The Conference of the Parties COP26 taking place in Glasgow, UK, is the 26th iteration of the climate annual conference which brings together almost 200 countries to negotiate the climate action plans. Having participated to several of these events since 2010, we were able to provide recommendations to country representatives which focused on climate mitigation (which focused on reducing the carbon injected into the atmosphere which has global warning impacts) as well on global resilience and adaptation (which aims at accelerating the adoption of prevention measures and financing to build smarter). Both mitigation and resiliency should go hand in hand, even though they often don’t. Basically, as we work towards a reduction of our use of fossil fuels, we should also invest in reducing vulnerability and exposure of people and assets to climate induced disasters.
The COP26 is the most important climate summit since the COP15 that took place in Paris in 2015 resulting into the Paris Climate Agreement which outlined ambitious targets to reach zero net emission by 2050. This year climate summit was of particular importance as it took place while most countries are still struggling to recover from the Global Pandemic Covid 19. Furthermore, the pandemic crisis recovery has been followed by hyperinflation and energy price spikes with crude expected to reach 100 US$ a barrel by early 2022. These macroeconomic conditions have impacted the summit and are demonstrating that global climate actions will take the backseat particularly during crisis when countries are still recovering from tough economic contraction, which as a matter of reference resulted in 8.5 US$ trillion of dollar in lost output in 2020. This is roughly 10% of global GDP.
What did COP26 Accomplish and why is it so important?
For most people the COP26 seems a disappointment since it has not been able get most polluting economies to commit to reach zero net carbon emission by 2050. However, the COP26 has helped consolidate the positive momentum around climate mitigation and resiliency investment and has provided more manageable expectation on what can and cannot be accomplished in the short term. The main impact of the summit are: a) Over 100 countries signed off to the Methane Pledge initiative aiming to reduce by half gas emission (which is 80 times more potent in terms of global warming potential than CO2); b) Agreement of the G20 to stop financing coal powered energy projects abroad; c) consolidated momentum around climate finance which will naturally result in a massive expansion of the Environmental Social and Governance (ESG) investment focus.