COP26: What did it achieve?

On 13 November 2021, the 26th UN Climate Change Conference of the Parties (COP26) concluded ‘successfully’ with the adoption of the Glasgow Climate Pact. There have, however, been a variety of assessments as to what the convention actually achieved. For example, environmental activist Greta Thunberg denounced the summit: “It is not a secret that COP26 is a failure…. Two weeks of business as usual, blah, blah, blah!” (Nikkei 2021).

Prime Minister Boris Johnson of the UK, the host country, enumerated what he aimed to achieve at COP26: (1) securing global net zero by mid-century and keeping 1.5℃ global warming within reach; (2) adapting to protect communities and natural habitats; (3) mobilising finance; and (4) completing negotiations on the Paris Agreement rule book. Although incomplete, it may at least be said that these results have been achieved. I believe COP26 was a success – despite some reservations – surpassing previous expectations.

Of the above expected outcomes, Britain placed the greatest emphasis on its aim of holding increases in global average temperature to 1.5℃. The Paris Agreement states:

This Agreement…aims to strengthen the global response to the threat of climate change…by: Holding the increase in the global average temperature to well below 2℃ above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5℃ above pre-industrial levels…. In order to achieve the long-term temperature goal…, Parties aim to reach global peaking of [greenhouse gas] emissions as soon as possible…and to undertake rapid reduction thereafter…so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.

The most demanding target of 1.5℃ underlies the aims of global net zero by 2050 and a 45% reduction in global emissions by 2030, as well as other goals such as phasing out coal power, ending the sale of internal combustion automobiles (Weder di Mauro 2021).

That is why, at the 2021 G7 Cornwall Summit hosted in Britain, the UK first incorporated into the Summit Communiqué the 1.5℃ target, as well as the goal of net zero by 2050 and other initiatives, including transitioning away from unabated coal capacity and halting public financing for coal power abroad.

Britain’s next strategy was to align with Italy, the 2021 G20 Rome summit host, and have similar messages reflected in the G20 Leaders’ Declaration. However, China, India, Russia, Saudi Arabia and other countries strongly opposed such a move, arguing that an emphasis on the 1.5℃ and 2050 net-zero goals was almost equal to the renegotiation of the Paris Agreement. China and India, both highly dependent upon coal, pushed back strongly against eliminating coal from their domestic energy mixes, and Russia and Saudi Arabia followed suit over concerns that a ban on coal might be extended to all fossil fuels, including oil and natural gas.

As a result, the G20 summit only reconfirmed the temperature targets of the Paris Agreement. Phasing out domestic coal capacity was not included as a G20 commitment, which disappointed US President Biden and UK Prime Minister Johnson.

Based on these events, I predicted that COP26 was unlikely to reach an agreement beyond what was agreed at the G20 summit. However, the Glasgow Climate Pact adopted at COP26 includes, among other commitments: (1) a resolution to pursue efforts to limit the temperature increase to 1.5℃; and (2) recognition that limiting the rise in temperature to 1.5℃ requires reducing global emissions by 45% by 2030, relative to the 2010 level, and to net zero around mid-century.

Consequently, the decade starting 2020 is regarded as a ‘critical decade’, and leaders call on COP27 to adopt a work plan to scale up actions during this time. The Pact also requests the parties to revisit and strengthen their nationally determined contributions, as necessary to align with the Paris Agreement temperature goal by the end of 2022.

This surpasses what was achieved at the G20 summit. Predictably, China, India, Saudi Arabia and other nations reacted negatively to broaching the 1.5℃ target. While G7 nations and emerging countries often clash at G20, COP gives more space to vulnerable, less-developed nations and small island nations that are susceptible to the damage wreaked by climate change. Environmental NGOs can also exert more influence, inside and outside of the chambers.

China, India, and other emerging nations are concerned about the effect that the 1.5℃ target will have on their economic growth. Resource-rich nations are worried about the effect on their fossil fuel exports. Meanwhile, small island nations and less-developed nations anticipate that raising the temperature target will increase their need for assistance to adapt to climate change as well as manage related losses.

During an informal stocktaking by the COP26 President, the plenary erupted into great applause whenever strong support for the 1.5℃ goal was expressed. Britain succeeded in leveraging that sentiment to push the 1.5℃ goal to the forefront.

In addition, the Glasgow Climate Pact includes the wording “to accelerate the…phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies…” At the United Nations General Assembly in September 2021, President Xi announced that China would not build any new coal-fired power projects abroad, which allowed the G20 to include in its message – like the G7 – a halt to public financing for new coal capacity abroad.

Yet, the COP26 agreement extends to domestic coal capacity. The original proposal was worded “phase-out coal”, which was much broader and went beyond the electricity-generating sector. Encountering strong opposition from China, India, Saudi Arabia, South Africa, and other nations, just as with the 1.5℃ target, the wording was modified to “phase-out of unabated coal power.” However, India, China, South Africa, and other nations were still not satisfied. India argued that “inexpensive and stable electric power for poor people is the top priority for countries.” “Phase-out” was revised to “phasedown” and the wording was added: “while providing targeted support to the poorest and most vulnerable in line with national circumstances and recognising the need for support towards a just transition.”

Although the EU, small island nations, and other countries rallied in unison against this, they accepted it reluctantly from the standpoint of passing a package that would achieve consensus.

Thus, the 1.5℃ target was strongly highlighted and the COP26 outcome included the formulation of a very ambitious work plan. This was the first time that wording targeting specific energy sources was included in any decisions related to the Paris Agreement. While toned down from the original proposal, the Glasgow Climate Pact is lauded by environmentalists as a historic agreement.

While Britain’s diplomatic skill in working out an agreement beyond the line agreed at the G20 deserves accolades, we cannot simply be jubilant. The strong UK push for the 1.5℃ target and net zero in 2050 has significantly altered the nature of the Paris Agreement, a document that strikes a delicate balance between the top-down approach of setting temperature targets for the entire world and the bottom-up approach where each country sets its own targets according to specific national circumstances.

Aiming for global net zero by 2050 will likely create a fierce battle between industrialised and developing nations over limited carbon budgets through the year 2050. Already India has argued that if developed nations strongly push global net zero by 2050, they should achieve net zero much earlier than 2050, go into negative emissions thereafter and give carbon space to developing nations. India has also contended that if developed nations are demanding that developing nations raise their nationally determined contributions to ultimately achieve net-zero emissions, they should substantially increase financial flows to developing countries, to $1 trillion annually.

While the world is significantly off track from the 2℃ pathway, Europe and the US pushed through ambitious targets. This will likely come back to haunt industrialized nations over the coming decade, in the form of incessant pressure from developing nations calling them to achieve carbon neutrality much more rapidly and to significantly increase assistance to developing countries.

The Glasgow Climate Pact calls for countries to strengthen their nationally determined contributions in line with the Paris Agreement temperature goal and submitted the new figures by the end of 2022, but it is unlikely that China and India will revise their targets. Both nations, which have embraced the 2060 and 2070 net-zero targets, will no doubt argue they are respecting the Paris Agreement provision of “net zero in the second half of this century”.

Instead, as the host country of the 2022 G7 Summit, Germany – whose Green Party is in the country’s ruling coalition – could propose that G7 nations move the 2050 net-zero target forward and further raise the 2030 nationally determined contributions to urge China and India to follow suit. The result would be further expansion of the market for Chinese made solar panels, windmills, and storage batteries, creating a windfall for China.

The argument over coal phase-out is likely to resurface with certain target years and could further extend to the phase-out of all fossil fuels. Such discussions are divorced from the reality of the energy landscape. A major cause of the energy crisis – which is overwhelming Europe and spreading to Japan – is that supply has not kept up with the increase in energy demand generated by the economic recovery. A significant cause of that imbalance is the stagnation in upstream investment in petroleum and gas.

Meanwhile, the US and EU nations have put their names to a joint declaration to end public financing for the fossil-fuel sector. This could further stagnate upstream investment, resulting in a tightening of energy supply in the future as well. The environmental fundamentalism originating in Europe has demonised coal and, in turn, raised the global demand for gas. While the Biden administration is prohibiting domestic oil production in federal lands, it has called on OPEC and Russia to ramp up production. And while Britain is at the forefront of coal bashing, power shortfalls due to very weak wind and skyrocketing gas prices obliged it to mobilise old power plants to maintain power supply. These are contrary to the climate narrative that calls for the phase-out of fossil fuels.

Experience shows that when a secure and affordable energy supply is at risk, the climate agenda can easily be set aside. We should ask ourselves whether the proliferation of the COP standard that rejects realistic discussions will make the world happier.

Will global dissemination of the standards created at these climate conferences, which excludes realistic discussion, really be a positive step for the world? We need to think long and hard about that.

This column first appeared on the website of the Research Institute of Economy, Trade and Industry.