COP26 - more broken promises?

13th of January 2022
COP26 - more broken promises?

COP26 climate talks wound up at the end of last year with global decision-makers returning home with a clear message ringing in their ears ... ‘enough blah blah blah, it’s time for transformative action’. Hartley Milner reports on crucial pledges made by the private sector towards meeting net-zero carbon targets.

On an unseasonably warm November day in Glasgow, an air raid siren blared out a symbolic message to the world … that its leaders were pulling back from agreeing decisive actions to combat catastrophic heating of the planet.

The mournful wailing gave expression to the anger and frustration felt by tens of thousands of climate activists who had jammed the streets around the COP26 venue as two weeks of negotiations approached the endgame. Millions more turned out in countries across the world to demand that their delegations make a final push to get the conference’s carbon reduction ambitions over the line.

Despite running into extra time, delegates came away from the UN summit having failed to do little more than keep on life support the core 2015 Paris goal of limiting temperature rises to 1.5°C above pre-industrial levels and achieve net zero by 2050. Scientists say this target must be met by the end of the decade to mitigate the worst impacts of climate change. Global warming has already reached
1.1°C and is on track for 2.7°C by the end of this century.

A critical landmark win for the talks was an acknowledgment for the first time that the climate crisis has been caused by the burning of fossil fuels. But the final Glasgow Agreement deferred more action on reducing fossil fuel emissions to next November’s COP summit in Egypt, and its text around reducing the use of coal – the single biggest source of greenhouse gases – was watered down following eleventh-hour objections from India and China, despite pleas from other developing countries.

With countries strapped for cash after fighting Covid, all eyes at Glasgow turned to the private sector to step up and give a strong lead in the race to stabilise the climate. As Prime Minister Boris Johnson said on the first day of the UK-hosted summit: “We can find the finance and we must. But we cannot and will not succeed by government spending alone. We in this room could deploy hundreds of billions, no question, but the market has hundreds of trillions.”

Johnson was essentially saying that governments were looking to the private sector to provide the bulk of the climate finance. No great revelations there, since corporations account for more than 72 per cent of global GDP in the OECD club of the richest countries, non-members China and Russia aside.

Private sector focus

Many positives came out of the partnership with the private sector at Glasgow. An early climate pledge was to provide $100 billion a year in public and private finance by 2023 to help poorer countries mitigate the impacts of soaring temperatures. The funding target represents a reset of a commitment made in 2009 to deliver the money by 2020 that was missed. Conference president Alok Sharma said although $100 billion is just a fraction of the investment needed delivering it is “a matter of maintaining trust”.

A deluge of other public and private climate finance promises followed. Among them was a commitment by more than 450 financial services firms, including banks, fund managers and insurance companies, across 45 countries to move $130 trillion of funds into investments where the recipient is targeting net-zero emissions by 2050. However, critics point to the absence of a roadmap showing how this ambition will be achieved.

Initiatives announced by the World Bank Group and Asian Development Bank will share risk with developing countries and provide up to $8.5 billion of new finance in support of climate action and sustainable development. There was also the launch of an innovative new financing mechanism, the Climate Investment Funds’ Capital Markets Mechanism (CCMM), which will boost investment into clean energy like solar and wind power in developing countries.

The transition to cleaner fuels was bolstered by a pledge on coal. But the wording was changed in the final text from “phase out” to “phase down” coal and fossil fuels. Major banks and financing institutions said they would stop funding coal production overseas by the end of 2022, and steer their spending into clean energy instead.

More than 90 nations also agreed to slash emissions of potent climate heating gas methane by 30 per cent by 2030, a “low-hanging fruit” when it comes to slowing warming in the short-term. It could reduce temperatures by as much as 0.2 degrees.

Finance pledges

A long-awaited pledge commits the global business sector to provide finance to help halt and reverse deforestation and land degradation in countries including Brazil, Indonesia and the Democratic Republic of Congo – together accounting for 85 per cent of the world’s forests – by the end of the decade. The ambitious target will be underpinned by $19 billion in both private and public funds. More than 30 private sector investors will put up an additional $7.2 billion.

More than 30 financial institutions with $8.7 trillion in assets under management said they would make “best efforts” to eliminate deforestation related to activities such as cattle, palm oil, soya and pulp production by 2025. An extra package of over $1 billion in government and private sector money was promised for indigenous communities, who are seen as the most effective forest guardians.

These financial pledges could be timely. A study published this summer by the National Institute for Space Research in Brazil shows the Amazon rainforest – often referred to as the ‘lungs of the Earth’ – is now emitting around one billion tonnes more CO2 than it is able to soak up. The flipping of its carbon sink role is an outcome of hardwoods logging and fires set to clear land for grazing beef cattle or for growing crops.

Catastrophic impacts

The destruction of forests and other eco-systems across the planet is having catastrophic impacts on biodiversity. Scientists predict that more than one million plant and animal species face extinction by the end of the decade. An array of urgent actions and investments were pledged by 45 governments to protect nature and make the shift to more sustainable ways of farming, including a €529 million boost to protect over five million hectares of tropical rainforests and create thousands of green jobs across Africa, Asia and Latin America. Almost 100 companies committed to work towards halting and reversing the decline of biodiversity by 2030.

The UK raised its commitment to combat global warming to £11.6 billion over the next four years. Chancellor Rishi Sunak targeted £100 million to help developing countries pay for projects to tackle climate change, as was agreed under the 2015 Paris climate agreement.

Britain also committed £576 million for a package of initiatives to mobilise finance into emerging markets and developing economies, including £66 million to expand the MOBILIST programme, which helps to develop new investment products that can be listed on public markets and attract different types of investors.

The chancellor announced that the UK will become the world’s first carbon neutral financial centre and talked about the need to “rewire the entire global financial system to net zero”. And he called on private companies to be more transparent about their climate credentials. To this end, UK financial institutions and publicly traded companies will be required to publish details revealing how green their investments and their own businesses are, to show they are actually contributing to reductions in global heating.

The European Union, meanwhile, has said it wants Europe to become the world’s first climate-neutral continent. Towards that goal, it has committed to reducing emissions by at least 55 per cent by 2030, compared to 1990 levels. The union was already the largest provider of international climate finance, having in 2020 set aside €23.39 billion ($27.04 billion) to help developing countries reduce their greenhouse gas emissions and adapt to the impacts of global heating.

During the final few days of the COP summit, it raised its commitment further, with a new donation of €100 million ($115 million) to the international climate Adaptation Fund. Along with this, the European Bank for Reconstruction and Development announced its intention to double the mobilisation of private sector climate financing by 2025.

Surprise declaration

Probably the most surprising conference outcome was a joint declaration made by the US and China in the final days. The arch rivals, who are also the two largest emitters of carbon dioxide, unveiled a deal to ramp up cooperation on tackling climate change, including doing more to cut methane emissions, phase out coal consumption and protect forests this decade. Chinese climate envoy Xie Zhenhua said: “Both sides will work jointly and with other parties to ensure a successful COP26 and to facilitate an outcome that is both ambitious and balanced.”

As weary delegates caught their flights home, UN secretary-general António Guterres said the Glasgow summit had been “an important step but had not done enough”, adding: “It’s time to go into emergency mode as we are in the fight of our lives.”

Greta Thunberg said: “It’s all been yet more blah blah blah.”


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