Global menu

Our global pages

Close

COP26 Closure of Negotiations, 13 & 14 November 2021

  • Global
  • ESG
  • ESG - Sustainable Finance
  • Financial services and markets regulation - ESG
  • Energy and infrastructure - Clean energy

15-11-2021

COP26: Saturday and Sunday – The Closure of Negotiations

As COP26 President, Alok Sharma, lowered the gavel at 7:41pm on Sunday, the climate commitments of nearly 200 countries were enshrined into the Glasgow Climate Pact.

In a climate conference that has been heralded as better than expected but worse than hoped for, the new Glasgow Climate Pact “keeps the 1.5°C goal alive” according to UK Prime Minister, Boris Johnson. The Pact was nearly derailed due to countries’ resistance to ditching coal, with last-minute changes to the wording from “phase out” to “phase down” on coal usage.

Despite this, The Pact remains the first ever global climate deal to explicitly address the need to reduce consumption of fossil fuel and recognises its role in climate change, with several other key sector-commitments contained within the Pact: 

Deadlines

  • Being brought forward by three years, countries are now expected to set-out their stronger emissions targets by November 2022’s COP conference in Egypt, instead of the 2025 date as set out in the Paris Agreement. This is designed to focus minds and ensure that Glasgow’s conference has a lasting impact on the commitments made by the nation states. These firming-up of commitments were somewhat watered down before they could even come into effect, with China and India insisting that the wording include “taking into account different national circumstances”.
  • More than 100 countries (not including Russia, China and India) have committed to reducing methane emissions by 30% in the next 9 years. If fully implemented the commitment could limit projected global warming by around 0.2°C by 2050.
  • The Paris Rulebook was also announced, setting out how nations must demonstrate their commitments to the pledges made in Paris, with systems such as carbon markets and carbon credits contained within: allowing countries to trade and sell carbon in order to bring countries closer to meeting their targets.

Net Zero Targets

COP26 was unable to bring every country to the table on a target of net zero by 2050, but countries were encouraged to set out their net zero commitment dates regardless:

  • India - 2070
  • China – 2060
  • Russia – 2060
  • Saudi Arabia - 2060
  • USA – 2050
  • EU – 2050
  • Japan – 2050
  • Germany – 2045

Energy

  • Despite the last-minute wrangling, 23 countries have committed to phasing out coal-fired power stations, with countries including Poland, Spain, Ukraine, Egypt and Singapore. However fossil fuel giants like the US, Russia and China refused to sign up to the Global Coal to Clean Power Transition Statement. The Statement gives countries until “the 2030s or as soon as possible thereafter” to phase out coal. In a separate Agreement signed by the US, UK, Italy, Canada and 16 more nation states, the countries pledged to halt the financing of fossil fuels overseas.
  • Countries also committed to preventing any new licences being granted for oil and gas exploration. Members of the Beyond Oil and Gas Alliance include Wales, Denmark, Ireland, France, Sweden and Greenland. Notably Scotland and England did not commit to the Alliance at this stage.
  • The World's First Transnational Solar Panel Network GGI-OSOWOG Launched in Glasgow. The International Solar Alliance (ISA) unveiled plans on Saturday 13 November saw plans for the first transnational network of solar power grids, known as the Green Grids Initiative One Sun One World One Grid (GGI-OSOWOG), at the COP26.
  • 19 countries and financial institutions agreed to an end to financing of fossil fuels abroad. Signatories include the US, UK, Denmark, Finland and some ‘developing’ countries, including Costa Rica, Ethiopia, Gambia. With the European Investment Bank being one of the larger financial institutions involved. The non-binding agreement will mean that the countries and financial institutions involved will vow to halt all financing for fossil fuel development overseas, diverting an estimated $8billion per year into green energy.

Deforestation

  • The Forests and Land Use Declaration signed by 137 Countries covering over 91% of the earth’s forests committed to “halting and reversing” land degradation by 2030. The Declaration was also backed by £14 billion of private and public capital, earmarked for the protection of the planet’s most vulnerable and valuable forests.
  • More than 200 scientists collaborated on a new report finding, the world's approach to the Amazon rainforest “must be transformed” to avoid an irreversible, catastrophic tipping point.
  • Brazil, Ecuador and Canada were among the signatories to a COP26 declaration last week that promised to halt deforestation by 2030. Conservationists are sceptical, especially in Brazil where protections have weakened and deforestation rates have surged under president Jair Bolsonaro, to their highest levels in a decade.

Transport and Infrastructure

  • With Downing Street privately briefing that they were “disappointed” by the Transport Sector’s commitments made at COP26, likely off the back of a failure by automotive giants like Hyundai-Kia, Volkswagen, Toyota, and Renault-Nissan to sign up to the net zero commitments, manufacturers like Ford, General Motors and Daimler all took part in the pledge to reduce emissions.
  • Despite the frustrations, over 30 countries and some of the world’s largest car manufacturers did commit to work together to make all new car sales zero emission globally by 2040, and by 2035 in leading markets.
  • A new report released on Saturday 13 November by ABI Research and sponsored by InterDigital, Inc. (NASDAQ: IDCC) established a forecasting model comparing 4G and 5G networks to understand how new generations of wireless can significantly improve carbon efficiency. To quantify the impact of enterprise 5G, the paper considers the direct energy efficiency of network infrastructure and end-devices, and its indirect effect on carbon dioxide emissions. Current deployments of 5G have the potential to reduce global energy consumption by 290,000 terawatts by 2030, and that number balloons to over 900,000 terawatts of energy reduction under ubiquitous 5G coverage.

Dom Lacey comments “On the current state of technology there remains an inherent tension between mobility and carbon emissions. The absence of a clear multi-modal commitment to achieving zero emission transport reflects this. There appears a willingness across industry and governments, but in the medium term its seems likely that policy makers will focus on decarbonising public transport infrastructure and encouraging EVs - the approach to maritime and air transport is more technologically, socially and economically challenging. “

Finance

  • COP26 again fell short in reaching the 2009 commitment made to provide $100 billion in capital (both private and public) each year, in order to help developing nations meet their climate targets and protect against the worst of climate change. The commitment is however projected to be met by in 2 years’ time (2023).
  • Executives and money managers say COP26 has “opened their eyes” to new perspectives. Companies have strengthened targets or set new pledges; more than a dozen FTSE 100 businesses joined the UN's "race to zero" campaign in the three months before COP.
  • The UK Chancellor, Rishi Sunak confirmed that by 2023, firms caught within the scope of new domestic climate rules will have to set out detailed publicly available plans. In a bid to combat greenwashing, an expert panel will determine the national standards that the published plans need to meet.

Looking forward, one of COP26’s greatest achievements is that we now only need to look forward 1 year. With commitments for countries to return to Egypt next year with firm and transparent action-plans on how they intend to keep the goal of 1.5°C alive. With Glasgow’s conference now concluded, Cairo’s conference in 12 months’ time may well be able to fill in some of the finer climate commitment details.

There are certainly successes to be taken from COP26; with countries across the globe finally recognising, in black and white text, the importance of reducing our reliance on fossil fuels. Now more than ever, sectors and countries will undoubtedly be looking towards how they can fund and utilise the green technologies of the future on the road towards net zero.