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COP26: a planet in the balance

COP26 has been widely billed as perhaps society’s biggest opportunity so far to slow climate change. What’s the context and what should we expect?

This November, heads of state, climate policy experts, negotiators and observers, development finance institutions, humanitarian agencies, private sector and civil society will converge for the United Nation’s 26th Conference of the Parties (COP).

As the UN’s flagship annual climate change forum where countries debate and agree efforts to mitigate climate change through the reduction of greenhouse gases, every COP matters, but this COP could matter more than any. Already postponed by a year due to the COVID-19 pandemic, COP26 could determine whether we win or lose the race to reduce greenhouse gas emissions and avoid catastrophic rises to global temperatures and help the world’s most vulnerable people adapt to the effects of climate change that are already ‘locked in’ by historical emissions.

COP26 could determine whether we win or lose the race to reduce greenhouse gas emissions and avoid catastrophic rises to global temperatures

Paris hosted COP21 in 2015 and is now remembered as the watershed moment where 196 countries agreed to pursue "efforts to limit the temperature increase to 1.5°C above pre-industrial levels”.

Since then, our understanding of climate-related financial risks has deepened with recommendations from the Task Force on Climate-Related Financial Disclosures now becoming mandatory in the UK and other jurisdictions, and momentum has accelerated behind Net Zero commitments from countries and companies. COVID has also given us some unwelcome insight into how systemic risks transfer through the economy, while the summer floods in New York, Germany and forest fires in California and Europe teach some of the richest countries in the world hard lessons about what happens in the absence of resilience.

But just as Paris is remembered for finally bringing consensus to the 1.5°C warming target, Glasgow should be remembered as the COP where the implementation of climate solutions accelerated.

Co-hosted by the UK and Italy, there will be four big topics on the minds of those in Glasgow over the fortnight from November 1:

Net Zero targets

As part of the Paris agreement, every five years, commitments to reduce carbon emissions, so-called Nationally Determined Contributions, should be restated. While we expect more commitments ahead of COP26, a recent report from the UNFCCC found that current commitments put us on track for 2.7C warming, with emissions to increase 16% by 2030. The acceleration of a phase-out of coal and the deployment of electric vehicles along with the curtailment of deforestation are key areas of focus for the UK COP Presidency.

Adaptation

Adaptation will also be a key feature in recognition that climate change cannot be fully mitigated and by mid-century, even if we were to cease emissions today, global warming will still continue to increase, with the difference between 1.5°C and 2°C affecting the world’s most vulnerable the greatest.

Climate finance

In 2015, developed countries committed $100bn in finance each year to help developing countries mitigate and adapt to climate change – that figure has fallen short in every year since that commitment was made.

Alignment of capital

In order to finance the transition to a net zero and climate resilient economy, trillions of dollars will need to be reallocated in a way that aligns with a 1.5°C target set in Paris. The focus for the finance sector will be on transition plans for the real economy and financial institutions, and portfolio alignment and other investment strategies in line with Paris goals.

While it’s difficult to predict what success looks like, in these pages our climate and resilience experts and thought leaders will explore how these high-level commitments affect countries, communities and the businesses and industries that support them.

Once the seat of Scotland’s industrial revolution, Glasgow could be about to become synonymous with the next industrial revolution that leads to a net zero, climate resilient and just transition.

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