Reflecting on COP26: what were the key outcomes?
COP26 has been hailed as the most important Conference of the Parties (COP) since COP21, which produced the Paris Agreement.
Although the conference was unsatisfactory in delivering the action and commitments needed to reach the targets from the Paris Agreement, COP26 has raised the global ambition on climate action.
Let’s take a look at some of the successes and shortcomings from the conference.
Successes at COP26
1. Green finance for the net zero economy
$130 trillion towards net zero
At COP26, a remarkable achievement was the announcement from the newly established Glasgow Financial Alliance for Net Zero of $130 trillion of private capital to accelerate the transition to a net-zero economy.
Green finance provided by banks, markets, insurers and active climate-aware institutional investors will continue to play an increasingly pivotal role in driving climate action.
It increases focus on climate change for both public and private companies.
Climate risk disclosure for companies
Further, COP26 has established a new International Sustainability Standards Board (ISSB) to develop a global baseline for disclosure standards on climate and other environmental, social and governance (ESG) matters.
This is an essential step in enhancing decision-making for climate-smart investing.
It complements the UK government’s announcement just before COP26 that it will be making climate risk disclosures mandatory for large companies from 2022, and for all companies by 2025.
2. Disclosure and transparency for the private sector
Greater climate transparency in the private sector
It’s not only countries’ climate pledges that are being called into question over credibility.
The private sector is now also under intense scrutiny from both clients and institutional investors on ensuring its net-zero commitments are also robust and legitimate.
As such, the new requirements for all listed companies in the UK to produce net-zero transition plans by 2023, announced at COP26, are most welcome.
The requirements will increase transparency and scrutiny of companies’ net-zero plans. It’s also likely this will be the beginning of an international trend on transparency of net-zero targets.
Clearer standards for measuring net-zero commitments in the private sector
UN secretary-general, António Guterres, also announced that the UN will establish a “group of experts” to propose clear standards for measuring and analysing net-zero commitments from non-state actors. This will:
- create international standards on net zero for all businesses (which currently does not exist under the United Nations Framework Convention on Climate Change (UNFCCC))
- expose greenwashing
- reward those who have adopted robust and legitimate net-zero strategies
3. Increasing the pace of implementing the Paris Agreement
One of the major successes of COP26 was the agreement “to revisit and strengthen the 2030 targets in their nationally determined contributions…by the end of 2022”, as well as establishing a new annual high-level ministerial meeting from 2022 and leaders summit in 2023.
This will pressure governments to continue driving their ambition to achieve the Paris Agreement temperature goal at a faster pace than outlined in the Paris Agreement.
Paris Agreement ‘rulebook’
Further, crucial progress was made on the Paris Agreement ‘rulebook’ for Article 6 of the Paris Agreement, which concerns carbon markets and accounting.
The now approved rulebook will unlock market and non-market approaches on both climate change mitigation and adaptation by:
- providing operational transparency and certainty
- closing loopholes
- minimising the risk of ‘double counting’
Shortcomings at COP26
1. Failure to meet 1.5°C target
Perhaps most notably, the UK COP26 presidency failed to meet its own target to “consign coal to history”, by achieving an agreement which phases coal “down” rather than “out” in the concluding Glasgow Climate Pact.
Further, the language of phasing out "fossil fuel subsidies" was watered down to “inefficient fossil fuel subsidies”.
This continues to put the Paris Agreement temperature target of well below 2°C under extreme threat.
However, we're on track for 2.4°C warming
According to the International Energy Agency, new national commitments to zero net emissions could be enough to limit warming to just 1.8°C.
However, Climate Action Tracker found that owing to the lack of firm plans for 2030, we’re still on track for 2.4°C warming owing to a “massive credibility, action and commitment gap”, as many of the commitments contain limited details on near-term details.
The new targets, although falling short of initial projections, indicate that governments can drive down global warming through ambitious collective action bolstered by the COPs.
2. Not securing $100 billion climate finance
Further, COP26 did not manage to secure the $100 billion per year in climate finance by 2020 as promised at COP15 (2009) in Copenhagen, instead delaying the finance to 2023.
This not only fails to urgently provide resources to countries most vulnerable to climate change, but also logically raises the question as to whether similar long-term commitments made at COP26 will be delivered on time.
10 key announcements at COP26
With 90% of the world’s economy now committed to net-zero targets, COP26 has spawned a host of initiatives, breakthroughs and pledges.
COP27 is not far away. The race to net zero 2050 has begun.
Business leaders and world leaders will be returning in a year’s time as they try to replicate the successes and close the shortcomings of COP26.
Engaging, not ignoring the need for climate action is essential, particularly as lawyers will be critical in realising the pledges from Glasgow and working towards global climate justice.