Regulations & Resources
COP26 week two recap
The COP26 climate conference affirmed the need to act “in this critical decade” to prevent the worst effects of climate change. Nearly 200 countries pledged to revisit and strengthen their climate commitments. Their pact recognizes the need for scaling up private investment to reach net-zero.
- COP26 week two recap
- COP26 week one recap
- COP26 national climate commitments tracker
- Keeping warming to 1.5°C will require big countries to quit coal
- What the latest IPCC report means for investors
- About the COP26 climate summit
- What is the role of emissions trading?
- Climate-related regulations for the financial sector
- The significance of nationally determined contributions
- Financial industry climate alliances and initiatives
- Climate reporting by capital-markets participants
- A glossary for getting to net-zero
Key provisions of the COP26 agreement
Here are some of the core provisions of the agreement adopted in Glasgow.
- It reaffirms the Paris Agreement goal of keeping global temperature rise well below 2°C above preindustrial levels and pursuing efforts to limit temperature rise to 1.5 °C.
- It speeds up the timetable for addressing climate change by calling for action “in this critical decade” and for countries “to revisit and strengthen” their 2030 emissions-reduction targets by the end of 2022.
- It affirms science, recognizing “that limiting global warming to 1.5 °C requires rapid, deep and sustained reductions in global greenhouse gas emissions, including reducing global carbon dioxide emissions by 45 per cent by 2030 relative to the 2010 level and to net zero around mid-century, as well as deep reductions in other greenhouse gases.”
- It addresses the gap between countries’ current climate commitments and the goal of keeping warming to 1.5 °C, noting that “implementation of all submitted nationally determined contributions, is estimated to be 13.7 per cent above the 2010 level in 2030.”
- It calls for “accelerating efforts towards the phase-down of unabated coal power and inefficient fossil fuel subsidies, recognizing the need for support towards a just transition.”
- At the insistence of India, the provision watered down an earlier draft that had called for phasing out the use of unabated coal. Still, the calling out of coal and fossil-fuel subsidies marks a first for a landmark climate agreement.
- It calls upon “multilateral development banks, other financial institutions and the private sector to enhance finance mobilization in order to deliver the scale of resources needed to achieve climate plans.”
- It reiterates the USD 100 billion per year financing commitment by developed countries to support developing countries in dealing with climate impacts and calls for “significantly increasing” such funds.
- It urges developed countries to “at least double their collective provision of climate finance” to help developing countries mitigate and adapt to the effects of climate change.
Announcements from week two of COP26
Below are some of the key announcements by countries and other participants in the second of the conference’s two weeks.
The U.S. and China agreed to work together toward keeping temperature rise to 1.5°C.
- In a joint declaration, the two biggest emitters of greenhouse gases said they intend to cooperate on a range of issues, including reducing methane emissions, curbing deforestation and spurring the transition to clean energy.
- The countries committed to action this decade “to avoid catastrophic impacts” of climate change.
The U.N. said it would look to drive accountability for net-zero pledges.
- That includes developing accountability tools for initiatives such as the Global Financial Alliance for Net-Zero (GFANZ) and the Race to Zero campaign.
- U.N. Secretary-General Antonio Guterres said the GFANZ should mirror the targets and transparency of the Net-Zero Asset Owners Alliance, a member of GFANZ.
- “The Net-Zero Asset Owners Alliance – the gold standard for credible commitments and transparent targets – is managing $10 trillion in assets and catalyzing change across industries,” said UN Secretary-General Antonio Guterres. “I encourage the much larger Glasgow Financial Alliance for Net Zero to follow the same path.”
Leaders pledged to assist communities on the frontlines of climate change impacts.
- They include over 70 endorsements of the Principles for Locally Led Adaptation and more than USD 450 million mobilized to support locally led approaches.
- The Race to Resilience campaign aims to unite initiatives that strengthen the resilience of communities comprising more than 2 billion people worldwide.
- The Adaptation Fund, which helps developing countries build resilience to climate change, announced USD 232 million in commitments, including pledges from U.K., U.S., Canada, Sweden and 10 other countries.
Thirty-two countries agreed to make sales of all new cars and vans zero emission by 2040.
- The group aims for sales of all new cars and vans to be zero emission in leading markets by 2035.
- General Motors, Ford, Mercedes-Benz, Volvo and Jaguar Land Rover are among automakers that joined the pledge. (Toyota, Volkswagen and Nissan-Renault did not.)
- The pledge also received backing from cities, fleet owners and investors.
A coalition of at least 23 countries announced new innovation missions to speed the development of clean technologies.
- The countries, which cover 95% of global public investment in clean technology research and development, will focus on technologies for cities, industry, carbon dioxide removal, and the production of renewable fuels, chemicals and materials.
Forty-seven countries pledged to build health systems that are sustainable.
- The group, which includes the U.S., Spain, Morocco and Malawi, represents more than a third of global health care emissions.
At least 24 countries committed to work together reduce carbon emissions in aviation.
- They include the U.S., U.K, Canada, France, Japan, Spain, New Zealand and Ireland, which all pledged to promote the development of sustainable jet fuel and work to spur innovation in the development of low- and zero-carbon aircraft.
Nineteen governments said they would work together to establish zero-emissions shipping corridors between two or more ports.
- The countries, which include the U.K., U.S., Canada, France, Germany, Australia and New Zealand, said they would create at least six green corridors by 2025, with the aim of scaling up activity by 2030.
- The pact would involve deploying zero-emission vessel technologies and installing alternative fuel and charging infrastructure in ports.
- The group said that vessels transiting a green corridor would not be required to be zero emissions.
New country commitments align with a 2.4°C temperature rise, an analysis by Climate Action Tracker shows.
- The independent scientific analysis reflects country climate commitments submitted so far.
- That’s slightly lower than 2.7°C previously. (The planet has warmed by 1.1°C already.)
- Coal is the main sticking point. China, India, Indonesia and Vietnam all continue to develop coal projects. Many countries, including Japan and South Korea, are counting on coal to remain a major contributor to electricity in 2030.
- Pledges to cut methane emissions and curb deforestation also might be overstated, according to the tracker, which notes that methane pledges are already part of country’s existing plans, raising questions about the net new reductions in emissions the pledge might achieve.
- Net-zero targets from Australia, Russia, Saudi Arabia, Turkey, India and the United Arab Emirates all lack critical details on scope, design and accuracy, the tracker finds.
- Separately, the U.N. released a preliminary update to its 2021 Emissions Gap Report, with an assessment that the world is most likely on a course for 2.5°C of warming based on the latest NDC commitments. The report points to disconnects between countries’ action plans and their net zero targets.
- Both the Climate Action Tracker and U.N. report suggest why countries agreed at COP26 to submit revised climate targets sooner rather than later.
The U.K. pledged USD 36.8 million for cities targeting net-zero.
- The funding will back a new Urban Climate Action Program, which aims to help cities across Africa, Asia and Latin America reduce emissions and reach net-zero by 2050.
Scotland pledged USD 1.3 million for loss and damage in developing nations, the first time an industrialized country has committed this type of funding.
- The fund would help countries address loss and damage floods, wildfires and other loss and damage from climate change
Several leading scientific organizations committed to improve communication of climate risk.
- The coalition, which includes the World Meteorological Association and the World Climate Research Programme, will work to ensure that research and reports for policymakers set out clearly the full scale of the dangers the society faces if global temperature increase is not held below 1.5 degrees.
Several high-profile fashion industry companies upped the ambition of their climate pledges to cut their emissions in half by 2030.
- This group includes companies like Burberry, H&M, Nike, LVMH, Adidas and Puma, among others. But the industry as a whole still accounts for around 4% of global emissions.
- Research by MSCI has found that the majority of textile, apparel and luxury goods companies are not addressing most Scope 3 carbon emissions, which make up the bulk of their footprint.
- Ninety-five percent of the industry has an Implied Temperature Rise greater than 2.5°C, MSCI has found.