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Adrienn Sarandi, Head of ESG Strategy & Development, outlines the commitments that she believes need to be made to deem the COP26 a success in the fight against global warming.
COP26 in Glasgow – the 26th Conference of the Parties to the United Nations (UN) Framework Convention on Climate Change – is the most crucial climate talks since the Paris Agreement was signed in 2015. The bar is much higher however, because while the Paris Agreement was about pledges, this COP will be about what governments deliver. It will be the first time since the Paris Agreement that countries are expected to announce their more ambitious and tougher Nationally Defined Contributions (NDCs), which outline the efforts that nations are making to reduce their emissions and adapt to the impacts of climate change. Rich countries are also expected to commit to, and follow through with, helping poor nations to finance their low carbon transition. Sectoral decarbonisation roadmaps (especially for hard to abate sectors), removing fossil fuel subsidies, mandatory Task Force on Climate-related Financial Disclosures (TCFD)* reporting and economic recovery plans that support net zero will also be on the agenda. Will COP26 be a breakthrough that removes the biggest bottlenecks standing in the way of decarbonising the global economy, or will it be another reminder that net zero remains an illusion? In this article we summarise the challenge at hand and why we can’t afford a COP-out from facilitating real change.
Evidence suggests that human activities such as the burning of fossil fuels, deforestation and an increase in intensive agriculture are contributing to extreme weather patterns across the planet. The consequences are catastrophic and pose immediate threats to human, animal and plant life, in particular risking low lying land from rising sea levels, land becoming inhabitable, food production, safety and security, and access to clean water.
The Intergovernmental Panel on Climate Change (IPCC), a UN-led panel of scientists representing 196 countries, delivered a grim prognosis in August1:
The IPCC also highlighted that the ‘global surface temperature will continue to increase until at least the mid-century under all emissions scenarios considered’. Extreme events related to global warming are therefore unavoidable over the next decade no matter what we do today and managing these through climate change adaptation will be imperative for all sectors and countries. But beyond this decade, the report highlights a window of opportunity to slow and even reverse global warming if we act boldly today and deliver the necessary conditions – the right government policy, channelling investments in the right places and changing consumer behaviour.
What is important is that commitments (words) are given in greater detail and with interim targets through legally binding policy (action).
Many believe it is important to do this in a way that delivers a Just Transition* and continued economic growth without runaway inflation, political stand offs, geopolitical tensions and social unrest. This is not an easy balance to strike. According to capital market participants, financing the decarbonisation of the global economy could cost US$4-5 trillion per year every year till 2050. Hence, there have never been larger and more urgent expectations of a COP to enable these conditions to be met.
There are six areas we are watching very closely and would like to see progress on at COP26:
The world’s eyes this week will be on both national pledges to reduce emissions, but also the detail outlining how reductions will be delivered. It is important to remember that it is very easy to make net zero commitments by 2050, but today’s political leaders will not be in power in 2050. Just like CEOs currently committing to net zero by 2050, there will be several management teams coming and going in the next three decades and current management teams will not be the ones accountable for delivering the commitment. This is why headway needs to be made on actual policies not just pledges.
If COP26 is to be deemed a success, we would like to see commitment on specific action points that are then followed through with climate finance for vulnerable and developing nations, as well as international commitments on deforestation, climate adaptation and phasing out coal and internal combustion engine (ICE) cars. Breakthrough on global carbon pricing is also imperative to achieve net zero on time. What is important is that commitments (words) are given in greater detail and with interim targets through legally binding policy (action).
Financing the transition can only really start in earnest when these conditions are met. Clear policy is needed to reduce uncertainties regarding sustainability in order to make long term investments. If government backing is there, the private sector will follow.
COP26 and the net-zero transition are incredibly complex, filled with risks and requiring unprecedented global collaboration and ambition across governments, businesses and civil society. But the buy-in from all regions and all levels of society to make real change and deliver the necessary conditions for the transition is growing by the day. We need a COP that will enable an overhaul of our fossil fuel-hooked economic growth model, leading a move to a low carbon and circular economy and averting environmental, economic, social and financial disaster. Time has never been more pressing, and the stakes have never been higher.
1 Intergovernmental Panel on Climate Change (IPCC) – Climate Change 2021 – The physical science basis summary for policymakers
2 New Climate Institute, Climate action tracker, Paris Agreement turning point, 2020
3 International Renewable Energy Agency, World Energy Transitions Outlook: 1.5oC pathway, 2021