past six years, including how to govern carbon markets (Article 6 of the rulebook). Article 6 was the last component still being debated and has implications for how countries are rewarded for meeting and overachieving Paris Agreement goals, such as emissions reductions or forest expansion, as well as how private industry is rewarded and incentivized through the sale of carbon credits. How countries measure and record their progress was also agreed upon, providing a new framework for full transparency.
Having reached these agreements in Glasgow, will now give greater “certainty and predictability to both market and non-market approaches in support of mitigation as well as adaptation.” Countries will be better able to create and commit to climate action plans because they now know what they can gain from their actions. Likewise, private industry can now consider the potential returns of including climate action in their market decisions, incentivizing the private sector to play a larger role in the global climate effort.
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The Summit made noteworthy gains in other areas as well:
- The United States announced its adoption of substantial new measures to cut methane emissions from US oil and gas production. The US Methane Emissions Reduction Plan claims to redouble government efforts to “dramatically reduce US methane emissions” (at least 30% by 2030), create union-friendly jobs, and “promote U.S. innovation and manufacturing of critical new technologies.” Over 100 countries present at the Summit agreed to reduce methane emissions by 30% by 2030.
- Membership in the coalition, “Glasgow Financial Alliance for Net Zero (GFANZ)” grew to “over 450 firms representing $130 trillion in private capital.” Private asset owners have become increasingly important drivers of change via their investment power (voting with their dollar) through climate-focused initiatives, such as the Net-Zero Asset Owner Alliance, an international group of institutional investors committed to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050.
- More than 30 financial institutions announced a commitment to address deforestation, by using the influence of their collective investment power to eliminate deforestation by the beef, soy, palm oil, and pulp and paper industries. Additionally, a coalition of countries, including Brazil and Russia agreed to halt deforestation by 2030.
- Leading insurance companies acknowledged climate change as the “ultimate systemic risk,” calling for an orderly transition to a global low-carbon economy. The Association of British Insurers argued that if the transition is disorderly, “the value of many of these assets in which insurers invest will fall with little warning.”
Collectively, these achievements reflect what could be considered the most impactful result of the COP26 Summit: that the private sector now has a strong and established seat at the table.
Following the conclusion of the COP26 Summit, the UN expressed enthusiasm for what was accomplished, proposing that world leaders “[departed] Glasgow with clarity on the work that needs to be done, more robust and effective instruments to achieve it, and a heightened commitment to promote climate action —and to do so more quickly— in every area.” Patricia Espinosa, Executive Secretary of UN Climate Change, congratulated all Parties on finalizing the “Paris Rulebook,” saying, “This is an excellent achievement! It means that the Paris Agreement can now function fully for the benefit of all, now and in the future.”
Despite the select victories, many observers from the outside, as well as those directly involved agree that much more must be done to stave off the worst of the looming climate disaster. Alok Sharma, UK President of the COP26 says, “We can now say with credibility that we have kept 1.5 degrees alive. But its pulse is weak, and it will only survive if we keep our promises and translate commitments into rapid action.” More critical voices took a harsher stance during the summit, many calling out the hypocrisy of the Parties involved. Ani Dasgupta, President of the World Resources Institute, said in a statement, “It is inexcusable that developed countries failed to meet their commitment to deliver $100 billion annually starting in 2020 even as they provide hundreds of billions of dollars in subsidies for fossil fuels each year.”
According to an analysis by the International Energy Agency (IEA), if all countries follow through on their current commitments, we would be on track to maintain an average global temperature increase of 1.8 ℃ by the end of the century.
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(Paris Rule Book – click or tap to enlarge)
However, skeptics, including the American investment management firm PIMCO, are quick to note that the IEA’s analysis “is based on countries fully implementing their announced commitments and pledges, which is highly unlikely,” and some climate scientists are predicting temperature increases between 2 – 4℃. Based on what countries are currently doing on the ground, the world is headed toward 2.7℃ of warming by 2100, according to NPR.
Though the results of COP26 feel to many like a Deja vu of empty promises, the Summit, at the very least, provided a much-needed update to the global climate action plan, and established a precedent for all countries to update their individual plans every 5 years, following a more immediate request for updated plans by 2022. Though that agreement (and most others made at the Summit) is not legally binding, some climate experts say, “it at least keeps political pressure on major emitters in the near-term.”
Additionally, the creation of a universal and transparent data tracking system to monitor each country’s progress will provide greater transparency and accountability. The finalizing of the “Paris Rulebook” will provide greater clarity and incentive for both the public and private sectors to invest in climate action. And perhaps the most promising takeaway from the Summit, is the increased engagement overall by the private sector, something that is vital to achieving the goals and timeline set forth in the Paris Agreement.
- World Resources Institute (wri.org): WRI is a global nonprofit organization that works with leaders in government, business and civil society to research, design, and carry out practical solutions that simultaneously improve people’s lives and ensure nature can thrive.
- Climate Crisis Advisory Group (ccag.earth): The Climate Crisis Advisory Group (CCAG) is an independent group of scientists which advises on climate change and biodiversity, headed by Sir David King. The group is funded by the Centre for Climate Repair. Its goal is to “provide the global public with regular analysis about efforts to tackle the global heating and biodiversity crises.”
- UNFCCC Secretariat (UNFCCC): The UNFCCC secretariat (UN Climate Change) is the United Nations entity tasked with supporting the global response to the threat of climate change. UNFCCC stands for United Nations Framework Convention on Climate Change. The Convention has near universal membership (197 Parties) and is the parent treaty of the 2015 Paris Agreement.
Birol, F. (2021, November 4). Cop26 climate pledges could help limit global warming to 1.8 °C, but implementing them will be the key. IEA. Retrieved November 26, 2021, from https://www.iea.org/commentaries/cop26-climate-pledges-could-help-limit-global-warming-to-1-8-c-but-implementing-them-will-be-the-key
Cogswell, N., & Dagnet, Y. (2019, June 13). Why does the Paris Climate Agreement need a rulebook? 7 questions and answers. World Resources Institute. Retrieved November 26, 2021, from https://www.wri.org/insights/why-does-paris-climate-agreement-need-rulebook-7-questions-and-answers
Mather, S. A., & Power, G. (2021, October 1). Climate and COP26: Takeaways from two delegates. Pacific Investment Management Company LLC. Retrieved November 26, 2021, from https://www.pimco.com/en-us/insights/viewpoints/climate-and-cop26-takeaways-from-two-delegates/
Sommer, L. (2021, November 13). Here’s what world leaders agreed to – and what they didn’t – at the U.N. climate summit. NPR. Retrieved November 26, 2021, from https://www.npr.org/2021/11/13/1055542738/cop26-climate-summit-final-decision
UNFCCC Press Office. (2021, November 13). COP26 Reaches Consensus on Key Actions to Address Climate Change. Unfccc.int. Retrieved November 26, 2021, from https://unfccc.int/news/cop26-reaches-consensus-on-key-actions-to-address-climate-change
The United States Government. (2021, November 2). Fact sheet: President Biden tackles methane emissions, Spurs innovations, and supports sustainable agriculture to build a clean energy economy and create jobs. The White House. Retrieved November 26, 2021, from https://www.whitehouse.gov/briefing-room/statements-releases/2021/11/02/fact-sheet-president-biden-tackles-methane-emissions-spurs-innovations-and-supports-sustainable-agriculture-to-build-a-clean-energy-economy-and-create-jobs/