As the COP26 climate summit reaches its end, negotiators are working rampantly to reach a consensus on the final works to be published at the end of the conference. While the most anticipated speeches delivered by Greta Thunberg and Barack Obama are over, we still have a lot of unexpected conflicts amidst the 197 states, as well as new budding relationships, that have tethered our interest.
One of the most significant aspects of COP26 involves charting a course to ensure COP21 promises are fulfilled – a course that will require countries to report their greenhouse gas emissions (although we will need to scrutinise these reports vigilantly). The importance of the developing world has not been lost on delegates either; an issue to be addressed will be determining whether or not developing countries should be setting decade-long targets, as opposed to the five-year-long targets prescribed to high-income countries.
COP26’s key goals include: securing global net zero before the middle of the century; keeping a 1.5°C rise in world temperatures within reach; devising solutions to protect natural habitats and vulnerable communities; and increasing the financing of initiatives combating climate change.
The UN’s Global Carbon Market
Article Six of the Paris Accords outlined a structure to pinpoint zones where a unit of carbon has been eradicated from the atmosphere – these “carbon offsets” are supposed to make up for an outflux of emissions in other areas. In principle, these offsets could enable developed countries to compensate developing countries, provided there is rigid compliance across the globe. Otherwise, the situation could become like the Clean Development Mechanism of the Kyoto protocol in 1997, which resulted in fraud, bribery and corruption under the surface of the project. Kyoto was the first international agreement that sought a global market solution that would rely on transforming pre-existing financial structures to make it costly to emit carbon and to incentivise the use of clean, sustainable technology.
Keeping 1.5 Alive
As the world nears a 2.7°C rise in temperature before the next century, the feasibility of the numerous pledges made in Glasgow have been called into question and now demand radical action.
Glasgow was meant to be a point of iteration (or a ‘ratchet’, as coined in Paris 2015) where states were meant to readjust their climate change targets to further facilitate constructive action. So far, the pledges seen cannot ensure that the globe will meet the 1.5°C target, unless emissions worldwide are halved. This has prompted the EU and other states to urge countries to return in 2023 with more promising pledges.
The UK’s Role in COP26
The presidency of the summit is expected to release a promising final cover text that intends to show its commitment to 1.5°C. As it stands, the Intergovernmental Panel on Climate Change (IPCC) has warned that even targets below 2°C will still be insufficient to inhibit permanent damage to the earth as a result of climate change.
The Upshot for Us Aspiring Lawyers – Legal Implications of the Summit
Businesses in the UK and other countries with ambitious targets will have to cope with changes in legislation to ensure that these targets are met. It is possible that coal consumption will be disincentivised, and that both fossil fuel subsidies and the production of new internal combustion engines will come to a halt.
Investors are facing increasing pressure to comply with ESG targets as scrutiny has increased within the realm of climate change litigation (as the landmark judgement in the Netherlands has recently proven with Shell being forced to cut down on its emissions).
Governments and industry regulators will be forced to make climate disclosure reports, something that premium-listed corporations in the UK are already subject to under the Taskforce on Climate-related Financial Disclosures (TCFD) framework. The rest of the economy will be held accountable to the framework over the next 3-4 years, which will involve advisory from commercial law firms.
There will be more innovation surrounding ‘green finance’ and major entrepreneurial shifts will reflect this as investors will prioritise green assets more than ever before. Additionally, Allen & Overy has highlighted the importance of transparency frameworks to ensure that countries are actively working towards combating climate change and disclosing their efforts accurately.
While COP26 has served as a scathing reminder that we are far from the Paris accord targets, the final text will determine how close we can get and whether there will be a need to reconvene in 2023.
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