Whitechurch Blog: Reflecting on COP26 - Another missed opportunity?

30th November 2021

Read the full PDF here

Some two weeks have passed since the close of the 26th Conference of the Parties (COP26 for short). As the buzz subsides, and the headlines are forgotten, how will COP26 – our ‘last best hope’ for climate action – be judged?

It took negotiators until late Saturday evening (the conference overran, as usual, it’s Friday evening deadline) to agree a deal. The Glasgow Climate Pact was eventually adopted; however, celebrations were subdued, thanks in part to an 11th hour objection by India to water-down language on coal use. The original text included a statement to ‘phase-out’ the most polluting fossil fuel. The mere mention of coal is a landmark – it is the first time any fossil fuel has been mentioned in the final text of a COP agreement. However, this was eventually rephrased – the final statement, requiring a ‘phase-down’, a reflection of India’s (as well as other developing countries) ongoing reliance on coal for economic growth.

Given the disappointing conclusion, you’d be forgiven for thinking that the whole event was a waste of time, money and, given the number of delegates arriving via private jet, energy as well. But look beyond the gloomy headline articles, and there are reasons to be more positive. Take for instance the Global Methane Pledge, announced at COP26, that saw more than 100 countries commit to reduce emissions of methane, a powerful greenhouse gas, by 30% by 2030 (relative to 2020). Despite the notable absence of China, Russia and India, both the US and EU adopted the pledge. Methane is a big deal – it accounts for almost half of the warming we have observed since the onset of the Industrial Revolution. Despite this, it only persists in the atmosphere for around 12 years, so the effect of any reduction in emissions will be felt much sooner than the equivalent reduction in carbon dioxide (that typically persists in the atmosphere for many hundreds of years).

Elsewhere, world leaders from 110 countries, which together account for 90% of the world’s forests, agreed to halt and reverse deforestation by 2030. A word of caution here – a similar pledge signed in 2014 had little to no impact on forest loss. With no ‘big stick’- there is no legal obligation to comply – there are concerns that the same could happen this time around. The signatories include Brazil – deforestation in the Amazon Basin has increased in recent years, at least in part as a result of President Bolsonaro’s prioritisation of economic growth. He recently declared the Amazon ‘open for business’. Reversing deforestation is an essential component of any plan to reach global net-zero by 2050. Trees lock in carbon, but the clearing of forest releases huge volumes of greenhouse gas. The announcement could not be more timely – recent research showed that a number of the world’s forests are now net carbon sources (that is, they emit more than they absorb), due to a mixture of human pressure and rising global temperatures.

On finance, the picture was less rosy. The much anticipated $100 billion, promised to developing countries by 2020 at the 2009 Copenhagen climate talks, was not fulfilled. At COP26, the Presidency was forced to acknowledge that the target will be missed again this year and is unlikely to be hit next year either. It will be at least 2023 before the target is met, 3 years behind schedule. By this time, $100 billion will be insufficient – a growing number of developing countries are now demanding $1 trillion in climate finance by the end of the decade, including a separate capital stream to cope with climate-related losses. The latter has been strongly opposed by developed nations, concerned that any acceptance would equate to formal acceptance of liability for multi-trillion-dollar damages.

There is a growing sense that despite a ground swell in public support for efforts to mitigate climate change, governments are unwilling to shoulder the short-term economic costs. Take the ‘global’ pledge to eliminate coal-fired power generation in the 2030s (developed nations) or 2040s (developing nations). Despite renewed enthusiasm about climate policy under the Biden Administration, the US did not sign up to the pledge, a measure of the political pressure felt at home – with a razor-thin majority in the Senate, Biden needs the support of Democrat senators keen to protect jobs in coal-producing states.
So will COP26 be remembered as a muted success, or another climate conference failure? The answer would appear to be somewhere between the two. There is little doubt that the event failed to live up to pre-COP hype, and a distinct impression that the metaphorical can has been kicked a little further down the road. There were some grounds for optimism – the mere mention of fossil fuels in the final draft is a seemingly minor but symbolic moment. That India has committed to a net-zero target, albeit two decades beyond the 2050 deadline, is also a step in the right direction. Perhaps COP26 is best summarised by its President, Alok Sharma. In his closing remarks, he declared that 1.5°C remained within reach ‘but, its pulse is weak’. With that in mind, it is hard not to reflect on COP26 as yet another missed opportunity, and a further narrowing of the window within which we must act if we are to avoid the worst effects of climate change.

For information on Whitechurch Securities Ltd Sustainable Investments, please visit our website www.whitechurch.co.uk or contact a member of our Business Development Team on:
Email: dfm@whitechurch.co.uk
Phone: 0117 452 1207

Read the full PDF here


Dr Daniel Say



Important Notes: This publication is approved by Whitechurch Securities Limited which is authorised and regulated by the Financial Conduct Authority. All contents of this publication are correct at the date of printing. We have made great efforts to ensure the accuracy of the information provided and do not accept responsibility for errors or omissions. This publication is intended to provide helpful information of a general nature and is not a specific recommendation to invest. The contents may not be suitable for everyone. We recommend you take professional advice before entering into any obligations or transactions. Past performance is not necessarily a guide to future performance. Investment returns cannot be guaranteed and you may not get back the full amount you invested. The stockmarket should not be considered as a suitable place for short-term investments. Levels and bases of, and reliefs from, taxation are subject to change and values depend on the circumstances of the investor.

Data Protection: Whitechurch may have received your personal data from a third party. If you invest through us, we may use your information together with other information for administration and to make money laundering checks. We may disclose your information to our service providers and agents for these purposes. We may keep your information for a reasonable period in order to manage your investment portfolios. We record telephone calls, to make sure we follow your instructions correctly and to improve our service to you through training of our staff. You have a right to ask for a copy of the information we hold about you and to correct any inaccuracies. When you give us information about another person you confirm that they have appointed you to act for them; that they consent to the processing of their personal data, including sensitive personal data and to the transfer of their information and to receive on their behalf any data protection notice.

Whitechurch Securities Limited is authorised and regulated by the Financial Conduct Authority. Financial Services Register No. 114318.
Registered in England and Wales 1576951. Registered Address: C/o Saffery Champness, St Catherine’s Court, Berkeley Place, Bristol, BS8 1BQ
Correspondence Address: The Old Chapel, 14 Fairview Drive, Redland, Bristol BS6 6PH Tel: 0117 452 1208 Web: www.whitechurch.co.uk