COP26: The Glasgow Climate Pact

The Glasgow Climate Pact. COP26 closed late on Saturday with the adoption of the ‘Glasgow Climate Pact’ by the 197 parties (196 countries and the EU) to the UN Framework Convention on Climate Change (UNFCCC). The full text of the main Pact is here. 

• Main elements. Carbon Brief have written a comprehensive analysis of the Glasgow Pact and other COP26 decisions and announcements. New Economy Brief Managing Editor Michael Jacobs summarised the main elements of the Pact in a Twitter thread. 
• Reaction. UN Secretary-General Antonio Guterres issued a sober welcome for the agreement. “Our fragile planet is hanging by a thread. We are still knocking on the door of climate catastrophe. It is time to go into emergency mode — or our chance of reaching net zero will itself be zero.” Edie collated reactions from civil society organisations including Greenpeace, WWF, the Corporate Leaders Group and C40. ECIU’s Sepi Golzari-Munro tweeted a short evaluation of the deal and European Climate Foundation head Laurence Tubiana set out priorities for COP27, which will take place in Egypt in November 2022.

Mitigation and returning in 2022. On emissions reduction (‘mitigation’), the agreement acknowledges that current national commitments are insufficient to put the world on a pathway to limiting global heating to 1.5C above pre-industrial levels. It instructs countries to come back in 2022 with strengthened commitments for 2030, in line with the “well below 2C” and ideally 1.5C goals set out in the 2015 Paris Climate Agreement. The planet is already 1.2C warmer: NASA’s Earth Observatory explains what rising average global temperature means. 

• Commitments and projected temperature rises. Almost all major countries had already announced their commitments ('nationally determined contributions' or NDCs) before COP26, so they were not going to revise them at the conference. In that sense requiring countries to come back with stronger commitments next year is the most COP26 could realistically have done. Climate Action Tracker’s analysis shows that the 2030 commitments will lead to around 2.4C of warming. If longer-range ‘net zero’ targets were met, warming could be limited to 1.8C, but these pledges are not backed by credible policy. Climate Resource’s NDC factsheets tell you more than you need to know about all 192 NDCs so far submitted, and the temperature increases to which they might lead. (Twitter thread explainer here)
• What happens next? There is no guarantee that countries will come back in 2022 with sufficiently strong commitments to meet the 1.5C limit. In practice this will depend on domestic political pressures in every major emitting country - both for and against greater ambition. BusinessGreen’s James Murray argues that the agreement “creates a moment every year when governments will face intense public and geopolitical pressure to strengthen their decarbonisation plans”. In the UK, NEON’s recent polling shows that the UK public supports strong domestic climate action.  
• Do international agreements make any difference? Climate writer David Voltz explains what a global climate treaty can and can’t do: “COP agreements can't make anyone do anything or punish anyone for failure...The action is in domestic national politics.” In an analysis of the Glasgow outcome, Michael Jacobs explains how climate agreements since Copenhagen in 2009 have forced countries to act simultaneously, contributing to the creation of global markets in green technologies which have resulted in much lower costs, enabling stronger action.
• Sectoral agreements. COP26 saw a number of sectoral agreements signed between groups of countries and the private sector, notably on deforestation, methane, transport, coal, green technology and finance. Carbon Brief explains. If fully implemented, Climate Action Tracker estimates that they could close the emissions gap to a 1.5C path by 9%. (See last week’s digest for more analysis of these.)

Fossil fuels. The Glasgow Climate Pact calls for “accelerating efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies.” No dates for this are given, but Greenpeace and others hailed the first ever mention of reducing fossil fuels in a COP document as a signal that “the era of coal is ending.” International lawyer Harro van Asselt explains why the text is significant even if it is weaker than hoped. 

• Coal. Coal-fired power stations remain the bedrock of electricity production in many countries, particularly those with their own coal reserves. In many countries new power generation comes mostly or exclusively from renewables (wind and solar), and old coal-fired power is being phased out. But as the Centre for Research on Energy and Clean Air explains, the expansion of largely new (and more efficient) coal in China offsets declines elsewhere. The reference to “unabated” coal in the text means that coal plants fitted with carbon capture and storage (CCS) technology are exempt from the phase down. CCS can reduce emissions by around 80%, but is costly and still rarely used.  
• Fossil fuel subsidies. The reference to “inefficient” fossil fuel subsidies mirrors the language adopted in recent G20 communiques, which has provided a get-out clause for almost all countries. Some countries (such as India) defend consumer subsidies, since they make energy cheaper for the poor (though also for the rich). The IMF calculates that, globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of global GDP. Around 8% of this reflects explicit subsidies (undercharging for supply costs); 92% reflects estimates for the undercharging of environmental costs, tax breaks and foregone consumption taxes like VAT (implicit subsidies). The Guardian explains. The Overseas Development Institute has a complete run-down of fossil fuel subsidies in G20 countries and progress towards phasing out. 
• Just transition. The Glasgow Pact recognises “the need for support towards a just transition”. The concept of a just transition - invented by the trade union movement - expresses the importance of supporting workers and communities adversely affected by green policies (such as those in fossil fuel and high carbon sectors). The International Trade Union Confederation’s Just Transition Centre provides a wealth of resources on the idea. Read IPPR’s plan for a managed transition for oil and gas in Scotland and the UK. 
• Oil and gas. The Glasgow Pact makes no mention of oil and gas, defended in the negotiations by the major producers including the US, Saudi Arabia and Russia. Nevertheless, taking the sectoral agreements into account as well, Oil Change International welcomed the historical significance of progress on phasing out fossil fuels. Global Justice Now’s response criticised the failure to look at how the global trade system reinforces the fossil fuel economy in arrangements such as the Energy Charter Treaty. The Treaty allows fossil fuel companies to be compensated for low-carbon policies introduced by governments: the IEA estimates it could cost the global economy as much as $100tn for lost revenue and stranded assets. (Watch Common Wealth’s explainer on how Investor-State Dispute Mechanisms enable fossil fuel companies to sue governments for climate action.)
• India and ‘watering down’. Much attention has focused on India’s role in watering down the final text from “phasing out” coal to “phasing down”. In fact it was India and China who both sought the change. ActionAid’s Brandon Wu argues that it is unfair to blame India: the problem is lack of global equity in phasing out fossil fuels in general. Wu references the Civil Society Review on a globally just fossil fuel phaseout which shows what fair shares of climate action would be, and how and why countries should phase out fossil fuels on different timelines. 
• Global fair shares. Global Justice Now’s Dorothy Guerrero explains why the choice to ‘phase down’ coal rather than oil and gas allows richer countries to escape their historical obligations. For Common Wealth, Harpreet Kaur Paul has analysed the responsibilities role of the global North due to its historic and present role in the climate crisis. Referencing Oxfam’s briefing note on per capita consumption emissions, economic anthropologist Jason Hickel explains that the emissions of the richest 10% of the global population will use up the remaining carbon budget for 1.5C, “totally irrespective of what the rest of the world does”.

Climate finance. ‘Climate finance’ refers to money provided in different forms from advanced economies to countries in the global South. (The FT explains here.) Developed countries pledged in Copenhagen in 2009 and again in the Paris Agreement that they would mobilise public and private funding of $100bn a year by 2020. They failed to hit this target (providing $80bn in 2019) but say they expect to hit it in 2023. As the Jubilee Debt Campaign noted, over 70% of this finance has been in the form of loans, not grants, which add to the debt burdens of lower income countries. 

• Total finance flows. In Glasgow developed countries resisted the demand that they make up the shortfall since 2020 by providing more in 2024 and 2025. The text sticks at $100bn a year, and sets up a new process to define how much they should pay after 2025. ‍
• Finance for adaptation. For many years poorer countries have expressed anger that around 75% of climate finance has gone to mitigation efforts, such as renewable energy, rather than on adaptation to help them cope with the climate change they are already experiencing. The recent UN Environment Programme report on financing for adaptation estimates that the costs for vulnerable countries to adapt to global warming are up to ten times higher than available funding. In the Glasgow Pact the vulnerable countries achieved their demand that developed countries should “at least double” funds for adaptation. ‍
• The overall finance package. The Glasgow Pact calls on the World Bank and other multilateral development banks to improve access to climate finance for climate-vulnerable countries, which can be penalised by their (in some cases) higher GDP per capita and perceived high-risk investment conditions. Senior COP26 adviser Amal-Lee Amin argues that COP26 has made progress. Citing the new financing and reform agreement between South Africa and several developed economies to help South Africa transition away from coal, COP26 “provides a solid foundation for a comprehensive new climate finance framework post-2025”.
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Loss and damage. In UN climate negotiations 'loss and damage' is the term used to describe the principle that rich countries should compensate poor ones for the climate costs their historical emissions have caused. For many countries in the global South this is central to climate justice. Developed countries have always resisted it; they fear it is the slippery slope to being held liable in international courts for trillions of dollars in damages. In Glasgow the vulnerable countries wanted a new financing facility to be set up for loss and damage. This was not agreed: there is to be merely a ‘dialogue' to discuss 'arrangements'. Power Shift Africa’s Mohamed Adow expressed the widespread anger at this: “The needs of the world's vulnerable people have been sacrificed on the altar of the rich world's selfishness.” Developing countries vowed to return to this at COP27 next year. 

Carbon markets. 'Carbon markets' in climate change agreements allow rich countries to buy 'offsets' (such as tree planting) to avoid the cost of reducing emissions themselves. Such markets have been controversial since first being allowed under the 1997 Kyoto Protocol. Article 6 of the Paris Climate Agreement defined them further and COP26 was meant to finalise the rules. The Glasgow Pact closes some loopholes over double-counting, and sets somewhat stronger standards for environmental integrity and protection for indigenous peoples. But there is only partial cancellation of credits left over from the old Kyoto Protocol (which many people think should simply be retired), and only a partial cap on new ones. A 5% levy to go to adaptation will cover only some trades. With two different trading systems created it is feared the weaker one will predominate. Clean Energy Wire explains what has been agreed. Carbon Markets Watch criticises it.  

And the rest. Beyond the issues mentioned above, COP26 completed the ‘Paris Rulebook’ of detailed rules to implement the Paris Agreement, such as on the transparency of national actions and measurement. This will allow for full implementation of the treaty. Some other notable developments were on:

• Special Drawing Rights. One of the most interesting developments at COP26 arose from the powerful speech (watch it here) made by the Barbados Prime Minister Mia Mottley in the Leaders’ Summit. She called for the IMF to issue annual tranches of SDRs, the global reserve currency, to finance climate-compatible development in the most vulnerable countries. Some of the SDRs issued this year in the light of the Covid pandemic are already meant to be reallocated for development (but have not yet been). Mottley’s adviser Avinash Persaud explains the new proposal.‍
• Countering greenwash. There was widespread concern in the run-up to COP26, and at it, that various companies are claiming to be committed to achieving net zero emissions but are in fact using dubious measurement and large-scale use of offsetting. (The Guardian’s Damian Carrington explains.) At COP26 the UN Secretary General announced that he was setting up an Expert Group “to propose clear standards to measure and analyse net zero commitments from non-state actors.” This was widely welcomed.