Commentary

COP26: Assessing the State of the Parties

Nick Parsons, Head of ESG and Research at ThomasLloyd Group, reviews governments’ records on limiting CO2 emissions since COP21 in 2015 and the prospects for progress at COP26 this November.

The Paris Agreement marked a key stage in international co-operation to slow the pace of climate change, but the simple fact remains that CO2 emissions have continued to grow and by 2019 totalled 36,441 billion tons. According to recently published research, global CO2 emissions

fell around 7% in 2020, whilst the International Energy Association puts the drop in energy-related CO2 emissions at -5.8%. The decrease in emissions appears more pronounced in the US, EU27, and India, partly due to pre-existing trends, but much less evident in China where restriction measures associated with COVID-19 occurred early in the year and lockdown measures were more time-limited.

Whatever the popular perception, the fact is that CO2 emissions in Europe and the US have been on a gradual downward trend for over a decade, whilst in China and the Rest of the World – led by India – they have continued to increase. This should come as no surprise – the Asian economies are growing rapidly and with big increases in population. Their economies are in the transformative stage of economic development which made Europe so powerful in the 20th century. Think of Germany’s Rhine and Ruhr regions or the infamous London fog of the 1950ss. The economic strength we enjoy today was founded on production and pollution over many decades and a large fraction of CO2 remains in the atmosphere for hundreds of years once emitted.

An arguably fairer method of measuring emissions over time rather that a static snapshot of emissions at a given point, is to look at cumulative data over a very long horizon – in this case back to the Industrial Revolution of the mid-18th century. Data from the Global Carbon Project shows the US has emitted most to date: more than a quarter of all historical CO2: twice that of China which is the second largest contributor. In contrast, most countries across Africa have been responsible for less than 0.01% of all emissions over the last 266 years.

What becomes clear looking at emissions across the world today is that the countries with the highest emissions over history are not always the biggest emitters today. The UK, for example, was responsible for only 1% of global emissions in 2017. Reductions here will have a relatively small impact on emissions at the global level – or at least fall far short of the scale of change that is needed to have any significant climate impact.

This one example of the problems of which starting point to choose, upon whom the burden of adjustment should fall, and whether historic or current emissions are the most appropriate metric illustrates clearly the difficulty of deciding what is certain to be a very costly future transition. It would be tough to get half a dozen people to agree, let alone for a consensus to emerge amongst 197 nations. International agreement remains a major challenge.

Countries are accelerating pledges to reduce CO2 emissions

Having established the principle of self-determined emissions targets at the Paris COP21 meeting, there appears to be little appetite for a return to the previous ‘top down approach’. Instead, countries are likely to spend the pre-COP26 period jostling for position to burnish their own environmental credentials. As host of November’s Glasgow meeting, for example, the UK has recently ratcheted up its commitments to cut CO2 emissions. The UK has already reduced its emissions by 45% since 1990 and last year announced a target of a 68% cut by 2030, compared to a 1990 baseline. In April 2021, it promised an acceleration to a 78% reduction by 2035 and was the first large industrialised country to set a legally binding target to cut its greenhouse gas emissions to net zero by 2050.

Only six major countries have legislation committing them to net zero emissions – Sweden by 2045, the UK, France, Denmark, New Zealand and Hungary by 2050. Other countries such as Japan and South Korea have made pledges to reach the target by 2050, whilst China’s publicly stated ambition is currently to become carbon neutral by 2060 and to peak its emissions before 2030. At a virtual summit that was held to coincide with Earth Day on 22 April, President Biden committed the US to cut carbon emissions by 50-52% below 2005 levels by the year 2030, saying there was a moral and economic imperative to immediately act on climate change.

Comparing progress thus far achieved

To make international comparisons on climate change progress, the Climate Change Performance

Index (CCPI) published annually by Germanwatch, NewClimate Institute and the Climate Action Network, measures the climate mitigation efforts of 57 countries plus the EU which together account for 90% of global greenhouse gas emissions. It aggregates performance based on a broad range of metrics and ranks countries by outcomes. Using standardised criteria, the CCPI looks at four categories, with 14 indicators: greenhouse gas emissions (40% of the overall score), renewable energy (20%), energy use (20%), and climate policy (20%). With scores ranked out of 100, even the best performing country, Sweden, does not qualify for CCPI’s ‘very high rating’, although thirteen qualify as ‘high’ and a further fourteen count as ‘medium’. Clearly, there is much progress still to be made.

Hopeful signs of a thaw in international relations

The major diplomatic challenge for the COP26 meeting will be for the UK as hosts to persuade the newly-elected US Administration and President Xi of China that climate change can be addressed in a spirit of global co-operation, notwithstanding their significant differences on economic and foreign policy. President Biden rejoined the Paris climate accord after entering the White House earlier this year, whilst Chinese climate envoy Xie Zhenhua and his US counterpart John Kerry met in Shanghai in mid-April.

The joint statement issued after their meeting noted, “The United States and China are committed to cooperating with each other and with other countries to tackle the climate crisis, which must be addressed with the seriousness and urgency that it demands. This includes both enhancing their respective actions and cooperating in multilateral processes, including the United Nations Framework Convention on Climate Change and the Paris Agreement. Both countries recall their historic contribution to the development, adoption, signature, and entry into force of the Paris Agreement through their leadership and collaboration”.

The notably upbeat statement concluded that, “The two sides will cooperate to promote a successful COP 26 in Glasgow, aiming to complete the implementation arrangements for the Paris Agreement (e.g., under Article 6 and Article 13) and to significantly advance global climate ambition on mitigation, adaptation, and support.”

Ambitious targets and high expectations for the COP26 meeting

Many political and business leaders, activists and scientists have high hopes for this year’s conference.

COP26 is being viewed as the successor to COP21 where the Paris Accord was signed, arguably the greatest success from the UNFCCC in recent years. It is seen as the summit to both address what has and hasn’t been achieved since 2015, while also setting concrete plans to reach the Paris Agreement targets.

COVID-19 has refocused priorities and triggered individuals and governments alike to pay closer attention to the natural environment. As many countries look to rebuild their economies in the wake of the pandemic, there has been a major emphasis on ‘building back better’ through a green recovery.

In April 2021, UK Prime Minister Boris Johnson set out Britain’s main ambitions for the COP26 meeting, to be held in Glasgow from November 1 to 12. He makes a call to action to the world: “We want all nations to commit to reaching net-zero carbon emissions by the middle of the century, with as many as possible pledging to meet the target by 2050, and to make ambitious commitments to reduce emissions by 2030 to get us there, as the UK has done.”

As Alok Sharma, the former UK government business secretary, who is now President of COP26, has written, “This is a global effort – the climate doesn’t care whether emissions come from Britain, Bahrain or Brazil. So, when the countries of the world meet in Glasgow for COP26, we’ve got to get a grip and, together, sort this crisis out once and for all.”

The full research paper, ‘COP26 Meeting on Climate Change: The State of the Parties’, can be accessed here.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2021 ESG Investor Ltd. Company No. 12893343

To Top
Newsletter SignupReceive all the latest stories from the ESG Investor editorial team

Subscribe to our free weekly newsletter below and never miss a story.

Share via
Copy link
Powered by Social Snap