Cop26 brought money to the cause of climate change

As Cop26 nears Glasgow in November, Alok Sharma, UK chairman of the event, described himself as the chief shepherd of a global warming deal.

The president’s role was to guide the disparate coalition to move forward together – and it worked, as 190 countries signed pledges to extend and complete the 2015 Paris Agreement that committed the world to limiting the rise in the world temperature at 1.5.°C above the pre-industrial standard.

Speaking six weeks after the meetings, Sharma said the mission was accomplished because all countries adopted the Glasgow conclusions.

“At the end of the day, if we are to succeed in what science tells us we need to do, which is to halve global emissions by 2030, all countries will have to act together,” he said. declared.

Describing his continued role in Cop26 – the post runs until the opening of the next conference in Sharm el-Sheikh in 2022 – Mr Sharma said he was stepping up to the task of chief auditor, reviewing progress made towards meeting the commitments made during the meeting.

But the big failure of the meeting was the failure, once again, to meet financial commitments, as rich countries failed to meet the annual funding target of $ 110 billion set in Paris to subsidize countries’ efforts. in development to progress towards carbon neutrality and help them cope with the effects of climate change.

Mr. Sharma underlined the substantial mobilization of the private sector to provide momentum where governments have held back.

“I would just say that the $ 100 billion, of course, is a totem number, and we absolutely have to get there,” he said. “But if we want to make real progress in terms of energy transition in the world, by phasing out countries from fossil fuels to renewable energies, the private sector will have to be involved, it will take billions of billions mobilized.”

This is a point in keeping with the pledge from the organizers that the priorities in Glasgow would be coal, money, cars and trees – and the movements around money as well as coal ended up being the dominant outcomes of the meeting.

“A coalition of institutional investors”

Abyd Karmali, client advisor on Cop26 who spoke at a Bank of America panel, highlighted how asset management companies with $ 130 trillion under management attended the conference, many of whom joined. the Glasgow Financial Alliance for Net Zero, led by the United Nations Climate Finance Envoy. Mark Carney and Mike Bloomberg, former mayor of New York.

“You have the beginnings of a coalition of institutional investors,” Kamali said. “The critical point is that $ 130 billion sending an incredibly strong signal to all the different stakeholders that this is unmistakably the direction of travel.”

There has been a lot of talk about certain types of investments becoming “stranded assets” without recourse to market funding as climatic deadlines approach.

Julian Mylchreest, executive vice president of Bank of America, sees the weight of finance leading to a much faster progression to net zero.

“I hope after the cop the conversation gets more sophisticated now and a little more nuanced,” he said. “Because I think once you get to a position where climate change is an accepted truth and net zero the indisputable goal now, it all depends on the what and the how and the pace of the how and who pays for. that and I think we’re going to make a lot more progress now.

“It’s not about them and us, and I’ll give you a few examples. I think one of the things my colleagues have heard me talk about a lot is hydrogen. I don’t see a way to go to net zero and deal with hard-to-reduce areas without seeing hydrogen play a very big role. “

But countries remain the building blocks of the Cop process.

“We now have 90% of the world covered by a net zero goal. But above all, these do not yet take us on the path of 1.5°C, so more needs to be done, ”said Archie Young, UK chief negotiator.

“One of the main achievements of Glasgow, I think, has been to put in place the expectation that countries will revisit and strengthen their [Nationally Determined Contributions], their figures for 2030 next year.

“So if we hadn’t had that global stock in 2023 and then the click in 2025, we would only have looked at numbers beyond 2030.”

Jake Werskmen, the European Commission’s international climate adviser, told a panel that Glasgow had raised the bar by securing detailed commitments from all participants.

“Much more specific in terms of science requires of us 1.5°C, net zero by mid-century, ”he said. “Much more specific in terms of the types of policies we need to put in place. Specifically in terms of where we need to make those reductions, especially in short-term methane and CO2 of 45% from 2010 levels by 2030. “

However, policymakers and businesses are catching up with consumers in many ways.

A survey last month by consulting firm Simon-Kucher & Partners found that 85% of global consumers surveyed had actively made more sustainable purchasing choices over the past five years.

Sustainability was identified as a key factor in purchases by six in 10 buyers, and just over a third said they were happy to spend more on these goods and services.

The results showed the strongest support for sustainable options among Millennial buyers. Respondents were eager to see green commitments from utilities and energy companies.

The future of coal the key confrontation

The most intense moment of Cop26 came on the last afternoon, when China and India joined forces to replace “phase-out” with the more ambiguous “phase-out” in the final coal press release.

Mr Young said that due to the size of the population, China and India, with around three billion people between them, could not be excluded from the final deal.

“They were not ready to accept the pact as it was – it had to be taken seriously,” he said. “There’s always the phase-down of coal – it’s not a phase-down, but it’s still a phase-down. This sets a bar for future cuts and you still have a phase-out of inefficient fossil fuel subsidies. “

Bernice Lee, director of sustainability research at Chatham House, said Glasgow shows the balance China is achieving as it manages its economy while participating in the climate change process. She sees a difference between the organizers’ priorities for goals and achieving reductions in the carbon economy.

“Throughout the Cop, China has reminded everyone time and time again that delivery is important,” she said. “There is good and bad in this. The good thing is that delivery is clearly important. The bad thing is that I think ambition and goal setting are important too. “

For the private sector, the importance of Glasgow has been the signal sent on the future direction of innovation and the shift to renewable energies. India has set a target date of net zero at 2070 while many other states, including the MENA countries, are eyeing 2020.

The backdrop to Cop26 was a cold snap across Europe that sparked an energy crisis. After shifting so much capacity to renewables over the past decades, many European countries have struggled to find alternatives as the wind stopped blowing and the mercury dropped.

In Germany, where the government moved away from nuclear, coal was the main source of energy in the third quarter. Fuel generated 32 percent of the amount of electricity fed into the grid, an increase of 22.5 percent.

Yet the abandonment of coal has become a scramble. S&P Global Platts Analytics estimates that the global pipeline of new coal-fired power plants has collapsed since the Paris Agreement, from 1,175 gigawatts in 2015 to 313 GW of future capacity in the pipeline.

“What I thought was most interesting about Glasgow was a shift in perception, exemplified by South Africa’s announcement that it had struck a deal to essentially get a group of countries to collectively shell out 8.5 billion dollars to support a just transition away from coal, ”said Navroz Dubash of the Center for Policy Research.

“And in India, according to some reports, India has spoken directly to the World Bank about an even larger sum to support a soft landing on coal.

“I think we’re going to see a lot more of this type of financial package that goes beyond public money.”

Update: December 27, 2021 9:59 am

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