COP27: Looking Back to Think Ahead
In the lead up to COP27 in November, we will be releasing a series of articles to help drive conversations and raise awareness of the issues we are facing as a global community. This first article revisits and reflects on the outcomes of COP26, the progress that has been made internationally since Glasgow, and what we can expect at COP27.
Our Insights
Recap of COP26
In October and November 2021, the United Nations Climate Change Conference of the Parties (COP) held its 26th instalment in Glasgow, Scotland, featuring 120 world leaders, 50,000 registered delegates and 38,000 participants on behalf of 194 countries. The outcomes and discussions from the summit can be seen to represent the reflections of the interests, contradictions, and current state of political will with regards to maintaining the 1.5 degree aim of the Paris Agreement.
The two key outcomes which resulted from the summit included:
The signing of the Glasgow Climate Pact, which calls on signatories to present stronger action plans within an expedited timeframe. The Pact also urges an increase in climate related financial contributions. This was the culmination of a series of decisions and resolutions that build upon the Paris Agreement; and
Agreement on the Paris Rulebook, setting out how Paris Agreement signatories will set out their NDCs to reduce emissions. This includes standardised norms related to carbon markets, and the purchasing of emissions reductions from nations which have exceeded targets.
Other notable outcomes outside of these key outcomes included:
153 countries putting forward new 2030 emissions targets, driven by;
Movements away from coal (reduction of 76% in global pipeline of new plant) and deforestation (both stopping and rehabilitating across 91% of the world’s forests);
Reductions in methane emissions by 30% (this includes six of the world’s top 10 methane emitters: the United States, Brazil, EU, Indonesia, Pakistan, and Argentina); and
A ramp up in vehicle electrification (110 companies have signed up to having zero-emission vehicle fleets by 2030).
80 countries now being covered by an Adaptation Communication or Adaptation Plan;
$350M USD was committed to the UNFCCC Adaptation Fund (nearly triple the previous highest collective), and $600M pledged to the Least Developed Countries Fund;
A plan was introduced to agree a new post-2025 climate finance goal, which is expected to mobilise USD $500bn in climate financing until 2025;
40 countries (accounting for 70% of Global GDP) endorsed the Breakthrough Agenda, a collaborative international clean technology plan.
Overall, COP26 arguably provided the greatest step towards setting the required targets to reach net zero and uphold the Paris Agreement but was still lacking in providing an action plan and pathway towards creating movement. At a minimum, the current targets are estimated to only be sufficient to reduce global warming to under 2 degrees at a minimum, with political will being the main bottleneck to Governments collaboratively and collectively reaching targets.
Progress on COP26 Goals
There has been mixed progress on the COP26 goals since their inception and whilst generally positive, there is still work to be done across formal policy and action. COP President Alok Sharma summarised this sentiment well, saying “It is leaders who made promises, and it is leaders who must honour them. So, when countries meet in Egypt in six months’ time, they must show a global audience that the confidence we inspired in the international system was not misplaced”. For example, since the agreement for the $100bn Delivery Plan was first developed, little has been achieved on the path to doubling adaptation finance. While adaptation finance has doubled from 2013 levels to US$20.1 billion in 2019, it is still behind mitigation finance by ~US$30 billion. However, some significant achievements have been made, with the addition of ~2,000 parties to the UN Race to Zero Campaign (now totalling ~7,000 parties, which collectively covers nearly 25% of global CO2 emissions and 50% of global GDP), the announcement of a new independent High-Level Expert Group on investment in climate action to develop policy and encourage investment, and the requirement to release improved NDC targets (released recently).
From a jurisdictional angle there is a mix of policy commitments and actions underway, with a varying blend of focal points and plans:
Australia’s commitment to a 43% reduction in greenhouse gas emissions by 2030, below 2005 levels, falls short of the required 57% to meet the 1.5-degree target. The shortfall resulting primarily from a heavy reliance on carbon offsets, continual support of gas and coal projects, and regulatory reforms intended to maintain coal fleets rather than incentivising renewables.
The USA has committed to net zero 2050 and have legislated to reduce emissions by up to half by 2030, in comparison to 2005 levels. Current pace suggests only a 26%-42% reduction is likely.
The UK has attempted to be relatively proactive in their policy and actions, setting emissions targets of 68% by 2030 and 78% by 2035 with relation to 1990 levels, and committing to net zero by 2050. Projections suggest only a 54-65% reduction in emissions is expected, and a joint action by Friends of the Earth, Client Earth and the Good Law Project decided that the UK’s climate change strategy failed to introduce policies which would actually deliver promised emissions cuts.
Japan has pledged to reduce emissions by 46% below 2013 levels, improving on their former 26% target. There has been reaffirmation of developing a strategy to achieve net-zero 2050. However, political shifts may keep coal going for longer with prolonged investment and may also push a nuclear power agenda.
Canada has pledged to reduce emissions by 40% of 2005 levels by 2030 and reach net-zero by 2050. Canada also introduced an Emissions Reduction Plan for 2030, however continues to explore markets for its large oil and gas resources sector.
The EU has reduction goals of 55% below 1990 levels by 2030, but has not yet submitted these as an NDC. The recent REPowerEU plan includes a renewable share of 40-45% by 2030, and a reduction in final energy consumption to 750 Mtoe from 787 Mtoe. The introduction of the European Climate Law has formalised the European Green Deal which looks to achieve climate-neutrality by 2050. The European Council has also recently voted on effectively banning the sale of new fossil fuel cars from 2035, a huge boost for EVs.
India continues to expand their coal capacity, however, have committed to increasing renewable share of generation from its current 157GW to 500GW by 2030. Since COP26, India has legislated net zero by 2070, and reducing emissions intensity by 45% on 2005 levels by 2030.
The Intergovernmental Panel on Climate Change, in recent reports focussed on mitigation and adaptation (e.g. Climate Change 2022: Impacts, Adaptation and Vulnerability) have stated that it will be impossible to constrain global temperature increases from rising above 1.5 degrees pre-industrial levels. Given this, there is a need for more stringent action, without which will lead to some of the most extreme climate impacts across heat, flooding and scarcity.
Expectations for COP27
In the lead up to COP27, the state of international diplomacy and cooperation is dysfunctional and fractional, with the war in Ukraine creating acute humanitarian, energy and food crises felt across the entire globe. Some geopolitical relationships are teetering on a knifes edge, and supply chains continue to be disrupted, however the urgency of climate action appears not to have been lost amongst both the G20 countries and those with lower emissions profiles.
COP27 has outlined a number of key objectives in which it is trying to achieve; keep the global temperature to well below 2 degrees (ideally 1.5 degrees), strengthen the ability to adapt and build resilience, and mobilize finance for mitigation and adaptation. To do such, COP27 is expected to have a primary focus on a number of themes:
1. Converting pledges to actions
COP27 provides the opportunity for the G20 countries, who are responsible for >80% of all emissions, to announce further policy changes and stringent accountability standards to ensure their pledges are doing enough to reach agreed Paris Agreement targets. Whilst it is understandable that the conversion of pledges and policy into actions and real projects has been slower driven by high energy, goods and commodity prices, cost-of-living pressure and supply chains squeezes, Governments will now need to follow through on their promises which originated at COP26.
2. Higher priority on the protection of oceans
June 2022 saw the running of the Ocean and Climate Change Dialogue at the Bonn Climate Change Conference, which was a commitment formulated at COP26. The Report sets out 10 priorities for countries to focus on for COP27 and stresses the need for governments to promote long-term policies for reductions in emission. Clear recognition of these outcomes will likely be able to inform funding, priorities, and policies for climate action with regards to the ocean into the future.
3. Increasing support for vulnerable countries
Flows of promised climate action finance from larger economies to developing nations will need to be prioritised, the Paris Rulebook properly implemented, and the private sector mobilised to contribute in a more refined manner. There will be increased focus on setting clear finance targets, delivery plans, and a roadmap which increase the transparency, accessibility, and provision of grant-based finance with the World Resources Institute estimating a total of $600bn in climate finance is required to 2025.
In our next COP27 article, we will look in depth at the development of recent Nationally Determined Contributions (NDCs).
For more information, please contact Arvind Sharma at asharma@rennieadvisory.com.au