bneGREEN: Mixed outlook for COP26 as leaders embark on search for agreement

bneGREEN: Mixed outlook for COP26 as leaders embark on search for agreement
Location of COP26, beside the Finnieston Crane on the River Clyde
By Richard Lockhart in Edinburgh November 1, 2021

The 26th Conference of Parties (COP26) of the United Nations Framework Convention on Climate Change (UNFCCC) is trying to put flesh on the bones of the targets and promises made at the 2015 Paris meeting.

In terms of global warming, the world is today 1.1°C warmer than in pre-industrial times and is on track for 2.7°C by 2100. In Paris, the world agreed on limiting this to 1.5°C, or 2°C at a push, but did not set out how to reach this target.

However, the UN has warned of “climate catastrophe” if the world’s governments do not rapidly improve their current climate change policies and cut their emissions levels.

 

G20

The G20 conference in Rome on October 30-31 had the potential to provide some leadership on concrete action to meet the Paris targets, and to send signals about how ready the world’s rich nations are to commit to improve climate targets.

However, it ended with somewhat vague and unconvincing commitments to taking action to combat climate change and to hold back global warming.

The final statement only referred to “meaningful and effective” action to stem global warming, and said that the G20 nations’ Nationally Determined Contributions (NDCs) would be improved “if necessary.”

The strongest climate change pledge was to stop financing new, unabated coal plants abroad by the end of 2021. The leaders also only promised to phase out coal power “as soon as possible.”

However, this still allows major coal-burning countries such as China, Russia, India and even the EU to continue using coal power at home.

Nevertheless, this will create more pressure on these countries to reduce their use of coal at home.

What this means is that the world will have to wait longer for any stronger, multilateral commitment to ending the use of coal.

Most importantly, the final communiqué did not mention the 2050 date, but referred to “around mid-century,” and committed to take further action in the 2020s, including improving 2030 NDCs.

They committed themselves to keeping the 1.5°C target “within reach” and to speeding up their efforts to mitigate climate change.

Green think-tank E3G noted that details on timelines and specific actions to deliver on the promise of faster action in the 2020s were few and far between.

E3G said that ending international coal finance was a breakthrough, and stressed that Italian PM Draghi has said that China and India had been more willing to speed up their own domestic coal phase-out timelines.

“After a tough fight that went all the way to Leaders, the G20 have confirmed the need for all countries to increase ambition this decade consistent with keeping 1.5°C within reach. COP26 now needs to turn this political promise into an agreed process. The G20 contains the world's largest polluters, so was never going to be the place to see the strongest climate leadership. The G20 has fallen short on clear commitments to stop building coal and other fossil infrastructure but has agreed the need for more action in the 2020s,” said E3G chief executive Nick Mabey.

This could suggest that while some leading G20 members such as the UK, Germany, France and Japan have already set a 2050 net-zero target, there is as yet no global consensus on agreement on making a global commitment to net zero by 2050, instead leaving the decision to individual states and setting a vague “mid-century” date. China and Russia have set 2060, not 2050, as deadlines for net zero, while India has not set any date.

 

NDCs

The good news is that more and more countries have submitted their Nationally Determined Contributions (NDCs).

A long list of developed countries, including the UK, the EU, Japan and most recently Australia, have set 2050 as their target date for net-zero emissions, while China has committed itself to 2060.

However, far more controversial, and more open to debate and disagreement, will be any targets for 2030. While updated or new NDCs can be effective in reducing greenhouse gas (GHG) emissions over time, an increase of about 16% in global GHG emissions in 2030 compared to 2010 is expected for the aggregate NDCs of 192 countries.

Such an increase in emissions translates to a global average temperature rise of about 2.7°C by the end of the century.

“We are nowhere near where science says we should be,” cautioned UNFCCC Executive Secretary Patricia Espinosa. She urged countries to “urgently redouble their climate efforts if they are to prevent global temperature increases beyond the Paris Agreement’s goal of well below 2°C – ideally 1.5°C – by the end of the century.”

The UN Environmental Programme (UNEP) stressed that even if current net-zero pledges set out in NDCs were fully implemented, these pledges could bring the predicted global temperature rise to 2.2°C.

This is set to be a key area for debate and dispute in Glasgow. While there is consensus on long-term goals for 2050 and 2100, governments are much less likely to agree on what they should do in the next 10 years.

Put simply, existing goals for 2030 are nowhere near enough to lay the foundations for further milestones in 2050 and 2100.

 

Russia

Russian President Vladimir Putin did not attend the conference, but said by video link that Russia aimed “not just to reach carbon neutrality, but to make sure that within the next three decades, the amount of greenhouse gas emissions in Russia is lower than, for instance, that of our neighbours and colleagues in the EU."

Russia is expected to reiterate its carbon neutrality goals and to bargain for the recognition of some of the pillars of the country’s greenhouse gas emission reduction strategy.

These include full recognition of the absorption capacity of its forests (1.2mn tonnes of CO2 equivalent, out of which half is lost in forest fires and deforestation), as well as the "green" status of atomic and hydropower energy.

VTB Capital (VTBC) analysts expect the COP26 political agenda to be dominated by mini-deals that various groups of countries can support. These include country-specific carbon neutrality targets, a ban on coal-fired capacity export financing, a global methane pledge and FACT initiating deforestation prevention.

Russia could join the carbon neutrality commitment (by 2060) and offer only verbal support to the global methane pledge, while VTBC doubts that Russia will join the remaining two initiatives at this moment.

Russian 2030 NDC "will not envision any meaningful CO2 footprint reduction, and we see carbon markets as the most critical development, opening the route toward carbon-neutral Russian products and new revenue sources for those corporates that undertake green projects domestically," VTBC analysts commented.

Russia is the fourth-largest economy in terms of GHG emissions and is in general keen for countries to pursue their own fossil fuel agendas for as long as possible.

 

Turkey

Similarly, Turkish President Recep Tayyip Erdogan has reportedly cancelled his visit to Glasgow, blaming the UK government’s decision to provide less security than initially promised for the Turkish delegation, Middle East Eye (MEE) said October 31.

Turkey only signed the 2015 Paris Agreement in October 2021, the last G20 nation to do so, and has set 2053 as its target date for net zero. However, it has not provided any details of how it will do this.

A key issue for Turkey is that it wants to be regarded as a developing country, so that it can access climate finance, rather that its current official status as a developed country at the UN climate convention.

Erdogan announced at the end of October that it had signed $3.2bn of Green Climate Fund loans in order to meet the clean energy goals outlined in the Paris climate accord, suggesting that it has made some headway in gaining access to climate finance.

 

Developing countries

 

Meanwhile, for developing nations in Africa and Asia, the effects of climate change are more urgent, as they are more vulnerable to climate change-induced catastrophes such as floods, droughts and wildfires.

For example, the UN has warned that the continent is especially vulnerable to high levels of migration because of climate change, as even though sub-Saharan Africa has contributed the least to global warming, the continent will experience the most devastating impacts of climate change.

A key issue is for OECD nations to fulfil their pledge to raise climate finance to $100bn per year. Rich nations have so far failed to reach this target – commitments reached $80bn in 2019 and the $100bn milestone is only now anticipated in 2023.

Poorer nations are also calling for stronger emissions cuts and financial compensation for the impacts they are expected to suffer from climate change.

Poor nations also want more help for adaptation, a catch-all term for efforts to make local societies and infrastructure more resilient to the impact of climate change. They want COP26 to define a Global Goal on Adaptation (GGA) and to commit to allocating at least 50% of climate finance to adaptation.

 

Climate finance

 

The recent price volatility in energy markets will also concentrate minds on how this will be paid for in the decades to come, and how government efforts to increase renewables share of energy supply could be influenced negatively by price shocks and supply threats.

What policymakers must do is send clear signals to global investors that investing the requisite sums is worthwhile.

One key metric is the falling cost of renewables has made green investment just as attractive, and is in some cases a better bet, than investing in fossil fuels, especially in large Asian markets such as India, China and Indonesia.

The International Energy Agency (IEA) executive director Fatih Birol stressed recently that the leaders meeting in Glasgow must communicate that any future investment in fossil fuels will lose money, ICIS reported.

“I’d like to see the world leaders coming together and giving a message to the rest of the world, saying to investors: ‘We are united behind a clean energy future [and] we are giving you an unmistakable signal: If you continue to invest in fossil fuels, you may risk losing money,’” said Birol.

The agency wants a range of incentives, such as carbon pricing mechanisms, green legislation and an end to any licensing of fossil fuel project.

A key challenge is scaling up technology, as while the technology exists to reach net zero, much of it is very much in its infancy and experimental. As solar panels and wind turbines have fallen in price in recent years, governments and companies must ensure that similar falls in costs, accompanied by rapid increases in engineering and construction capacity, emerge for such technology as carbon capture, hydrogen fuel and batteries.

 

Showing up

The central target is to limit global warming to 1.5°C by 2100, but there is still no detail on what pathways to follow to reach this target. This means information about how much it will cost and who will pay, and what sorts of technology will be used and when.

It would be a bonus, indeed a triumph of diplomacy, if COP26 is able to deliver agreement on any of these details.

Finance, especially issues such as putting price on carbon, carbon taxes and the operation of carbon markets, will also be a major issue at the conference, and again any agreement will be hailed as progress by the world’s governments.  

If there can be agreement on $100bn per year in finance for the developing world, then again the world’s richest countries will be able to claim a victory.

However, the G20 conference has not managed to come up with any momentum to COP26. UK Prime Minister Boris Johnson said on the evening of October 31: “If Glasgow fails, then the whole thing fails.”

US President Joe Biden added to the negative tone by expressing disappointment that Russia and China basically didn't show up."

 

 

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