COP26: What to expect
COP26: What to expect
COP26 is rapidly approaching and the eyes of the world will be on Glasgow. The conference is garnering an inordinate amount of press and an awful lot of political fanfare - but aside from all the noise, what are the real details? Why should we be excited, what should we expect and what will have changed once it’s all over.
We’ve put together a few key points to help you navigate what it all means.
What is cop26?
It’s not the most self-explanatory title; COP26 is the shortened form of ‘Conference of the Parties 26’. ‘Conference’ being the event, ‘Parties’ being those international key players who are invited and ‘26’ because this is the 26th such event that has taken place.
The idea of COP came about at the 1992 Rio Earth Summit as a way for the United Nations Framework Convention on Climate Change (UNFCCC) to regularly convene global leaders to work on strategies to mitigate global climate change.
Following the 2015 Paris Climate Accord, the annual COP gatherings have focused on delivering on the goals set out in the Accord - most notably the aim of keeping global warming to “significantly below 2 degrees C” and if possible, to “pursue efforts to cap warming at 1.5 degrees C”.
COP26 was due to take place in 2020 but was postponed to October 2021 due to the Covid-19 pandemic.
what are the aims?
As we mentioned, the overall aim is to make sure the international community is working towards the agreements of the Paris Climate Accord. Governments around the world have been under pressure from the UN to reduce their carbon emissions significantly before 2030, or even 2025. This pressure will only increase as the conference gets under way and as it becomes ever clearer that the 2 degrees C figure will be surpassed if human activity carries on unchecked.
With game changing cuts in global carbon emissions as the headline, the conference has to look at international, systematic issues that both contribute to carbon emissions and, conversely, will be affected by carbon emission reductions. The 5 key areas to be covered are:
• The energy transition
Renewable energy is the foundation of the green industrial revolution, and the green industrial revolution is the foundation of climate change reversal. Heating, transport, and housing will all deliver enormous reductions in carbon emissions if they work in tandem with clean national grids. Put another way, the decarbonising ripple effects of clean energy will be transformative. The power sector accounts for almost ¼ of global greenhouse gas emissions meaning the transition to clean energy will deliver decarbonisation that puts countries well on track to meet the aims of the Paris Agreement. The success of this transition will come down to efforts at a national level but it is unlikely that the discussions at COP26 will create any official blueprints or global agreement on clean grids. Rather, the discussions will likely create a net-zero end date for nations urging them to set new ambitious targets to completely decarbonise clean energy.
• The shift to zero-carbon transport
The focus on transport at COP26 will be two-fold. Firstly, nations must agree on how the sector will be decarbonised - primarily through innovations in electrification and sustainable fuels. The global Electric Vehicle market, for example, is expected to make up 50% of all new car sales by 2040, and this will need to be a key focus point for discussions.
Secondly and more importantly, nations must consider the way that transport is used, promoting walking, cycling and mass transit infrastructure, rather than private/individual transportation, whilst ensuring those in developing countries and rural areas have access to basic necessities without extensive travel requirements.
• Adaptation and resilience
The well publicised IPCC report from August this year outlined that $1.8trn in investment, spread across various adaptation solutions such as early warning systems, climate resilient infrastructure, improved dryland agriculture, global mangrove protection and resilient water resources could result in $7.1trn of avoided costs and the benefits of innovative adaptation. Crucially, the IPCC has warned that while land and oceans currently absorb around half of all human-made carbon emissions, natural carbon sinks such as trees and soils could lose their carbon sequestrating abilities unless emissions are curbed and natural resources are better managed.
COP26 has a specific aim to address exactly this – to strategise the best way for more finance (both public and private) to be put in place so that nations can improve warning systems, flood defences and build infrastructure and agriculture that avoids further loss of life and natural habitats while improving overall resilience.
• Nature and the safeguarding of ecosystems
There are a plethora of overlapping, detailed and very complicated definitions of “Nature-based Solutions” (NbS). A good basic definition comes from the International Union for Conservation of Nature as “actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits”. NbS cover biodiversity ranging from forests, peatlands, mangroves, wetlands, savannahs, coral reefs and other landscapes.
The role of COP26 is not just to explore how NbS can help the world reach net-zero, but set out clear definitions of what Nbs actually covers, and create financial markets that ensure that investment is funnelled into effective and long lasting nature based solutions.
• Unleashing green finance
The COP26 Private Finance Hub, led by Mark Carney in his capacity as UN Special Envoy and Adviser to the Prime Minister, will steer conversations that aim to mobilise private finance towards net-zero solutions. As part of the Bank of England’s preparation for the conference, they released a statement saying that they wanted to “ensure that every professional financial decision takes climate change into account”.
The strategy seeks to develop “open-source, business-relevant reference scenarios” for regulators, financial firms and businesses to test climate resilience investment strategies and establish a coalition of central banks that are “committed to issuing guidance on risk management and running stress tests”. Financial experts have also been tasked with developing KPIs to show how aligned an investment portfolio might be with the needs of the Paris Agreement.
what will happen?
The conference takes place over 2 weeks; roughly speaking, the first week (31st Oct – 6th Nov) will focus on technical negotiations led by government officials, with the second week (7th – 12th Nov) involving High-level Ministerial and Heads of State to oversee final negotiations and outline any official agreements.
The 5 broad aims all have a designated day for discussions plus issues central to achieving net-zero in an equitable, inclusive way such as public empowerment, gender, and the built environment. Critical too – for obvious reasons - will be youth engagement.
What does this all mean for business?
What this all means for business is 2-fold. Firstly there is plenty of opportunity to burnish your ESG credentials by making sure your clients and customers know how you’re aligning to the conference and how your organisation (even in a small way) is helping to further its aims. We’ve written extensively on how ESG is ever more of a competitive advantage and the conference this year will serve to turbo-charge the opportunity.
The second is compliance and this is rather less optional. The UK Government has just passed into law the Green Claims Code and is tightening requirements around corporate carbon emissions; in the US Joe Biden is negotiating a environmental package worth trillions of dollars, and the EU published its ‘Fit for 55’ package of energy and climate laws aimed at reaching the EU's 2030 goal of cutting emissions by 55%, and putting it on track to hit net zero by 2050. In short, global law is – finally – doubling down on what responsible business looks like. Keeping abreast of such policies means a company remains compliant, relevant and profitable. It also means that every company has to take responsibility for its actions and environmental impact - there’s no easy way of putting this but it means we all have more work to do and the sooner we make a start, the easier that workload will be.
And after the conference?
This will depend very much on what is agreed during the conference. A key factor will be if leaders agree to increase local efforts to mitigate climate change, there will be changes to how much carbon each country is allowed to emit - Nationally Determined Contributions (NDCs). As NDCs are just that - nationally determined - governments will have increased responsibility to reduce their populations’ carbon emissions which has implications for how we all work, travel, holiday and do business.
There will be a decision and announcement on who will host COP27 - under the UN’s global rotational system, an African nation will host COP27 scheduled to take place in November 2022.
COP26 isn’t the end point of the global movement to net-zero, but is a catalyst for increased climate action. It is a given that the low carbon transition will continue, and that its disruptive effects will be profound. Just how sudden any disruption will be depends on how bold leaders choose to be in Glasgow.
We have plenty to resources to help your company move towards a more environmentally responsible business model. Take a look at our guest blog on “Common sense business solutions to the climate crisis”, the UN SDGs, or our guide on how to establish your ESG policy.
Alternatively please get in touch with us direct.