COP26: A sign of setback or success?

by Sophie Duley, Account Executive

After two weeks of negotiations and two years of preparations, the final outcome of COP26 was determined by two powerful countries pushing for last-minute changes on two key words. By demanding that the pledge to “phase out coal” be replaced with one to “phase down”, India and China blindsided negotiators and undermined the collective process, not least in that it now makes the goal of “keeping 1.5 alive” far less achievable.

This intervention came in the final hour of the negotiations, a move which led many countries to express their dissatisfaction with the underhand approach adopted by India and China. It pushed COP President Alok Sharma – who has seen himself from the start as a champion of the most vulnerable nations – to apologise to those smaller countries who will be impacted most severely by climate change. In a press conference on Sunday evening, Prime Minister Boris Johnson “fully and humbly” accepted that the conference had not delivered the “full solution” to climate change but acknowledged that this is “the nature of diplomacy”, alluding to the consensus approach that guides the UNFCCC process.

However, ever the optimist, Johnson stated that the world is “undeniably heading in the right direction” and, to an extent, this is not entirely Government spin. Although the language was diminished, it marks a historic moment, as it is the first climate agreement to explicitly reference fossil fuel as a key driver of climate change. The conference also finalised key parts of the Paris rulebook, such as agreeing to establish an international carbon market and setting up processes to discuss increasing financial assistance for developing countries in the coming years, which has long been a key sticking point for negotiators.

Furthermore, the ratchet mechanism has been revised, with countries agreeing to return annually with amendments to their Nationally Determined Contributions (NDCs), or national plans to reduce emissions. This was formerly every five years, as agreed under the Paris Agreement, meaning that pressure can now be more frequently applied to the big emitters. While it will be difficult to rewrite the commitment that has now been adopted, the US Climate Envoy John Kerry commented after the conclusion of the final plenary, “I’ll take phase it down and take the fight into next year”, signalling an intent to continue these difficult conversations for years to come.

So, what comes next? The UK’s presidency of the COP doesn’t end here. Alok Sharma’s term as President officially began on 31st October and will continue until COP27 begins in Egypt in November 2022 (7th to 18th) as he works in tandem with his Egyptian counterpart. Given that the conference will be held in Africa, under the UN’s system of regional rotation, the overall focus will move to adaptation and mitigation, with Egyptian President Abdel Fattah Al-Sisi making it known that he wants special consideration for the impact of climate change on the continent.

Finance will also continue to underpin all discussions on climate change and, with the issue being so integral to the ongoing success of future COPs, it is likely that the UK Government’s focus will turn to business for financial support in the domestic transition. The UK is already providing £11.6 billion in climate finance for developing nations over the five years to March 2026 and, according to Chris Stark, Chief Executive of the Committee on Climate Change, the UK may have to pledge billions more pounds to help other countries to cut emissions under the Glasgow deal. If the Government is focused internationally, it may expect an increase in domestic support from business to help push forward the UK’s net zero transition.

And it is businesses that have demonstrated they are more fleet of foot than governments in the transition to net zero. The unprecedented involvement of the business community at COP26 has now set the standard for future summits, with many businesses already considering their involvement in COP27. Furthermore, it cannot be denied that the disappointment at the final hurdle will double the pressure for business and governments alike to keep working beyond Glasgow. The UK Government has made it clear that it has high expectations for the climate-related disclosures of financial institutions and listed companies and will continue to push for UK businesses to lead the way in terms of global standard-setting in the years to come. For example, the Treasury-led Transition Plan Taskforce will be reporting on plans to make it mandatory for businesses to publish clear deliverable plans to meet net zero by the end of 2022.

As President of COP26, the UK Government has always made it clear that this COP has been about implementing the decisions of Paris and not being Paris. While it may not have succeeded in every area, the challenge the UK’s presidency faced was significant and, while it wasn’t a resounding success, it certainly wasn’t a failure.

You can find the final outcome documents from COP26, including the Glasgow Climate Pact, here.

Sophie Duley

Account Executive