Between progress and room for improvement: these are the results of the UN climate conference COP26 and its implications for the future
Source & Copyright by UN Climate Change Conference UK 2021
Author: House of Eden
- Declaration of fossil energy sources as discontinued models
- Strengthening the global South through industrialised countries
- Sustainability as a promising future model for companies
On 13 November, COP26 reached an agreement after a one-day delay, following two weeks of discussions between 197 countries on opportunities for a green future. Before the climate conference began, it was heralded as a crucial turning point in the fight against climate change- the greatest opportunity to produce coordinated action to mitigate climate change. However, after the end of the conference, it leaves many questions unanswered. Although progress has been made, there is a massive need to catch up, so that modified plans for climate protection are to be launched as early as next year.
The result in a nutshell: The voluntary commitments (NDCs) submitted so far reach a projected global temperature increase of 2,4 degrees by the end of the century. The 1,5 degree target of the Paris Agreement is thus far away. By comparison, however, "just keep doing what you're doing" would increase global warming to five to six degrees. Almost a quarter of the participating countries have not yet submitted NDCs.
Nevertheless: The COP26 made it unmistakably clear that it is time for a sustainable paradigm shift in politics and business. That visionary personalities and countries have to come together to protect the planet now and together. The most important results of the conference show how exactly.
The main results of COP26
- Initiation of the coal phase-out
- Mobilising climate finance and aid
- Ambitious self-commitments
- Supplement to the rulebook for the Paris Climate Agreement
1. Initiation of the climate phase-out
Even if COP26 only marks the start of the coal withdrawal, it is a historic moment. For the first time, the decision against coal is clearly stated in the final declaration of the World Climate Conference. In the course of this measure, there is an appeal to the states to initiate or accelerate their phase-out of coal and to stop inefficient subsidies for fossil energies. Criticism of this: Which subsidies in climate-damaging energies are declared efficient is left up to each country.
The fact that it is only about initiating the phase-out of coal is due to the last-minute veto by India, China, Venezuela and Iran. Already after negotiating the final outcome document, COP President Sharma was forced to amend the paper due to the announcement of blockages by the respective countries. This is a violation of the principles of climate diplomacy. In consequence, this means a clear disillusionment with the prevention of the global decision to phase out coal. A last stand by the old, fossil energy world.
2. Mobilising climate finance and aid
The financial results of COP26 lie at the intersection of disappointment and hope. The promise made by the industrialised countries in 2009 to mobilise 100 billion US dollars annually from 2020 onwards has been postponed until 2023. These funds are primarily to support the phase-out of fossil energy and implement adaptation measures. By 2025, however, the investments and loans for this purpose are to be doubled and will particularly affect the area of modern technologies for overcoming climate change.
The question of responsibility, competence and thus also solidaritybecame a hotly contested issue in this context. While developing countries have been calling for a mechanism to compensate for climate damage for years, industrialised countries fear confrontation with incalculable financial demands or liabilities. And are correspondingly hesitant to make investments. As a consequence, Germany was one of the few countries to commit to investing and is working with insurance companies on concepts to alleviate the concerns of other industrialised countries. In addition, a competent secretariat will be established to deal with the issue - there will be no financial institution for the time being, as demanded by the Global South.
3. Ambitious self-imposed commitments
The indisputable urgency for action to limit global warming to 1.5 degrees became particularly clear again. The final document of COP26 states that faster and more decisive action is needed to halve the annual amount of CO2 by 2030. Under this increased pressure, 151 countries have so far made climate commitments.
Source & Copyright by UN Climate Change Conference UK 2021
However, these commitments reduce the global temperature increase to only 2.4 degrees by the end of the century, but at the same time increase CO2 emissions by 13.7% by 2030. China and the USA are thus in the spotlight as the biggest CO2 emitters. China is responsible for around 30% of global emissions and only intends to reduce its emissions from 2030 onwards. The missing NSCs of about a quarter of the countries are to be submitted by next year. A intensification of the five-year rhythm of the Paris Agreement that affects most countries. It is about closing the gap between targets and their actual implementation.
4. Supplement to the rulebook for the Paris Climate Agreement
Work on the rulebook for the Paris Agreement has been ongoing since 2015 and has now been completed. This means that there are binding rules according to which all states must collect and calculate their emissions in detail and report them to the United Nations by 2024. This measure is primarily intended to create trust between states, as both transparency and comparability can now be guaranteed.
Appropriately, the book also regulates international cooperation on climate protection. In order to achieve a greater effect in reducing emissions, it is considered more sensible to also support projects outside one's own country. As a consequence, the Rulebook also promotes climate financing by industrialised countries and mobilises them despite uncertainties.
Sustainability as a model for success
In addition to the states, companies play an important role in the COP26 due to the devastating environmental impact of conventionally operating industries. Dickon Pinner, Senior Partner at McKinsey and Co-Head of McKinsey Sustainability, describes the conference as the first to focus on the increasing role of the private sector alongside governments. It is the moment for “courageous leadership”, as the construction of a new economy, which requires the largest redistribution of capital in history, is imminent in a very short time.
With the phase-out of fossil fuels, this redistribution concerns investments in renewable energies, so that every step along the entire supply chains is no longer powered by coal. In addition, investments in sustainable as well recyclable materials from environmentally friendly production. According to Pinner, sustainability is thus becoming the new standard for managers, the organisational principle for companies. So those who can meet the demand for it will be able to decide a decisive competitive advantage for themselves.
Lara Obst, climate expert at Climate Choice - a start-up for sustainable solutions for corporate climate transformation - also explains in an interview with Haus von Eden that brands can no longer afford not to invest in sustainability. Such investments are future-oriented, strategic decisions that guarantee long-term corporate success. Meaning: If one wants to be and remain competitive, one has to integrate sustainability into one's corporate DNA. And do it ASAP.
Does the COP26 usher in a new era in business?
Even if COP26 only marks the - almost - consensus on launching the coal phase-out, even this step ushers in a new era for the economy. Innovative climate technologies instead of steadily growing COXNUMX footprints. Sustainable investments instead of short-term profit orientation. Collaboration instead of commitments within national borders. It becomes clear: Most industries have to modify their working methods extensively or fundamentally change over. Monetary successes must be thought of in the long term for the benefit of the planet - investments must be made in the future. Climate protection is becoming the number one priority.
The World Climate Conference proved that most countries recognise this development. The conscious mentality seems to manifest itself more and more in self-commitments to achieve climate neutrality by the middle of the century. And it is precisely this announcement by many countries that sends a clear signal to the blockers of change: Those who fail to recognise that coal, oil and gas cannot play an essential role in a climate-neutral economy will supposedly experience a role change themselves. This means that power relationships are redistributed as a result of new needs - countries that are economically dependent on obsolete models such as coal lose their relevance, have to innovate or insist on cooperation.
The decisive factors here are region and sector. Building a new economy is linked to infrastructure, to financial capacities. Keyword: responsibility of the industrialised countries towards the global South. Example: At COP26, some countries launched an initiative to make the energy transition in South Africa possible. In contrast, the sector factor does not need any cooperation. Rather, a new mindset within relevant, high-turnover industries. Because it is precisely these - like the fashion industry - that have to establish new ways of working in order to limit climate damage. Drastic change is needed to minimise their footprint.
Dialogue as a driver of the future
The shift in economically established processes increases the pressure on consumers, companies, investors and regulators as well as governments. The pressure, demand-oriented solutions as promptly as possible and climate-resistant, low-emission solutions technologiesand method to deliver. What is needed is an inclusive dialogue between the parties so that the promotion of public-private partnerships produces successful business models for climate security. COP26 has initiated this dialogue - its success remains open for now.
What are the implications of COP26 for companies?
It is clear that the zeitgeist creates a new demand. The need for green change. Companies that can do just this now have the opportunity to set themselves apart from their competitors. To decide the future for yourself with an orientation towards the future. So even though this opportunity also brings challenges, it is productive for companies to prioritise sustainable scenario planning in their strategy. It is important to think through financing, especially adaptation financing, and to proactively shape the future in order to remain relevant in the future.
What does the COP26 mean for the future?
As almost every year, the COP causes mixed feelings. Especially because it was again much about words rather than action. And while words can of course usher in action, the scepticism about this is due to the past. Too often, calls to action have been watered down and the climate has deteriorated. Adjustments to the rulebook and the commitment to present improvements to climate protection plans as early as next year, however, now make a clear statement for more hope.
What is important now is the uncompromising commitment of all parties: the states, politics, companies and consumers. Sustainability must become the only choice. Moving away from the image of compromise. Cooperation for change and pressure against blockers of change must be mobilised to limit climate damage. And while no clear record of success can yet be drawn for COP26, the facilitation of transnational dialogue and the motivation of most states is an important step in the right direction.