The COP26 summit in Glasgow is our focus today. And we think it’s time to dispel some of the doom and gloom surrounding the results. Yes, it wasn’t perfect. More could have been achieved. But with expectations high after a yearlong delay caused by Covid-19, it was actually fantastic to see so many pledges made. In fact, we’re feeling quite bullish about the overall outcome.
The bottom line is that net zero by mid-century is still just about attainable. And whilst the ambition to restrict global warming to 1.5 degrees was described by Alok Sharma as “barely alive”, at least it isn’t dead quite yet. There’s still hope that what Greta Thunberg called “blah, blah, blah” might be replaced by ‘huzzah’ and ‘aha’ if key targets are met in the coming years.
Let’s dig straight into the specifics starting with trees; those all-important CO2 hoovers. Leaders from more than 100 countries – who control 85% of the world’s forests – pledged to end deforestation by the end of the decade. The same number of countries also agreed to cut damaging methane emissions by 30% before the end of 2030. This isn’t great news for cows but everyone else should be chuffed.
COP26 also brought good news about fossil fuels. An explicit plan to reduce the use of coal, which causes 40% of annual CO2 emissions, was agreed for the first time ever. What’s more, world leaders pledged to slowly dump subsidies that keep the cost of coal, oil, and natural gas artificially low.
This was good news all round, as China in particular has always seemed reluctant to tackle coal emissions. In fact, greater cooperation between the US and China was perhaps the single most promising development from the whole summit. Relations between the world’s leading CO2 emitters have been frosty for a while, so a thawing in their emerging Cold War definitely warmed the cockles.
Finally, an agreement was reached at COP26 to give countries struggling with the effects of climate change, and those finding it hard to switch to renewable energies, financial assistance. A figure of $100 billion per year was mentioned, which is certainly more than a drop in our rising oceans.
Many observers also praised the conference for pushing through an agreement to meet again next year, when everyone hopes that emissions will be cut even more. Getting representatives from over 200 countries to agree a final text was no mean feat.
Not everyone was satisfied with the progress made at COP26, however. Some bemoaned the lack of stronger commitments. Others claimed that warming is still heading in excess of 2 °C let alone 1.5 degrees.
Meanwhile, some scientists argued that the world has already warmed too much anyway, and that the recent record temperatures, wildfires, floods, and droughts indicate that dangerous tipping points may have been reached already. Oh dear.
There was also criticism of the specific agreements. Pessimists pointed out that big emitters like China, Russia and India, for example, did not sign up to the methane pledge. Meanwhile, the $100 billion per year to help poorer countries was characterised as insufficient. Trillions, not billions, were apparently required.
Furthermore, much of the global media fixated on China and India’s insistence that coal should be “phased down” rather than “phased out”. Semantics do matter, of course, but you can’t phase something out unless you phase it down first. Let’s see what happens at COP27 before we decide that the glass is half empty.
Overall, we agree that COP26 was “an important ratcheting up of climate ambition”. It took practical steps to reduce damaging emissions, and it leaves the door open for further international cooperation in the future. Whilst we can understand why some climate activists have questioned what the summit will achieve, we think their cynicism stems from cynicism about politicians in general.
Because the agreements will be self-policed by governments of individual counties, critics simply don’t believe that politicians will keep their word. There’s also a suspicion that world leaders believe emissions can be cut by new technologies alone; therefore they won’t take necessary but unpopular measures to fight climate change.
However, we’re hopeful that momentum is finally shifting. Why? Because politicians ultimately listen to voters. And there has never been more pressure on our elected leaders to act. Climate change is now a massive political issue that can’t be ignored. And this is why sweet optimism seems more appropriate than disenchantment this time.
There’s another big reason why we’re optimistic, too. Big business and banking is finally getting on-board. In fact, one of the best bits of news from COP26 is that financial organisations that control $130 trillion agreed to back "clean" technologies like renewable energy and direct finance away from fossil fuel-burning industries. This group of banks, insurers and pension funds has also committed to the 2050 net-zero goal.
Because “money makes the world go round”, as Liza Minnelli once reminded us, it’s incredibly encouraging to see finance ploughed away from coal, oil and gas. Private companies are also getting involved in green initiatives on an unprecedented scale. Even the Chinese, whose public banks have traditionally been up to their ears in coal, are finally stepping back from fossil fuel investments.
Consequently, don’t despair if you lack faith in politicians. Private business can drive this thing, too. What’s more, we’re already seeing some tangible progress. The EU Emissions Trading System, which decides how much utilities and industry have to pay for emitting one tonne of carbon, set the price at almost €68 immediately after COP26. This is a record high and almost double what it cost at the start of the year.
So don’t automatically believe the naysayers and the unhappy headlines. The fight against global warming is hotting up. And with a bit of luck, we might just reach a tipping point in public opinion and investment before the dreaded environmental ones kick in.