A further slowing in growth
After the fanfare of the opening statements and commitments, the second week at Glasgow meant bridging divides to reach a consensus deal in extra time as the Paris 2015 ambitions start to take flight.
The final days and hours of COP26 were spent reviewing a statement of outcomes countries could sign up to as the world’s different economies prepare for their next steps in the energy transition.
Ahead of the final deal for the summit, UN chief Antonio Guterres, whose assessment in the IPCC report in August was “code red for humanity”, said the 1.5C goal from Paris in 2015 remained on “life support”.
When the Glasgow Climate Pact was finally announced, after amendments from India and China to phase coal “down but not out”, COP26 President Alok Sharma declared the day a “fragile win”, with the hard work set to start immediately.
From reactions so far, it’s clearly work the global business community is ready to embrace, with trillions in climate finance mobilised and the strong motivation to deploy for effective net-zero solutions.
US climate envoy John Kerry made the point in final negotiations: “You can’t let perfect be the enemy of the good. And this is good. It’s a powerful statement.”
Despite the enormity of the task ahead, the commitments made in Glasgow – from methane and coal to forests and finance, plus an 11th hour joint climate pact announced between the US and China – will help to shape the global business agenda towards a net-zero solution, starting now.
And however the politics play out, both domestically and abroad, the agreement signed by the 197 attending countries is to accelerate action on climate change this decade, with more ambitious plans for 2030 to be submitted by the end of next year.
After six years of discussions, the Parties have also finally agreed on the Paris Rulebook for how the 2015 goals are to be delivered, something keenly eyed by global investors to inform their decisions and targets. This includes Article 6, which establishes a framework and transparency for countries to exchange carbon credits.
The two weeks of discussions now see net-zero targets covering about 90% of the world, up from 30% two years ago. In the same period, 154 countries have submitted new national targets, representing 80% of global emissions. Glasgow has also seen a pledge from 130 countries to end deforestation by 2030 to cover 90% of the world’s forests.
The US-China declaration made near the end of the talks aims to boost climate co-operation between the world’s two largest emitters over the crucial next decade.
The announcement from Kerry and China envoy Xie Zhenhua helped to defuse tensions and followed an earlier appearance by former US president Barack Obama, who referenced his trademark “hope” while remaining critical of global sticking points.
The final Glasgow agreement also emphasises the need to increase support for developing countries beyond the current $US100 billion annual target, which remained a contentious point from the opening World Leaders’ Summit.
Despite such high-level tensions, the mood from observers echoed within the Australian pavilion, was of enthusiasm generated by finally being able to meet again in-person to address their common goals. To be there, face-to-face, with like-minds eager to take on this crucial planetary and technological challenge and harness the opportunities for progress the COP meetings present.
Hydrogen was a big topic to resonate with participants, along with building the opportunities of carbon markets through Article 6 and the electrification of transport. There was also great excitement around the earlier $US130 trillion announced to back clean energy and the transition from more than 450 global financial firms through the Glasgow Financial Alliance for Net Zero (GFANZ).
The scale of COP26 – one of the biggest events ever hosted in the UK – while somewhat challenging to navigate on the ground also offered an important global perspective from countries at different stages of climate development and with different resources to apply.
Taking this global view, Australia clearly has the opportunity to be an important player in the task ahead, to help find and enable ways to deploy the huge amounts of capital being mobilised to fundamentally shift the world’s energy system.
On week two’s key transport day, 32 nations plus hundreds of cities, regions and businesses signed on for a commitment towards all new cars and vans being zero emissions globally by 2040 and by 2035 in leading markets.
In aviation, 18 nations, representing 40% of global annual emissions and including the US, UK, Japan, France and Canada, pledged to develop emissions targets aligned with a 1.5C path. The maritime sector saw 22 nations, including UK, US, Japan, Canada, Australia and New Zealand, sign a declaration developing zero-emissions “green shipping corridors” between ports which are intended to act as test beds for emerging technologies.
The second week also saw further action on health, gender, science and innovation, as well as a focus on the built and natural environments, with agreements on research into climate adaptation.
Back home, as the negotiations continued in Glasgow, our federal leaders were road-testing net-zero plans ahead of a potential May poll.
The Prime Minister released his long-awaited policy on electric vehicles with $A250 million to support charging infrastructure and plans to get 1.7 million EVs on the road by 2030 amid Opposition and industry scepticism.
With technology the centrepiece of the Coalition’s approach, the government also announced up to $A1 billion co-investment with the private sector to develop low-emissions technology. The Low Emissions Technology Commercialisation Fund is to be administered by the Clean Energy Finance Corporation (CEFC).
Modelling for the net-zero plan released later in the week, revealed just how crucial this emerging tech will be in achieving the target for 2050, while highlighting the huge economic penalties of climate inaction.
With the international momentum now generated from COP26, both business and government clearly know the transition is here and it is underway. Next comes the task of setting key priorities to translate net-zero pledges into action, as the clock ticks for any updated commitments.
The complexities of the discussions highlight the challenge of transition for a nation like Australia which requires multiple approaches rather than any single silver bullet.
As industry moves to cleaner solutions through technology and market support, the Glasgow pact has set the direction and urgency for us to seize the opportunities that will take us to a more sustainable future together with the global community.
After Glasgow, COP27 is scheduled for November 2022, and is set to be held in the somewhat warmer climes of Egypt’s Red Sea resort of Sharm El-Sheikh.
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