01) This article series will keep you informed in the lead-up to the COP 26 climate meeting in November. Stay tuned…
COP 26 is the 26th meeting of the United Nations Framework Convention on Climate Change (UNFCCC). Countries have been meeting since 1995 when the first COP was held in Berlin.
COP (or Conference of the Parties) is the top-level decision-making body of the UNFCCC, and it brings together 197 countries who signed-on to the agreement. The over-riding aim is to stabilise GHG emissions, and to protect the earth from the threat of climate change.
So, if we were ever going to get global agreement on climate-action, this is where it will happen!
But of course, getting agreement in any international forum is always painfully difficult, and on a topic like climate change, the political and commercial challenges are compounded.
The 2020 event was cancelled due to covid19, and it has been rescheduled for November this year, in Glascow, Scotland.
Following on from the Paris-Agreement
Major progress was made in 2015, in Paris, at COP 21. This resulted in the Paris Agreement which saw all countries reaching a historic agreement. In basic terms, all agreed to restrict global temperature increases this century to ‘well below’ 2°C above pre-industrial levels and pushing efforts to limit it to 1.5°C.
The IPCC later stressed the importance of this goal being achieved by 2050, and this gave rise to the ‘Net Zero by 2050’ movement, which has received broad support from both countries and corporations (with the Australian government being a notable exception).
Another element of The Paris Agreement was a clause ‘requesting’ nations to submit enhancements or upgrades to their commitments in the form of Nationally Determined Commitments (NDC). A key expectation of these NDCs is for governments to accelerate their carbon-reductions in the decade to 2030. And the deadline for these was 2020, which means COP26 is the first opportunity to review the submissions/commitments that countries made, and to strengthen their ambitions.
What Does It Mean for Investors?
Readers of OnImpact are likely to be well-aware of the major threat that climate-change poses for not only our environment, but also for our economy.
Outcomes from COP 26 have the potential to drive regulatory changes that could very well reshape energy markets and spur an even greater acceleration of the transition to renewable power.
In Australia, this shift is being resisted by those with financial interests in mining fossil fuels, and those controlling coal fired power stations. The ambition to reach net-zero-by-2050 will have very real consequences for these industries, but the cost of transitioning these industries is forecast to be far less costly than the negative impacts of climate change.
It could also codify the commitment made at COP 21, for rich countries to allocate a total of $100 billion per year in funds to help less developed countries most impacted by climate change. This could come in the form of adaptation finance and capacity building support, but it certainly echoes the investment opportunity that has been highlighted by the most progressive impact investors.
Is It Just a Political Talk-Fest?
As the risk of climate change has grown, so too has the nature of the COP talks, and while the main event does involve parochial discussions and diplomatic meetings of world leaders, there is also a parallel meeting of the public, civil society, art groups and environmentalists.
The event location is divided into two areas: the Blue Zone and the Green Zone. The Blue Zone is where official talks are held. This is controlled by the UN, and brings together delegates and observers.
The Green Zone is managed by the UK government, and it’s a more traditional event space that aims to offer the public, academics and special interest groups to convene and discuss the many issues around climate change.
Are there clear aims for COP 26?
The official COP26 website lists four key aims:
- Secure global net zero by mid-century and keep 1.5 degrees within reach
- Adapt to protect communities and natural habitats
- Mobilise finance
- Work together to deliver
But of course we all know how precarious it is to try and forecast (or even hope) for certain outcomes at major international gatherings like this. There’s many stakeholders, and many opposing points of view.
Having said that, we’re not powerless here. The delegates heading to Glasgow are our representatives, and so it’s now, in the lead-up, that we must make clear how we want to be represented.
So please, send through any ideas you have for core outcomes you’d like to see.
And I’ll have another update soon, all about COP 26!