November 9, 2021

All you need to know from COP26 Week 1

Photo credits: UNFCCC
Photo credits: UNFCCC

Hello! Welcome to Week 2 of COP26 where negotiations are getting serious and all is to play for before the close of the conference on Friday. With so much still to discuss around Article 6 after stalling of talks on Saturday, will ministers get the job done or will we be left in the lurch? Read on to hear a summary of key events so far and what to look out for this week.

Who are you in the room...optimist or skeptic?

For the optimists in the room...

  • Net Zero Pledges: A new IEA report suggests that the world is on now track to limit warming to 1.8C this century as a result of updated national pledges and joint commitments made in and around COP26's climate summit. Despite a renewed level of optimism, India committed to net zero by 2070 with China, Nigeria and Russia aiming for 2060, ten to twenty years later than what is needed to reach net zero to stay within the 1.5C Paris Agreement climate change goal post. Global net-zero pledges from countries now cover 88% of emissions.
  • Deforestation: COP26's first major deal was signed which saw 100 countries committing to reverse or end deforestation by 2030, with $19.2bn of public and private funds dedicated for the goal. Countries who have signed the pledge - including Canada, Brazil, Russia, China, Indonesia, the Democratic Republic of the Congo, the US and the UK (the full list is here) - cover around 85% of the world's forests. This goes beyond the 2014 New York declaration with $1bn for indigenous communities.
  • Methane: World leaders have signed up to the Global Methane Pledge to cut global methane emissions by 30% by 2030 (compared to 2020 levels). The Pledge is an initiative led by the US and the EU and more than 100 countries have now committed. Methane is a greenhouse gas that has a climate change impact many times stronger than CO₂ (over 80 times more powerful than carbon dioxide as a warming gas over a twenty-year timeframe) and reduction of methane emissions are widely regarded as the most effective strategy to keep the 1.5C climate goal within reach. More than half of global methane emissions arise from human activities and 95% of these emissions come from three sectors: agriculture, fossil fuels and waste. Success will rely on sharp actions tackling major sources of methane with a focus on ending routine gas flaring at oil production sites, recovery and use of escaping gas, and reducing leaks from long-distance pipelines. The European Bank for Reconstruction and Development, the European Investment Bank, and the Green Climate Fund have committed to support the Pledge through both technical assistance and project finance.
  • Agriculture + Land Use: An initiative led by the UK government saw 45 governments pledge urgent action and investment to protect nature and shift to more sustainable ways of farming. 95 high profile companies from a range of sectors commit to being ‘Nature Positive’, agreeing to work towards halting and reversing the decline of nature by 2030. The UK is aiming to engage 75% of farmers in low carbon practices by 2030.

For the skeptics in the room...

  • Coal: More than 40 countries agreed to phase out coal-fired power plants. Canada, South Korea, Ukraine, Indonesia and Vietnam said they would quit this dirtiest form of fossil fuels between 2030 and 2040. The timeline for delivery here is vague and US, China and India were all missing from these non-binding commitments. Coal-fired power currently produces around 37% of the world's electricity and it is still one of the cheapest sources of energy for developing countries. A transition away from coal in the next 19-29 years to reach net-zero would require vast financing.
  • Article 6: Final negotiation text was due on Saturday. But trying to find a middle ground between the ambitious EU, finance and adaptation demanding Africa and trading hungry rich nations still remains a challenge. Although ministers were involved earlier in July and August to discuss Article 6, it still looks likely talks will be extended beyond the close of COP 26 to next week. Drafts of negotiating documents have still technical points outstanding around articles 6.2, which covers internationally-transferred mitigation outcomes (ITMOs), article 6.4, which covers the creation of a centralised hub, and article 6.8, which covers non-market mechanisms. The main areas of disagreement which will be discussed further this week are the role of corresponding adjustments under both Articles 6.2 and 6.4, the fate of old Kyoto offsets under Article 6.4, and the shares of proceeds from a centralised market developed under Article 6.4, as well as the governance structure for that entity.
  • Carney’s Voluntary Carbon Markets Taskforce: An event to promote carbon offsetting at COP26 was hit by multiple protests. Greenpeace International Executive Director Jennifer Morgan stood holding placards reading: 'Your Taskforce Is A Scam' whilst Greta Thunberg walked out of the event saying "This is greenwashing". Greta later tweeted "This Taskforce, and other schemes like it, are scams that could trash the goal of limiting global temperature rise to 1.5°C.” The stance against offsets was to be expected from environmental activists, but the seniority and reach of Morgan and Thunberg should not be underestimated. To what extent this may influence corporate demand is still to be seen as prices and volumes of voluntary credits continue to soar.

What's happening this week?

Focussed on adaptation, the second week of negotiations will focus on some of the hardest elements, including issues around:

  • Regulations on how countries measure and report on their emissions and climate actions
  • Whether, and how, carbon trading can play a role in how countries meet their commitments, under Article 6 of the Paris agreement
  • How countries can be helped to adapt to the impacts of the climate crisis, and how they can receive financial help for any impacts too great to be adapted to – known as loss and damage
  • Common timeframes for emission reduction commitments, how to enable enhanced adaptation action and averting, minimising and addressing loss and damage
  • Rules for the transparent reporting of action and support
  • Means of implementation, including the initiation of deliberations on a new goal for global climate finance after 2025
  • Responding to the latest science and the ambition of current emission reduction targets

Who will win, the optimist or the skeptic? Stay tuned for more updates at the end of this week as we review the highs and lows from COP26, Article 6 updates and where this leaves us moving forward.