What is COP26?
In November 2021, Glasgow hosted the 26th Annual COP (Conference of the Parties) event. This summit was organised by the UN to bring together world leaders to discuss climate change. Since the first event, global warming has become a far greater threat to our existence, and the need for change has grown exponentially. Therefore, this year’s summit was billed as one of the last remaining opportunities to make meaningful change and save our planet.
With every passing day, the scientific evidence surrounding climate change becomes more concrete and harrowing. Each natural disaster is attributed to rising global temperatures, and the calls for leaders to act are growing louder and more desperate. There has never been more attention around this subject than now. The eyes and ears of the world waited with anticipation to see what our most powerful leaders would do to protect us from this existential crisis.
The overall objective is to curb rising temperatures, which will be achieved by reaching net-zero across the globe. Net-zero means that greenhouse gases entering the atmosphere are balanced out by gases being removed from the atmosphere. There is still a long way to go before this can be declared, but we have no choice.
What was the state of play before COP26?
Over the years, the most meaningful output from COP events has been the Paris Agreement. This was made during COP21 in 2015 and was signed by two hundred countries. The key contents of the treaty are:
This treaty was seen as significant because it demonstrated the ambition of leaders to make real change. However, many experts and environmentalists claimed it might be a solid starting block, but it lacks firm aims or actions.
COP26 was the first opportunity since the Paris Agreement for countries to update their plans and submit their national targets for reaching net zero.
What has come out of COP26?
Glasgow Climate Pact
As expected, the negotiating went into overtime at the end of the conference. The minute details of the pact were scrupulously debated, with countries disagreeing on certain words contained within it. Finally, two days after the scheduled end of the summit, the Glasgow Climate Pact was announced.
One part of the pact requires countries to republish climate plans by the end of 2022. Included in these plans will need to be their targets for reducing emissions and the actions they will take to achieve these targets. The first benchmark for reducing emissions will be 2030, at which point it is estimated the global greenhouse gas emissions will need to be reduced to 26.6 gigatonnes if the 1.5-degree limit is stuck to. However, estimates suggest that the measures agreed at COP26 will only reduce the global emissions to 41.9 gigatonnes by 2030 and therefore do not go far enough.
Source: BBC News
However, this is seen as a first step, and the wording of the pact ensures that plans to reduce emissions are re-visited more regularly. This leaves the door open for plans to become more ambitious as the year’s pass, but whether this happens remains to be seen.
Another part of the deal refers to the need to increase funding for developing nations to fund the required changes to their infrastructure. A previous target of $100bn per year to developing economies by 2020 was missed, and there are now calls for the funding to go even further. No specific renewed target has been set, but there will be an increase in the coming years. Many poorer nations have also asked for funding based on loss and damage. This principle allocates funding from rich countries to compensate developing countries for the damaging effect of climate change they were unable to prevent. Nothing has been agreed on this, but talks will continue in future summits.
The Glasgow Climate Pact includes the first-ever commitments to reduce coal use worldwide. This is seen as a significant step since coal has never been mentioned in such documents before. It is thought that coal consumption will need to reduce by 45% before 2030 and be completely eradicated by 2050 if the 1.5-degree target is met.
However, one disappointment in this area is that the wording was watered down during the final negotiations. The agreement is to “phase down” coal use rather than “phase-out.” This amendment was made due to dissatisfaction from mainly India and China.
US-China Climate Cooperation
This was one of the most unexpected announcements to be made during the conference. US and China are the two biggest emitters of fossil fuels globally, so their actions will significantly impact the efforts to save our planet.
Source: BBC News
As part of the cooperation, the global superpowers agreed to “recall their firm commitment to work together” to achieve the 1.5-degree target set out in the Paris Agreement. The agreement includes wide-ranging topics such as methane emissions, clean energy, and de-carbonisation. Both parties acknowledged that their nations have large differences in many respects but that their unity on climate change will be vital moving forward.
Experts have said that it is a step in the right direction, but there were strong calls for an agreement for countries to meet every year to update and improve plans. This has not been achieved at this stage, but increased cooperation between two vastly different and powerful countries is certainly a start. Overall, the declaration has been cautiously welcomed, hoping for more concrete agreements to come in the future.
Promise to end deforestation
World leaders committed to end world deforestation by 2030. This was signed by over 100 countries, including Brazil, which is significant as they are responsible for a large percentage of deforestation around the globe.
The Amazon rainforest is viewed as the ‘lungs of the Earth’, so cutting it down is hugely damaging for the environment. One of the main reasons for deforestation is to create grazing land for animals so that farmers can keep up with world demand for meat. This would make a vast difference in the fight against climate change because trees remove carbon dioxide from the atmosphere.
Agreements like this have been made in the past, with no change coming as a result. However, the funding levels (£14bn) and the number of signatories (110) are far higher this time, so there is an enhanced sense that we can expect greater impact.
Pledging, though, is just the first step. There are significant hurdles in the way of delivering on this promise. Ensuring the donations are being used effectively is challenging to say the least. Breaking the link between deforestation and consumer demand will require profound changes in public habits.
Cut methane emissions by 30%
Over 100 countries have agreed to a US proposal to reduce methane emissions by 30% before 2030. The 30% figure will be compared to 2020 emission levels. Some of the biggest emitters, such as China, Russia, and India, are yet to sign, but there are hopes that they will at a later stage.
Methane is one of the most potent greenhouse gases and contributes to a third of human-generated global warming. Whilst CO2 stays in the atmosphere for longer, the particles from Methane have a faster and longer-lasting warming effect. Therefore, many see reducing methane emissions as a method of buying more time in the fight against climate change.
The main activities leading to methane emissions are cattle farming and disposal of waste. Across the US, it is also common for Methane to leak from oil and gas rigs. This scheme aims to target these problem areas and therefore reduce overall emissions.
The coal pledge
More than 40 countries, including Poland, Vietnam, and Chile, have agreed to move away from using coal to produce energy completely. This will involve ending all investment in new coal power generation both domestically and internationally. In terms of timescales, richer nations would phase out coal power during the 2030s, with the poorer nations following suit in the 2040s. Some major banks are joining forces with the countries that signed, who have agreed to stop financing coal power projects.
In 2019, 37% of the world’s energy was produced using coal, and it is the single largest contributor to climate change. Many countries such as South Africa and India will require vast sums of money to switch to clean energy.
Unfortunately, the largest coal producers in the world haven’t signed up to the agreement, including China and the US. A separate arrangement involving 20 countries seeks to end investment in ‘abated’ fossil fuel projects abroad. This has a target end date of 2022. Abated fossil fuel projects are those that burn fossil fuels without using technology to capture the CO2 emissions.
With all of these commitments, one problem is that there is no higher power to hold the countries to account and ensure they stick to their promises. The timelines of this agreement are not specific and seem to be a long way off from where we are now. In terms of funding, the richer countries will be required to invest in clean energy projects in the poorer countries if they are going to stand a chance of meeting the targets set out in the scheme.
Investment into renewable energy
Moving away from agreements made between countries, a group of the largest financial organisations in the world have pledged to finance renewable energy projects rather than those that involve burning fossil fuels. The potential total investment value is $130tn, making a huge difference in the transition to clean energy.
It is often said that money talks and the hope will be that this is the case if the organisations follow through with their proposals. This move takes funding away from coal, oil, and gas projects and into the hands of solar power, wind power, or even mortgages that subsidise energy-efficient homes.
This method of achieving net-zero is seen as politically far easier to stomach, as it would not involve asking the public to change their lifestyles. Instead, the infrastructure and products available to consumers would change around them, and they would be left with no choice but to lead a more sustainable life.
Following a similar theme, is the growth of the ESG sector of investing. The increase in interest in sustainable investing has been staggering, which has led to many ESG portfolios outperforming their non-sustainable counterparts in recent years. The chart below shows that the overall sustainable fund assets were worth almost $250bn in 2020.
Conclusion – was COP26 a success?
The answer to this question entirely depends on who is asked. Most politicians, particularly Boris Johnson, have branded COP26 as a major success and the beginning of the end for climate change. There is a consensus among leaders that this is a promising start, but far greater sacrifices and agreements will be required in future years if the 1.5-degree target is achieved. Under current world conditions, it is estimated that the global temperature rise will be limited to 2.4 degrees. This would have a devastating effect on the living conditions around the world, and millions of lives would be at risk.
Furthermore, it is one thing for promises to be made and targets agreed upon, but it remains to be seen whether any meaningful actions will be taken. Previous goals set by world leaders have not been met, so, understandably, much of the public is sceptical about the ability of our leaders to be true to their word.
The most significant part of the agreements made in Glasgow is that countries must regularly update their emissions targets and their action plan to achieve them. This gives hope that although current plans do not go far enough, with future revisions and improvements to the plans, sufficient changes can be made to ensure 1.5 degrees is kept within reach.
Climate change will not be solved overnight. The radical adaptations to our everyday lives required will take years and even decades to implement. One thing is for sure, though. The attention and scrutiny surrounding our climate emergency is increasing all the time. This can only be a good thing as it pressures world leaders to deliver on their promises or face being voted out by dissatisfied electorates.