The quick read
- The world is on track for around 3°C of warming, increasing the pressure on world leaders to set detailed policies on how they will mitigate climate change.
- We must see measures in areas such as green finance, phasing out coal and shifting to cleaner vehicles, says Jim Watson, Professor of Energy Policy at UCL.
- We also need clarity about where the outstanding funding to help developing nations tackle climate change will come from, says Danae Kyriakopoulou, Senior Policy Fellow at the Grantham Research Institute on Climate Change and the Environment.
- Investing
With urgent action required to limit global warming, two climate change leaders discuss the outcomes they’d like to see from the crucial Glasgow conference.
The world is failing to slow global warming, despite countries agreeing to tackle the issue in the Paris Agreement more than five years ago. That is the sobering reality facing leaders as November’s COP26 climate conference takes place.
In August, Intergovernmental Panel on Climate Change (IPCC) research showed the world is heading for around 3°C of warming1 – far beyond the 2°C upper limit set by world leaders in Paris in 2015.
The World Economic Forum says carbon-dioxide levels in the atmosphere are 50% higher than in pre-industrialised times2.
The 1°C global rise measured to date is already causing climate breakdown and critical damage to humans, animals and ecosystems. There is a significant financial cost too – business leaders say four of their five biggest risks are environmental, according to a WEF report3.
This heaps pressure on governments, companies and investors to set concrete, detailed policies for how they plan to mitigate and adapt to climate change at COP26.
In a powerful speech at the conference, Mia Mottley, Prime Minister of Barbados, said: “When will leaders lead? Our people are watching, and our people are taking note. And are we really going to leave Scotland without the resolve and the ambition that is sorely needed to save lives and to save our planet?”
Jim Watson, Professor of Energy Policy at UCL, says: “The IPCC report and pledges to date point to a dire future. But there are some hints of optimism, such as China’s recent pledge to stop funding overseas coal plants, which will make a big difference.”
Watson also welcomes the US’s aim to have carbon-free electricity by 2035, but says he will be looking for evidence of investment to achieve that change.
“Across all countries, I’ll be looking for details of short-term measures in areas such as green finance, supporting technology, phasing out coal and shifting to cleaner vehicles,” he adds.
Support for developing nations
Danae Kyriakopoulou, Senior Policy Fellow at the Grantham Research Institute on Climate Change and the Environment, highlights that developed nations have mobilised around $80 billion of the $100 billion of annual climate finance they promised to help developing nations, according to the OECD4. So, she hopes another crucial outcome from COP26 will be statements about where the remaining $20 billion will come from and where it is going.
“The least-developed economies are least responsible for climate change, but have the lowest resources to address it,” she says. “Most face challenging economic times. Developed economies have a responsibility to help them adapt and transition. It is not just a moral imperative but also an economic one. Investments in developing nations can generate climate solutions that offer huge potential returns.”
In September, the US announced it would double its climate-change aid, and Kyriakopoulou says we need more such commitments.
“A key outcome of COP26 will be convincing developing economies they’re getting enough support,” she says. “Otherwise, they might just go ahead with less green, but quick and easy economic developments, which is a risk we cannot afford.”
“We need to improve trust between nations,” adds Watson. “Getting to that hundred billion finance has been a contention for some time. Trust is built by backing up your promises. The US is making the right finance pledges and starting to make good on previous promises. But African governments recently said they want a much bigger pledge of $1.3 trillion a year by 2030. We will get to that $100 billion, but it is not the end of the road.”
Kyriakopoulou says that, so far, investment has focused on mitigating the risks, but we also need to invest in adaptation to cope with the coming climate changes, such as forest management and flood defences.
One factor that will help is countries issuing sovereign green bonds, which bring the environmental finance market more into the mainstream. The UK has issued a second Green Gilt, and she hopes more countries will announce their intention to issue green bonds at COP.
More ambitious companies
Companies must also use COP to announce a step up in ambition as only one in five public companies had adopted net-zero targets as of March 2021, according to The Energy and Climate Intelligence Unit and Oxford Net Zero5. Kyriakopoulou says the remaining 81% must do the same if we are to meet carbon-reduction targets. At COP, the UK announced that 60 of its largest 100 companies have now signed up to the UN’s Race to Zero campaign. It called on the global private sector to do the same.
Kyriakopoulou would also like to see more incentives and regulatory rules announced to support climate-change mitigation and adaptation. At COP, 40 nations, including the UK, US, China and India, will impose standards, incentives and rules to support new climate-friendly technologies. The UK also announced rules forcing most large firms and financial institutions to show how they intend to hit climate-change targets. An expert panel will scrutinise the plans to ensure they are not just spin.
Another often cited obstacle to carbon neutrality is the cost of the transition. But Kyriakopoulou says that argument is often based on short-term data and ignores the long-term costs of not doing these things, so markets need to change the way they calculate the effects of climate-change action.
Enabling a just transition
As well as helping lower-income countries, COP policies need to make sure the transition to a net-zero economy happens fairly across gender, racial and other social divides.
Kyriakopoulou says the most vulnerable segments of the population are suffering the worst consequences of climate change and are most at risk from the transition.
“A useful parallel is with globalisation – even though the net benefits were positive, they were shared unevenly, which has led to deglobalisation,” she says. “It will be an existential problem if that happens with decarbonisation, so we need to make sure transition measures are fair to all. An example is Canada, which imposed a carbon tax but compensated the hardest-hit households with rebates.”
As Watson says, not everyone can afford to shift to low-carbon heating and cars.
“I guess COP will focus more on zero-carbon pledges, but if they don’t deal with a just transition, it won’t work,” he says. “We have to keep the public involved and not only passive recipients of change.”
Jim Watson is Professor of Energy Policy and Research Director at the UCL Institute for Sustainable Resources, Research Director of the FCDO Climate Compatible Growth programme, and chairs the Technical Advisory Group to the World Bank Energy Sector Management Assistance Programme (ESMAP).
Danae Kyriakopoulou is Senior Policy Fellow at the Grantham Research Institute on Climate Change and the Environment. She leads the Institute’s policy work on climate and economic development.
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1 Climate change 2021: the physical science basis, Intergovernmental Panel on Climate Change, August 2021
2 Met Office: atmospheric CO2 now hitting 50% higher than pre-industrial levels, World Economic Forum, March 2021
3 The Global Risks Report 2021, World Economic Forum, January 2021
4 Climate finance for developing countries rose to USD 79.6 billion in 2019, OECD, September 2021
5 Taking stock: a global assessment of net zero targets, The Energy & Climate Intelligence Unit and Oxford Net Zero, March 2021
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- The world is on track for around 3°C of warming, increasing the pressure on world leaders to set detailed policies on how they will mitigate climate change.
- We must see measures in areas such as green finance, phasing out coal and shifting to cleaner vehicles, says Jim Watson, Professor of Energy Policy at UCL.
- We also need clarity about where the outstanding funding to help developing nations tackle climate change will come from, says Danae Kyriakopoulou, Senior Policy Fellow at the Grantham Research Institute on Climate Change and the Environment.
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