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November’s COP26 talks were hailed as a monumental opportunity to show ‘ambition’ in the fight against the climate emergency. Global Insight assesses what was achieved – and identifies where the world still needs to go further to mitigate climate disaster.

Coal, cars, cash and trees – these were UK Prime Minister Boris Johnson’s top priorities for the UN climate talks, known as COP26, which were held in Glasgow at the start of November. The Leaders’ Summit at the beginning of the two-week meeting saw a flurry of high-level pledges and commitments made on these issues, including to halt deforestation by 2030, phase out coal, cut methane emissions by 30 per cent by 2030 and provide support for a just transition.

Away from the headlines, however, larger concerns were in focus.

David Boyd, UN Special Rapporteur on human rights and the environment, says that COP26 needed to deliver increased ambition on all fronts – emission cuts, adaptation efforts, loss and damage and climate finance. ‘We are living in a climate emergency – there is no scientific question about that, and it’s absolutely imperative that states and businesses step up and raise their ambition in every aspect of climate action’, he says.

‘The world is looking to governments […] to tell them that they’ve got this, in terms of ambition, that, in aggregate, what governments are putting on the table will keep the possibility of limiting warming to 1.5°C alive’, says Kay Harrison, Climate Change Ambassador for the New Zealand Ministry of Foreign Affairs and Trade.

Harrison says ‘we know what the science is telling us’, highlighting the latest Intergovernmental Panel on Climate Change assessment report, published in August. ‘We’ve known for some years now that we need to halve our emissions globally by 2030 and we need to be on track to net zero mid-century’, she adds.

‘Each of us has a responsibility in that regard, whether we’re big or small, and each country needs to look at its own pathway to net zero and then ask how much can it do before 2030, because that is the critical period’, she says.

Big ambitions

Delayed by a year due to the Covid-19 pandemic, COP26 was the first of the five-yearly cycles for governments to table new pledges, known as Nationally Determined Contributions (NDCs), under the Paris Agreement. Expectations were high, particularly given the calls to ‘build back better’ from the pandemic. For Kelley Kizzier, Global Climate Vice-President at the US-based nonprofit Environmental Defense Fund, this led to a worry about outcomes.

‘We’ve heard a lot about this being the “ambition COP”, but this is a bit awkward because ambition isn’t actually on the formal agenda’, she explains. ‘We have to think about success in Glasgow in two ways. The first is to focus on the negotiations themselves’, specifically the series of decisions taken on issues such as finance, updated NDCs and carbon markets. ‘What we really need to focus on is what happens in parallel to the COP’, such as other multilateral fora like the G7 and G20 meetings.

She describes these ‘coalitions of the willing’, which include governments but also civil society and the private sector, as critically important. ‘The COP is where these things come together’, says Kizzier. ‘It keeps the spotlight on climate and provides a sense of urgency, and this is one of the main things that drives ambition.’

What determines whether COP26 has been successful is the impact of all the formal outcomes as well as the peripheral deals and frameworks, she adds. ‘We just need to see if we’ve got the world in a better place to be on a path to 1.5°C, or net zero, which seems to resonate with a lot of people, by mid-century.’

The eleventh-hour change

During the two-week COP, this is exactly what some tried to do. Towards the end of the first week, Fatih Birol, Executive Director of the International Energy Agency, said of the talks that if the increased NDCs plus the pledge to curb methane emissions are fully met, their combined impact could stabilise the average increase in global temperatures to 1.8°C this century. ‘This is a landmark moment: it is the first time that governments have come forward with targets of sufficient ambition to hold global warming to below 2°C’, he said.

‘This commitment on coal had been a bright spot in this package’, Tina Stege, Climate Envoy for the Marshall Islands, told the plenary. ‘It was one of the things we were hoping to carry out of here and back home with pride. And it hurts deeply to see that bright spot dimmed.’

‘We accept this change with the greatest reluctance’, she added. ‘We do so only – and I want to stress, only – because there are critical elements of this package that people in my country need as a lifeline for their future.’

‘We all know that European wealth was built on coal. And if we don’t get rid of coal, European death will also be built on coal’, said Frans Timmermans, Vice-President of the European Commission. He added that the EU had wanted to go further on coal than the text had originally said, and pointed to an agreement the bloc and partners announced with South Africa during the COP26 to help the coal-dependent nation transition away from the fuel. Timmermans said this agreement will push ahead irrespective of the softer language in the COP decision.

Meanwhile, Shauna Aminath, Minister of Environment, Climate Change & Technology for the Maldives, tweeted that ‘Either we kill coal or coal will kill us. A phase down of coal won’t save the Maldives and island nations’.

Despite the outcry over the eleventh-hour change to the language, others still noted the significance of a UN climate agreement finally mentioning the need to move away from fossil fuels.

‘The mention of fossil fuels in the Glasgow agreement is the outcome of decades of organising and campaigning – despite the efforts of fossil fuel lobbies’, says Cansin Leylim, Associate Director of Global Campaigns at 350.org, a global grassroots movement which aims to solve the climate crisis.

Beyond coal

The Glasgow Climate Pact also notes that the tabled NDCs do not go far enough to meeting the goals of the Paris Agreement and urges governments to revisit their 2030 targets before the end of 2022. The Pact also calls for developed countries to double their adaptation finance provisions – based on 2019 levels – by the end of 2025.

‘The fight goes on […] but we’re making progress’, says Barry Barton, Member of the Editorial Board of the IBA Journal of Energy and Natural Resources Law and a professor at the University of Waikato in New Zealand. The intent to increase NDCs ‘is good, and important’, he adds.

‘It’s absolutely shameful that not a single penny, not a single Euro has changed hands to support the efforts of small island developing states and least developed countries to deal with today’s devastating impacts of climate change’, says David Boyd. ‘There’s a number of countries in the Caribbean, for example, which have been hit by two Category-5 hurricanes in the last five or six years, each of which has damaged over 90 per cent of the buildings in those countries – how are they expected to build back on their own without financial assistance from the wealthy countries that are responsible for this problem?’

For Ani Dasgupta, President and Chief Executive Officer of think-tank the World Resources Institute, COP26 finally placed the critical issue of loss and damage squarely on the main stage. ‘To meet the needs of vulnerable countries, it is essential that the dialogues established in Glasgow be more than talk and result in recommendations on the scale of funding necessary’, he says.

‘Some of the commentary doesn’t show enough understanding of how important the finance, the loss and damage, and general support for developing countries is’, says Barton. Climate change is both an environmental and equity issue, he says, and developed countries need to bear in mind the importance of addressing the inequity between countries. ‘Funding of that kind is one of the easiest things you can do’, he adds.

Elsewhere, the COP also completed the rulebook for the Paris Agreement, with the outstanding items – cooperative mechanisms under Article 6, seen as the home of carbon markets in the 2015 pact and a transparency framework for reporting on progress – finally nailed down.

Reaching agreement on Article 6 should mean ‘a lot of activity around mobilising investments that can support climate smart infrastructure and really good investments both in the developed and developing world’, says Rick Saines, a partner at specialist climate change advisory and investment company Pollination.

‘It’s still going to take some time to work out the operational details of how it’s all going to work, but getting an as-concrete-as-possible agreement on the Article 6 mechanism will generate capital shift and accelerate capital flows in the right direction’, says Saines.

Financing the transition

Climate finance, or a lack thereof, was another contentious topic at COP26, with developed countries facing the ire of developing nations for falling short on a promise to mobilise $100bn per year of funding by 2020. Current estimates are that this goal will be reached in 2023.

‘This problem isn’t going to be solved by $100bn per annum’, says Harrison. ‘This problem has to be addressed by trillions of dollars mobilised in the right direction.’

She explains that currently, countries spend billions of dollars supporting the use of fossil fuels, and for some time New Zealand has championed supporting countries to transform their fossil fuel subsidy regimes. This is because ‘although they may have good intentions in subsidising fossil fuels for vulnerable communities in their countries, in fact they are not the ones who benefit from fossil fuel subsidies, and fossil fuel subsidies take us in the opposite direction of the mobilising of trillions of dollars in investment and transition to the low-emissions future’, says Harrison.

Instead, she says, public money should be used as grants or to leverage private money, particularly to support adaptation, heeding the calls of Pacific Island nations. These investments could support measures such as early warning systems for storms, water security and, for some, relocation away from coastlines.

‘The inequality that’s at the heart of the Covid pandemic […] is much the same inequality that’s at the heart of the global human rights crisis precipitated by climate change’, says Boyd. The pandemic has shown that ‘if we want to tackle a problem, there are trillions of dollars at our disposal to do so’.

Acknowledging that the $100bn per year isn’t enough to begin with, Sara Carnegie, Director of the IBA’s Legal Policy & Research Unit, says ‘the bigger question is […] will states commit a more realistic level of financial support to do this properly in the time available?’

Carnegie welcomes a shift in government and corporate mindsets, noting the growing focus on environmental, social and governance among business. ‘We are seeing a very real shift from shareholder capitalism to a more stakeholder-focussed approach, which is positive providing companies truly embed a human rights due diligence approach into their strategic decision making’, she says.

For lawyers, this transition in corporate thinking needs to translate to a change in business. A starting point is incorporating climate ambitions into day-to-day activities, says Carnegie, including via changes to contract clauses, how to report on progress towards stated environmental goals and transparency on the process.

Turning promises into reality

Going forward, attention will be on whether governments are making good on their promises and are acting swiftly – both before the 2022 COP in Egypt and in implementing the pledges made on emissions cuts and finance in the longer term.

‘The big challenge is to take these commitments states make and turn them into reality’, says Boyd. ‘States will make all kinds of ambitious commitments […] and the real challenge is not making bigger commitments – the real challenge is in fulfilling the commitments that are made. Whether that’s climate finance, whether that’s pledges to reduce greenhouse gas emissions – those actions have to be taken, they can’t just be talked about.’

Carnegie warns of growing litigation over climate action, which is ‘bringing judgments that governments and corporates need to pay attention to’. For the private sector, the challenge is to see if investment can shift enough to bring about the changes needed.

‘There are outcomes that people need to pay attention to’, she says. A recent example is litigation against Shell in the Netherlands, with a court in May ordering the oil major to reduce its emissions to 45 per cent below 2019 levels by 2030, a decision that Shell has announced its intention to appeal. Meanwhile, in November, Australia’s Federal Court ordered the Commonwealth Bank of Australia to hand over documents pertaining to loans to seven oil and gas projects to a shareholder to ensure the loans were in compliance with the bank’s stated net-zero goals.

Irrespective of events at COP26, ‘what comes next […] is the continued imperative for corporates and institutional investors and the whole financial ecosystem to do their part in being part of the solution to humanity’s greatest challenge’, says Saines.

And they’re doing it for lots of different reasons, he adds. ‘It’s not just PR anymore, it’s social licence to operate, it’s seeing the economic opportunities that the needed solutions to climate present for so many forward leaning companies and institutions.’

Katie Kouchakji is a freelance journalist covering climate change policy and carbon markets, and can be contacted on katie@kkecomms.com