COP26 retrospective: Historic turning point towards a sustainable future? | (ACOEL) | American College of Environmental Lawyers
When the story of the global transition to a clean energy economy and a sustainable future is written decades from now, the COP26 Climate Change Conference may well be seen as a watershed moment. While government-to-government negotiations produced only modest results, what was truly remarkable about the Glasgow gathering was the range of other forces that aligned behind the need for deep decarbonisation. Most notably, thousands of companies have announced net-zero greenhouse gas (GHG) emissions pledges and hundreds of banks and other financial institutions have pledged to conform their lending to the requirements of a 2050 world. net zero GHG emissions.
The official Glasgow Climate Pact (to which 197 countries have signed up) highlights recent advances in climate science, including the recent 6th Assessment Report of the Intergovernmental Panel on Climate Change, and thus the need for greater ambition in emissions control. The Pact also reset the 2015 Paris Agreement net-zero GHG emissions end-of-the-century target to a much more aggressive net-zero emissions target “by about mid-century,” interpreted by most as 2050.
More impressive and potentially transformative than the Glasgow Climate Pact, which inevitably represents the outcome of the lowest common denominator on many issues, has been the series of side agreements that emerged from COP26, including agreements on:
- Methane — with more than 100 countries pledging to reduce this powerful GHG (30 to 80 times more “radiative forcing” than carbon dioxide) by 30% by 2030;
- Forests – with 120 countries, including Brazil, agreeing to stop deforestation by 2030;
- Coal – with 40 national governments (not counting China, India or the United States) announcing that they will end the burning of coal by 2030 for developed countries or 2040 for developing countries;
- Cars – with 24 countries (and a number of major automakers including Ford and GM) pledging to stop selling petrol and diesel vehicles by 2040;
- Breakthrough Agenda — and commitments to drive innovation in a variety of hard-to-decarbonize sectors, including steel, cement, aviation and agriculture;
- Just Transition for South Africa – with the UK, US, France, Germany and the EU pledging $8.5 billion to help South Africa transition from its current dependency fossil fuels for electricity generation to a clean and renewable electricity system.
Perhaps the biggest announcement from COP26 will be the launch of the Glasgow Financial Alliance for Net-Zero (GFANZ). Led by former Bank of England Governor Mark Carney, 435 banks and financial institutions, representing $130 trillion in assets, joined GFANZ and pledged to align their future lending with the transition to a clean energy needed to achieve the 2050 net zero GHG goal.
While some longtime climate change watchers have raised doubts about whether big bankers will really rethink their lending strategies, I believe the growing interest in sustainable investing provides significant leverage that could shift the business world of speak (just more “blah, blah, blah” as Swedish climate activist Greta Thunberg complained) action — monitored by more robust environmental, social and governance (ESG) performance indicators. Indeed, the interest of an ever-growing number of traditional investors to align their portfolios with their values – including their desire in many cases to act on climate change – could be transformative.
More broadly, a new consensus benchmark for corporate behavior seemed to emerge in Glasgow, with business leaders acknowledging that private gains at public expense are no longer considered ethical. Thus, business models that depend on the “externalization” of environmental costs – whether in the form of air pollution from a smokestack, effluent from a pipe in a nearby river, GHGs into the atmosphere or the benefit of below market cost access to natural resources (such as water, timber or minerals) – will increasingly be deemed unacceptable.
It may well be that the “Glasgow spirit” – marked by a commitment to the transformative change needed to tackle the climate challenge with a seriousness never seen before – will wane in the months or years to come. But for now, the world seems to be seizing on the broader “sustainability imperative” and advancing the logic of deep decarbonization more specifically. In this respect, COP26 may well have triggered changes that will resonate for decades.