Category: COP 26

We all heard the bang of the Paris Agreement gavel – the tears, cheers, the joy and France’s diplomacy played a key role in the success of this historic event. Five years on from the Paris Agreement, the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC) in Glasgow in November 2020 will be a critical milestone for global climate action globally.

It will also be one of the biggest global events ever held here and with people-powered climate movements stronger than ever, the world will be looking to the United Kingdom to lead. The UK must use its diplomatic might to corral countries to commit to reduce green house gas emissions (GHGs) by 50% by 2030 and be net-zero by 2050. Developed countries must commit to the US$100 billion climate finance price tag, so as to match the reality of climate science and the climate emergency.

The stakes are high. If COP26 doesn’t deepen the level of ambition and sort out the finances needed, we have little chance of keeping to 1.5 °C. We must keep to 1.5 °C to avoid the risk of setting off the tipping points or feedback loops within the climate system that, if passed, could send the Earth into spiralling warming and runaway climate change.

We must act fast. According to modelling by the Global Carbon Project, there is only 9% of the 1. 5 °C carbon budget left, which will be gone in roughly ten years at current emissions.

Starting now, the UK must outline an ambitious agenda for COP26 using its diplomatic clout and single out big GHG emitters and fossil fuel producers such as Argentina, Australia, Brazil, Canada, Japan, Korea, Nigeria, South Africa and the United States.

The UK is well positioned to build momentum and establish a powerful legacy at COP26. Since 1990, the UK has reduced emissions faster than any other G7 nation, and it was the first advanced economy to legislate a net-zero 2050 target and it has so far achieved a ¬42% cut, marking a big stride in decarbonising its electricity sector and investing heavily in offshore wind. However, the lion’s share of UK’s GHGs come from heat, transport, industrial processes and manufacturing and this where (like for many countries) the largest decarbonisation challenge lies.

As COP hosts, our leadership also rests on ramping up and delivering our own climate policies and programmes. The UK is currently projected to not meet its medium-term climate targets for its fourth (2023-2027) and fifth (2028-2032) carbon budgets. There has been a lack of significant climate policies recently and there is a need to show a commitment to switching transport and industry to renewable energy, significantly upgrading our household heating systems, and increase finance supporting local, corporate and national actions for a just transition. Etcetera.

COP25, Madrid

Underway is COP25 hosted by the Presidency of the Government of Chile in Madrid and the two main negotiating points are working on finalizing the Paris Agreement’s rules including getting agreement on issues such as Article 6 on carbon markets and financing loss and damage. At this COP, there is no formal negotiation scheduled to build political momentum to increase national climate reduction targets. However, most countries are not on target to even meet the modest commitments they made in Paris four years ago, never mind enhance to meet 1.5°C.

According to the UN Environment Programme’s Emissions Gap Report (2019), global carbon emissions continued to rise (up by 1.5% per year in the last decade) and from 2020 emissions will need to be cut by 7.6 % per year for the next 10 years to reach the 1.5 °C goal and 2.7 % per year for the 2 °C goal. To match this, Nationally Determined Contributions (NDCs) must increase in ambition by at least fivefold for the 1.5 °C goal and threefold for the 2 °C.

Many of the EU member states have signed up to an EU-wide pledge to be climate neutral by 2050 and Denmark, Sweden, and Finland all aim at carbon neutrality well before 2050. Austria aims for carbon neutrality by 2040 and (significantly) commits to 100% renewables in the electricity sector by 2030. However, Poland (has sought exemption), the Czech Republic and Hungary have been delaying the process on EU wide carbon neutrality. Once there is agreement, the next step is that the EU carbon neutral 2050 target needs to turn into EU law, agreed by both the European Commission and the European Council and the expected date is around June 2020.

Globally, 80 countries or so have indicated their ‘intent’ to enhance their NDC’s by 2020, but they represent just 10.5% of global emissions. Big emitters like Australia, the United States, Canada, Russia, India, China and Brazil, so far have not submitted revised NDC plans. Two useful platforms that track national climate commitments is Climate Watch‘s NDC Tracker and Climate Action Tracker.

Reducing Both Emissions and Fossil Fuel Production is Vital

Countries must slash both their emissions, and their fossil fuel production and this doesn’t seem to be happening anytime soon. The Production Gap Report (2019), produced by the UN Environment Programme (UNEP) and the Stockholm Environment Institute (SEI), highlighted that the fossil fuel production gap is wider than the emissions gap. Countries are planning to produce about 50% more fossil fuels by 2030 for 2 °C and 120% more than is feasible to keep temperatures to 1.5°C. The production gap is the largest for coal, and oil and gas will also exceed carbon budgets.

Countries such as France, Costa Rica and New Zealand have committed to banning new oil and gas exploration and extraction and to phase-out existing production. The UK needs to do this too, we continue to extract coal, oil and gas and we need to #KeepInTheGround our 10 to 20 billion barrels of oil equivalent in recoverable reserves and resources, of which a significant portion is gas.

In recent years, the UK oil and gas industry received £176 million more annually in government support than it paid in taxes and in 2016, and we spent the most in Europe on fossil fuel subsidies (£10.5bn), more than we spent on renewable energy (£8.6bn). Reducing subsidies must be a priority in 2020, as well as ensuring the just transition for workers and communities currently dependent on high carbon industries.

The UK also needs to reduce its funding of fossil fuels in developing countries, which according to CAFOD and ODI equalled £4.6 billion or 60% of £7.8 billion between 2010 and 2017. However, this might change given that the World Bank has stopped and the European Investment Bank (EIB) will stop funding new upstream* oil and gas projects. It will be interesting to see if and when the UK’s CDC and other development banks follow.

Eyes to the East

In China, they will soon annouce their ‘Clean, low carbon, secured and highly efficient’ 14th Five-Year Plan for 2021-2025. While China continues to reduce its carbon intensity, increase energy efficiency and has announced that it will reduce coal power production in the north-west of China by at least a quarter – it is still the largest global producer and consumer of coal (= 55% of China’s fuel mix). It also plans to install new coal power capacity equal to the EU’s entire coal capacity.

New coal-fired power plants in China need to be banned and reducing emissions connected to the Belt and Road Initiative (BRI) (spanning across 68 countries = 65% of the world’s population) should be an urgent priority in the lead up to COP26 as many of these investments are skewed towards coal power. For more thinking on this, it’s worth looking at China’s Energy Research Institute, the think-tank of the National Development and Reform Commission (NDRC) and their proposal for ‘2C Asia’ an initiative to look at decarbonising energy systems in Asia. See more here on this from China Dialogue.

Climate Finance

An ambitious result in Glasgow also requires that developed countries deliver on the US$100 billion commitment by and annually after 2020. While it’s promising to see 27 countries recently pledge nearly US$9.8 billion over the next four years to the Green Climate Fund – many countries are yet to pay their share. Even then this funding is a drop in the ocean compared with the estimated US$ 1.6 – 3.8 trillion p/a trillion energy system investment needed to avoid the most harmful effects of climate change (IPCC, 2018).

A significant breakthrough could occur if countries cut their fossil fuel subsidies. Just 10-30% of the world’s fossil fuel subsidies, that equal US$775 billion to US$1 trillion per year, could pay for a global transition to clean energy, according to the International Institute for Sustainable Development (IISD) report. Reducing subsidies must be a priority in 2020, as well as ensuring the just transition for workers and communities currently dependent on high carbon industries and living in high risk climate impact countries.

Encouragingly, the UK is considered a global leader on sustainable finance and the Bank of England is the first regulator to start to stress test its financial system against different climate pathways. The UK is doing pioneering work on risk and ESG disclosure – waxing and weaving this into the heart of the financial system and it’s very positive that Mark Carney, Governor of the Bank of England, has been appointed the UN Special Envoy for Climate Action and Finance. See his ‘Fifty Shades of Green’ speech for the IMF here.

Ultimately though, how fast the sustainable financial system can make an impact and channel capital towards decarbonisation, adaptation and loss and damage will be determined by the ambition and implementation of climate policies. This leadership is much needed, given the recent stark warning from scientists Lenton et al in Nature, that the world may already have crossed a series of climate tipping points and the impacts could lead to a cascade of unstoppable events. This is frightening, to say the very least.