Responsible and Sustainable Investing

THE PATH TO 2030

COP 26 Update

COP 26

It was late in coming, it included some watered down wording on coal and fossil fuels (remarkably the first time any such reference has ever been included in any UN climate agreement), it just about brought the conference Chair to tears, but an agreement and text from COP 26 was finally agreed on Saturday night in Glasgow, one which kept the 1.5°C temperature rise target in play.

The Glasgow Climate Pact is a non-binding document signed up to by the 197 nations of the UNFCCC (United Nations Framework Convention on Climate Change). It is littered with phrases such as requests, urges, calls upon, welcomes and emphasizes, all of which have their own meaning in the world of climate change diplomacy.

Within its many clauses, The Pact includes a number of noticeable highlights...

1.5 °C of warming is the key target - A recognition that "the impacts of climate change will be much lower at the temperature increase of 1.5 °C compared with 2 °C and resolves to pursue efforts to limit the temperature increase to 1.5 °C"
Rapid reduction of greenhouse gas emissions required - A recognition that "limiting global warming to 1.5 °C requires rapid, deep and sustained reductions in global greenhouse gas emissions, including reducing global carbon dioxide emissions by 45 per cent by 2030 relative to the 2010 level and to net zero around mid-century, as well as deep reductions in other greenhouse gases"
Fossil Fuels recognized - It includes text (again remarkably for the first time) that countries must target a "phasing down of unabated coal power and inefficient fossil fuel subsidies". This wording proved contentions, with India and China, at the last, insisting a change in the language from "phase out" to "phase down" which caused much angst among many countries but was accepted to save the deal
Stronger Nationally Determined Contributions (NDCs) by end of 2022 - the Pact noted with serious concern that current NDCs fall some way short of what is required and requests Parties to improve their commitment and report back by the end of 2022 and annually thereafter. The requirement puts the acid on Countries with weaker commitments
Climate Finance, Adaptation and Loss and Damage - a key sticking point has been the failure of the rich nations (noted with deep regret) to meet their finance commitment to developing nations of $100bn per annum. The Pact urges developed countries to meet this commitment through to 2025 and to develop financing post 2025. The Pact also included a commitment by developed nations to at least double funding to developing nations to help them adapt to the impacts of climate change. Finally, Glasgow agreed to recognize the plight of climate vulnerable nations and urged the scaling up of support for affected developing nations, but fell short of the establishment of specific funding.

There were also a number of other announcements and deals including...

a joint declaration by the US and China, the world's two biggest emitters to co-operate on climate change measures,
more than 100 countries representing more than two-thirds of the global economy, (including the United States, Japan and Canada) pledged to significantly cut emissions of methane, a potent greenhouse gas (by 30% on 2020 levels by 2030),
124 countries (including Brazil, Canada, the US and Russia) signed the Glasgow Leaders Declaration on Forest and Land Use which commit to working collectively to halt and reverse forest loss and land degradation by 2030,
there were a number of finance related initiatives including the Glasgow Financial Alliance for Net Zero announced that it would deliver more $130 trillion in financing to transition global economies to net zero by 2050,
finally, a deal was reached on rules for carbon markets which potentially unlocks trillions of dollars for protecting forests.

It was never likely that the Glasgow summit was going to provide a once and for all solution to the climate crisis and the rapid shift to a zero carbon world. Current commitments still fall well short of what is required and funding for poorer nations to help mitigate and adapt to climate change are still a work in progress. Crucially however, Glasgow keeps the window to no more than 1.5 °C of warming alive, just.

"I think today we can say with credibility that we've kept 1.5 (degrees Celsius) within reach. But its pulse is weak, and we will only survive if we keep our promises. (...) History has been made here in Glasgow." COP 26 President, Alok Sharma

"The #COP26 is over," she tweeted. "Here's a brief summary: Blah, blah, blah...."But the real work continues outside these halls. And we will never give up, ever." Climate activist Greta Thunberg

I trust that this is of interest and feel free to touch base if you have any immediate questions.

Kind regards,

Matthew Mimms, The Investment Store Limited

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