Make or Break: 5 key talking points that will determine the success of COP26

edie outlines what can be expected and what needs to happen at COP26

It’s COP26 Eve and the buzz surrounding the two-week summit in Glasgow has reached fever pitch. Amidst the news reports, flurries of green policy announcements and inboxes overflowing with meet-up requests for next week, COP26 may well feel a little overwhelming and confusing.

Confusing is an apt description for COP26, considering its build up. There have been a plethora of logistical nightmares caused by the Summit’s postponement last year, while on the political front, the last 12 months have been anything but smooth.

The original COP President was replaced, there have been financial rows between the UK and Scottish Governments and then, just days out from the Summit, the Chancellor relaxed the cost of domestic flights in the UK – a major source of UK emissions.

COP26 has stood stoutly in the calendar for more than a year now, but green policy progress in the build up to this two-week climate extravaganza has left some concerned that the urgency of the climate crisis won’t be matched in Glasgow.

The uncertainty that paved the road to COP26 looks set to swell when formal negotiations actually start. From an outsider looking in, or those walking the streets of Glasgow for the next two weeks, trekking from pavilion to pavilion, it is easy to get lost in noise of global climate negotiations.

Even the negotiations are multi-layered, with a potential stumbling block in one area likely to create a ripple effect across the entire Paris Agreement rulebook. As you can tell from edie’s recent Climate Action Workshops and Sciberia’s interpretation of those discussions, discussions on the climate crisis should cover every part of the economy.

So, putting it plainly, what does success at COP26 look like? Here, edie breaks down the key  discussions that will either make or break the two-week summit.

1) The Paris Agreement doesn’t need tearing up

For all the murmurs of a “Glasgow Agreement” COP26 won’t necessarily be branded as a “bad COP” if no new agreement takes shape.

The science is already clear. Reach net-zero emissions by mid-century, which is largely in alignment with the 1.5C target of the Paris Agreement. So Glasgow is less about tearing up the rulebook but rather, actually establishing it.

“This is going to be quite a nuanced event,” the COP26 unit’s business engagement lead, Bridget Jackson, recently told edie at a Climate Action Workshop. “It’s not as clear-cut as when the gavel came down on the Paris Agreement. It will be much more won in the narrative this year and, so, for all of our sakes, we have to make sure we come out of this with a sense of momentum – a feeling that it really can be done.”

2) Bold new climate commitments are required

The UN estimates that global emissions as a result of national and government commitments are on course to reach 2.7C, putting the world massively off course to deliver the Paris Agreement.

As such, a crucial negotiation taking place at COP26 will be that of getting nations to set more ambitious decarbonisation targets aligned to climate science.

We recently polled the edie audience to ask them what major announcement they wanted to take place at COP26. A resounding 69% answered “bold new Nationally determined contributions (NDCs)” to the Paris Agreement.

Change in this area is starting to happen. Around three-quarters of global GDP are now covered by actual or intended net-zero targets. Some nations have left it late to submit new climate action plans, while others will do so either during or after the negotiations.

Australia, for example, has confirmed that it will legislate for a 2050 net-zero target, stating that it will cut annual emissions by 80% by this time before offsetting the residual 20%. Also having set a new net-zero pledge is Saudi Arabia. As with Australia, Russia and the UAE, skepticism abounds. For Saudi Arabia specifically, the target is likely to exclude fossil duel exports.

3) The economy needs to be re-written

Finance has emerged as one of the key themes going into COP26. The coronavirus pandemic led to the creation of the “build back better” mantra whereby nations would realign funding into low-carbon, resilient and sustainable markets as part of a “green recovery”.

While high-level politicians have eagerly talked up this new dawn of finance, the reality suggests there is a danger of business as usual slipping back into the mindset. According to the UN, only around 20% of total recovery investments made by nations between March 2020 and May 2021 are going towards activities likely to reduce emissions, and almost all of this funding has been spent by the G20.

Earlier this week, the COP26 Presidency outlined plans to finally make good on a commitment from OECD nations to provide $100bn of climate finance to poorer countries annually, but stated that the full amount will not be delivered this year or next.

Much of the negotiating at COP26 will likely revolve around finance; how it is provided and how it is spent. As developed nations ratchet up green spending and lending it is hoped that new innovations will emerge that not only decarbonise, but also enable carbon removal. Governments have too often taken one step forward with climate commitments only take another step back by announcing plans to back projects that exacerbate the climate crisis. This has been notable in the UK, with the £27bn roads programme, airport expansions, coal mines and oil fields all causing frustration amongst green groups.

A successful COP26 doesn’t just outline how money is spent, but all disincentivises spending on high-carbon infrastructure and sectors. It’s a tricky balancing act, but one the world needs to agree on.

4) The formation of Article 6

Article 6 is a by-product of the green finance discussions. Article 6 of the Paris Agreement aims to create a framework for countries and companies to participate in growing international carbon markets to offset emissions.

Article 6 is one of the final pieces of the Paris Agreement rulebook that is yet to be agreed upon, with the latest set of negotiations falling apart in 2019.

Some believe that Article 6 will enable markets to shift to the low-carbon trajectory more quickly, lowering costs in the process. Others believe that carbon markets are a murky labyrinth of confusion, double-counting and a reliance on the “net” in net-zero rather than decarbonisation.

Bloomberg is reporting that Brazil has softened its stance on Article 6 of the Paris Agreement. The Taskforce on Scaling Voluntary Carbon Markets estimated in 2020 that the current market for offsets will need to grow by at least 15-fold by 2030 if the private sector is to align with the Paris Agreement’s 1.5C trajectory. By 2050, it may need to be up to 160 times bigger than in 2020. 

According to the International Monetary Fund, the global average carbon price in 2020 was just $3 per tonne. Some nations, including Canada, have set out requirements for carbon pricing to rise exponentially in the coming years; some Canadian provinces have committed to CAN$170 per tonne in 2030, up from CAN$10 in 2018. But this remains the exception, rather than the norm.

Any formation of a global carbon market requires a lot of intricacies. Some countries are worried that credits could flood the market and mean that emissions aren’t actually offset. The formation of a “credible” and global carbon market would be an unrivaled step forward to net-zero emissions.

5) Nature, adaptation and mitigation

Last month, the first half of the UN’s Convention on Biological Diversity (CBD) came to a close in Kunming, with China and the EU scaling up commitments to funding for nature conservation and restoration.

Almost 3,000 delegates participated in the 15^th CBD, also known as the Biodiversity COP, to set the stage for the adoption of the UN’s post-2020 biodiversity targets internationally. In its current form, the draft plan outlines pledges to halt nature loss by 2030 and deliver a net-positive impact thereafter, that humanity may “live in harmony with nature” in all geographies by 2050.

However, nature is intertwined with the climate crisis and how we protect, enhance, restore and use biodiversity to combat climate change and improve resiliency in the long-run will be crucial to negotiations at COP26.

All the key discussion points at COP26 interact and impact each other. Finance is needed to raise capital for restoration efforts, and restoration, adaptation and resiliency will all help nations meet their climate targets. Yet the market signals for these, and indeed Article 6, will only be strengthened if nations set updated NDCs and signal that this is way forward for the world.

COP26 is only as strong as its weakest part. If one aspect of the negotiations fall, other areas become weaker as a result. So the success of COP26 may not be defined by one single area of action. But world leaders must use the two-week summit to start delivering a blueprint that builds a more resilient future.

Matt Mace