Briefings

Will the COP26 climate summit be a success?

World leaders are currently meeting at the COP26 climate summit in Glasgow to commit to measures to stop catastrophic global warming. Will they produce more than just hot air?

What’s happening?

COP26, currently taking place in Glasgow, is the 26th meeting (“conference of the parties”) of the nations signed up to the UN’s Framework Convention on Climate Change, the main international mechanism for agreeing actions to cut emissions of greenhouse gases. The annual conferences have their roots in the Rio Earth Summit of 1992, when the UN framework itself was established. COP1, in Berlin in 1995, laid the groundwork for the world’s first legally binding climate-change treaty, the Kyoto Protocol of 1997 (COP3). The Kyoto agreement required developed countries to reduce emissions by an average of 5% below 1990 levels, and set up a carbon trading system. The most significant COPs since then have been COP15, in Copenhagen in 2009, when nations failed to agree a major updating of Kyoto. Then COP21, held in Paris in 2015, when they succeeded.

And all this talk has been effective?

Measured by the amount of carbon dioxide in the Earth’s atmosphere, the answer must be no. For many millennia (scientists believe) the level of carbon in the atmosphere was stable at 275-285 parts per million (ppm). By the 1910s, following only a few decades of industrialisation, it had risen to 300ppm. By 1992, when the world got together at Rio to discuss the mounting evidence of anthropogenic warming, the level had reached 356ppm. Since then it has carried on rising at an accelerating rate. Over the past 30 years, the level of carbon has jumped by 2ppm every year – about three times the average rate during the 20th century – and now stands at 420ppm. Under the most recent UN projections, the world is on target to be 2.7˚C hotter by this century’s end compared to pre-industrial levels – far above its 1.5˚C target.

It’s all been for nothing then?

It certainly hasn’t yet succeeded in halting the rise in carbon dioxide levels, or global temperatures. Indeed, the UN’s assessment is that if all such pledges by 192 countries under the 2015 Paris accord are taken together and were implemented, there would still be an increase of 16% in global emissions by 2030 compared with 2010. This would lead to warming of the planet by 2.7˚C above pre-industrial levels by the end of the century. But for all their flaws, says The Economist – and the fact that disappointment is virtually baked into the system – the UN framework and its COPs “play a crucial part in a process that is historic and vital: the removal of the fundamental limit on human flourishing imposed by dependence on fossil fuels”. One reason is that some of them, like Paris, really do make a difference. Another is that they focus minds in governments and business, and set a direction of travel. Even the most notorious “failed” meeting, at Copenhagen, saw China commit to cutting its rate of emissions for the first time.

So the Glasgow meeting is important?

Not historic like Paris, but potentially very significant. Under the Paris Agreement, 196 nations agreed the most important global climate deal to date, requiring nearly all countries – both developed and developing – to set emissions reduction goals. The mission was to keep the global temperature rise below 2°C and encourage efforts to keep it below 1.5°C. According to Laurent Fabius, the former French foreign minister who presided in Paris, COP26 “is the COP of action, at which we apply the Paris agreement”. This is supposed to be the deadline by which nations provide details of how they will hit their targets, and set new ones. Yet COP26 is taking place during an energy supply crunch in many parts of the world, amplifying fears over the practicalities and costs involved. And the leader of the world’s biggest polluter, China, hasn’t shown up.

How will success be defined?

The British hosts have framed the overall aim of COP26 as “keeping 1.5 alive” – while accepting that there’s little chance of a commitment to hitting that level now. In the first few days of the two-week summit, there were already considerable successes on deforestation (agreeing to end it by 2030) and methane (bringing most of the world’s emissions into the ratchet process of gradually more stringent targets). Other hoped-for deals being negotiated are on oceans, the financing of coal, and electric vehicles. There may well be big blow-ups over financing, and over the burden placed on developing countries, especially in Africa, which have done little to cause warming but are being hit hard by it. And while there are hopes of progress on a global carbon trading market to help cut emissions, there’s no sign of the move that could genuinely make a big difference: a global carbon tax that puts a price on carbon and unleashes market forces in the fight against climate change. Overall, though, there should be enough wins for the UK hosts to declare a modest success.

What role will business play?

Those like Greta Thunberg, who dismiss the COPs as so much “blah, blah, blah”, fail to understand the cumulative ratchet effect of the process – and that Paris, in particular, was “the moment when global Big Money switched sides and began to defund the fossil industry”, says Ambrose Evans-Pritchard in The Daily Telegraph. Already, funds commanding $103trn have signed up to the UN’s green code (PRI). And this week Mark Carney, the UN’s climate-change finance adviser, announced that the new Glasgow Financial Alliance for Net Zero – more than 450 big banks, insurers and asset managers across 45 countries – has up to $130trn of capital committed to hitting net zero by 2050. Still, don’t believe the “magical thinking” of a cost-free transition, says Jeremy Warner, also in the Telegraph. The costs of decarbonisation to individual households are going to be significant, and for higher earners there will probably be higher taxes in addition. “Somewhere over the rainbow, a cleaner world of much lower energy costs may await, but both financially and geopolitically, getting there is going to be a monumental struggle.”

Recommended

Is now a good time to buy a house?
Property

Is now a good time to buy a house?

Is now a good time to buy a house? That’s something many people might be asking as house prices, and mortgage rates, begin to decline
30 Jan 2023
Government consults on small pensions pots - here’s what to do if you have several small pension pots
Pensions

Government consults on small pensions pots - here’s what to do if you have several small pension pots

The Department for Work and Pensions has started consulting on helping workers who hold a number of small pension pots. We look at how the government …
30 Jan 2023
Self-assessment tax returns: what you need to know about getting your tax bill right
Income tax

Self-assessment tax returns: what you need to know about getting your tax bill right

Understanding how self assessment works can help you ensure you pay the right amount of tax, as well as avoid penalties for missing the deadline.
30 Jan 2023
Zoopla: house prices stalled at the end of 2022
House prices

Zoopla: house prices stalled at the end of 2022

The property market looks primed for a slow burn start, and buyers are turning towards flats instead of homes as they prioritise affordability, latest…
30 Jan 2023

Most Popular

Share tips of the week - 27 January 2023
Investments

Share tips of the week - 27 January 2023

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
27 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
When will interest rates go up?
UK Economy

When will interest rates go up?

New interest rates will be announced on 2 February – we look at what to expect.
26 Jan 2023