COP26: Clouds and silver linings

David Robinson

David Robinson, Senior Research Fellow, OCP

In view of the climate emergency we face and the short time we have to address it, no single COP outcome will ever be sufficient to meet the challenge. COP26 is no exception to this rule. Indeed, the sense of urgency has never been greater following the IPCC report in August that gave the world less than ten years to halve global emissions to have a reasonable chance of avoiding climate catastrophe. A process that requires consensus among 200 countries could never be radical enough or move quickly enough. The inevitable compromises and slowness of the process are bound to disappoint almost everyone, but especially the young, whose future is in play, and the people living in the areas most vulnerable to the effects of climate change who have no responsibility for causing it. The sense of injustice is especially acute following the Covid-19 pandemic and the absence of solidarity related to vaccine distribution.

Furthermore, a global treaty – like the Paris Agreement (PA) – that relies on voluntary pledges (Nationally Determined Contributions, NDCs) to mitigate emissions growth is always going to disappoint if one compares those pledges with what the science requires. National self-interest, special corporate or political interests and the tendency to free-ride (let others pay) will almost always make global agreements weaker than they need to be to secure global public goods. At COP26, the power of a few major emitters (US, China, India) to weaken the global pact to phase out coal is an illustration of the problem of reaching ambitious agreements. The unwillingness of the wealthy countries to compensate the poorest for losses and damages was also depressingly predictable. But the failure of the wealthy countries to meet their 2009 commitment to funnel $100 billion/year to the developing countries by 2020 was even worse since it illustrated the failure to deliver on pledges.  The sense of disappointment and injustice on the part of developing countries is particularly problematic because it undermines the support that is essential to meeting the global crises of climate change and poverty. In particular, failure to pursue sustainable economic development in the global south will lead to emissions growth that overwhelms reductions in the global north, accelerating climate change and contributing to geopolitical insecurity. 

Many observers expect too much from a COP.  Negotiators come to the COP with a clear idea of what they can agree to and what are the red lines. When Ministers arrive in the second week, they too have clear instructions. There is always some room for negotiations, but not nearly as much as most people seem to think. The logic of the PA is that pressure will build over time on governments to enhance the ambition of their national pledges, but the latter will always be limited by national interests and reluctance to bear the burden. This almost ensures that COPs will disappoint those who expect major breakthroughs.

Even positive news at COP26 is open to question. The strength of pledges to cut emissions is undermined by the fact that key countries do not sign them, most notably a ‘Powering Past Coal’ alliance that leaves out China, India and other major coal producers.  Commitments to climate neutrality in 30-50 years ring hollow when not accompanied by detailed transition plans. Add to that the serious doubts about whether the net-zero pledges by governments and companies are greenwashing and whether there is any way to ensure compliance.

In spite of the very legitimate reasons to be alarmed at the inability of COPs – and COP26 in particular – to address the global climate crisis and the underlying problems of injustice, there are reasons to be encouraged and to continue to fight for more ambition. To begin, COP26 reflects and will accelerate the process of de-carbonization. The dramatic decline in the cost of renewables, batteries and electric vehicles confirms the potential for policy support, innovation, competition and scale to change the game. The pressure on the fossil fuel industry will intensify as global finance increasingly focuses on green energy. Stranded fossil fuel assets are inevitable. Although the world will continue to rely on fossil fuels for some time, the hydrocarbon industry is acutely aware that their future depends now on becoming part of the solution. That is why investment in oil and gas has been falling and why investment in renewables has been growing quickly (although not nearly fast enough).

Second, the many ambitious pledges by State and non-State actors are a reflection of the pressures they face to act and the fact that action is now increasingly attractive from an economic perspective. In particular, the agreement signed by 100 countries to reduce methane emissions by 30% by 2030 will have an important impact on greenhouse gas emissions, provided the commitments are realized. Likewise, COP26 saw governments, cities, major automakers, financial institutions and others sign on to an agreement to transition to 100% zero emission sales of new cars and vans by 2040 globally and by 2035 in “leading markets”. Although these pledges do not include all key countries, they are a sign of increasing ambition from State and non-State actors. Indeed, it is fair to say that we are witnessing competition among major regional political actors and industrial groups to be the first to get to net zero emissions and to develop the technologies and business models of the future. 

Third, COP26 has begun to address issues that had previously been ignored or inadequately treated. The Paris Agreement does not refer at all to energy. But under the final Glasgow Climate Pact, 196 countries agree to “accelerating efforts towards the phase-down of unabated coal power and phase-out inefficient fossil fuel subsidies”; definitely not as bold as most countries demanded, but certainly progress. COP26 has also anchored permanently the ocean in the multilateral climate change regime.

Fourth, progress is especially evident in the engagement of the private financial sector. Over 400 of the world’s largest financial institutions – managing over $120 trillion – signed the Glasgow Financial Alliance for Net Zero. These companies are not promising to invest all their assets in net zero activities, but they have agreed to use science-based guidelines to reach net-zero emissions by 2050, cover all emission scopes, include 2030 interim target settings and commit to transparent reporting and accounting in line with Race to Zero criteria. This is a game changer. When banks hear that the world must invest $4 trillion a year to address climate change, they now begin to calculate how many deals that amounts to for them.

Fifth, COP26 has finalized the rule book for the Paris Agreement, in particular on transparency, to ensure that signatories make pledges that can be verified, on a common time frame that leads to greater ambition, and on a carbon trading framework that should enable global decarbonization at lower cost. The rules are far from perfect, but they provide a necessary framework; like a chessboard with rules that allow this critical global game of chess to be played.

Sixth, China and the US reached an unexpected agreement at the end of COP26 to work more closely to combat climate change with urgency this decade. Although the agreement is light on details, it does state that both countries will work to lower carbon and methane emissions and employ technologies such as carbon capture and sequestration. As the two largest emitters, this agreement has the potential to encourage other countries to be more ambitious, much as the US-China agreement in 2015 was instrumental in making the Paris Agreement possible.

Seventh, there was some limited progress on finance commitments. Developed countries agreed to double their adaptation finance from 2019, by 2025; the Glasgow Dialogue between parties on loss and damage will convene from 2022 to 2024; and the final text urges developed countries to fully deliver on the $100 billion goal “urgently” through 2025.

Eighth, going into the COP, the UN estimated that NDCs would lead to 2.7ºC of global warming by 2100, well below the estimates above 3ºC following the PA. Taking account of net zero national pledges, new NDCs before and at the COP and other commitments (especially the Global Methane Pledge), estimates of global warming by 2100 could now range from 1.8ºC to 2.º4C, assuming the pledges are fully implemented. Certainly not good enough, but definitely progress towards the goal to limit warming to 1.5ºC.

Finally, the most positive message from COP26 is the evidence that citizen activism matters and can have an effect, especially in countries with democratic systems. Of course, activists will be disappointed with the COP outcome; it would never deliver what they demand. On the other hand, their actions before the COP have an impact, as does their presence at the COP. We have witnessed this power in successful court cases brought by young people against companies and governments, and through action that has led to more climate-friendly policy and corporate decisions. Although activists are not actively involved in negotiations at COP26, their presence inside the venue and outside (and the sound of helicopters controlling their movements) is a constant reminder to all state and non-state participants at the COP and to the world at large that they are watching and will never be silenced or satisfied.

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