Dear COP 26, Please Put Your Money Where Your Mouth Is
Why a flurry of NDC’s, climate pledges, methane deals, and net-zero targets are insufficient to meet the Paris Agreement temperature goals
The Background (skip if you’re familiar with the UNFCCC, COPs, etc.)
There is consensus among climate scientists that climate change is real, dangerous, and caused by human activities (largely, the world’s richer inhabitants burning fossil fuels, largely in the developed world). Recent reports by the Intergovernmental Panel on Climate Change (The Special Report on 1.5°C, and the beginnings of the 6th general Assessment Report) affirm that rapid reductions in greenhouse gas emissions and concentrations are necessary to stave off increasingly catastrophic climate impacts. In response to scientists’ warnings about the potential dangers of unmitigated climate change, the nations of the world established the United Nations Framework Convention on Climate Change.
From its founding in 1992 and establishment of a UNFCCC Convention, to its first major agreement at Kyoto in 1997, to the more recent Paris Agreement in 2015, the nations of the world have met as the UNFCCC to discuss how to limit climatic changes, adapt to changing climates, and to discuss how to address losses and damages that adaptation cannot cover (for example, sea level rise sufficient to render homes uninhabitable). These near annual conferences are known as Conferences of the Parties, or COPs, wherein the nations of the world seek to address climate change.
At COP 21 in Paris in 2015, the nations of the world agreed to the Paris Agreement, in which Article 2 established that countries would aim to keep global average temperature increase to “well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change”. From this agreement also sprung Nationally Determined Contributions (NDCs). Parties to Paris Agreement (all but four countries in the world have ratified it) are to submit voluntary emission reduction targets that, when summed with other countries’ agreements, aspire to limit global average temperature increase to well-below 2°C, and hopefully 1.5°C. The Paris Agreement included a so-called ‘ratchet mechanism’, whereby Parties that had ratified the Agreement should aim to increase their emission reduction ambition with updated NDC’s every five years.
Right now, the UNFCCC is convening COP 26 in Glasgow, Scotland. COP 26 is a year later than scheduled on account of the Covid-19 pandemic, and as such is the conference where Parties to the Paris Agreement submit their updated NDCs. The recent Special Report on 1.5°C, as elaborated in the 6th general Assessment report clearly stated that global annual CO2 emissions must be reduced by around 50% by 2030, in order for the world to have a chance to limit warming to 1.5°C. Both reports imply a ‘global carbon budget’: how much more carbon we can emit before we are likely to cross the 1.5°C threshold. As of 2020, that budget was around 500 gigatonnes of CO2 (now likely down to around 420 GtCO2), with the world annually emitting just shy of 40 GtCO2/year.
From the above background, there are a few clear concepts that emerge:
1) Given that NDCs are only updated every 5 years, the updates at COP 26 are the last required updates until 2025 or 2026 (depending on interpretation).
2) Given that we have to reduce CO2 emissions by ~50% by 2030 for a solid chance at limiting warming to 1.5°C, we as a global society must begin acting YESTERYEAR to have a chance to achieve that aim established in the Paris Agreement.
3) If emissions flatline at ~40 GtCO2 we will blow through our carbon budget for 1.5C in 13 years. This decade is vital for climate action.
4) Following three. While getting to net-zero emissions of CO2 is *necessary* to stop the increase in global average temperature, distant targets like ‘net-zero by 2050’ obscure the necessary *rate* of decarbonization to have a chance to limit warming to 1.5°C. Near-term, rapid decarbonization is necessary to ‘keep 1.5°C alive’.
5) The longer we delay action to reduce our emissions (mitigate), the more of the ~500 gigatonne budget we deplete, and the harder our remaining task is to “significantly reduce the risks and impacts of climate change”.
6) Therefore, it is vital that COP 26 in Glasgow deliver emissions reductions plans sufficient to meet the historical moment.
A note on framing
There’s much talk about whether COP 26 will be a ‘success’ or a ‘failure’. As a global society, our task is to reduce the impacts of catastrophic climate change as much as possible. This requires doing what is scientifically necessary. As implied by the name, COP 26, this conference is not the first intergovernmental climate rodeo. Given various political constraints, it’s unlikely that COP 26 will yield sufficient ambition and clear, policy-backed action to meet the aims of limiting warming to 1.5°C. As such, it’s important for negotiators, activists, and the general public to remember two things.
First, that whatever result comes out of COP 26, it is likely to be insufficient to accomplish what is scientifically necessary to limit warming to 1.5°C. Secondly, that we must be honest with ourselves about the Gaps: the ambition gap, the emissions gap, the climate finance gaps, and the policy gaps. Success and failure are not a binary, nor is climate change binarily catastrophic or benign. Whatever the outcome of COP 26, as manifested in deals between countries and the Decision Text that builds on previous UNFCCC agreements and decisions, our task as a global society will be incomplete. Whatever the outcome of COP 26, we must be able to accurately identify gaps, know how to close them, and push for adequate policy going forward. We must strive to do what is scientifically necessary to limit warming, and find the political willpower to achieve it. Our success is not defined by individual Conferences, but over the long-run in halting, and hopefully reversing climate change impacts.
The Good News: new NDCs, pledges, commitments, & net-zero targets
There have been a rash of new NDCs, pledges, commitments, and net-zero targets set ahead of and during COP 26. Many countries party to the Paris Agreement updated their NDCs, some of which included more rapid greenhouse gas reduction targets.
Since COP 26 started, a flurry of activity has yielded a number of new pledges, deals, and net zero targets. For starters, there are a handful of significant multilateral commitments from subsections of the COP 26 contingent. Hundreds of countries committed to halt and reverse deforestation by 2030, in a coalition that represents most of the world’s forested area. The United States and European Union launched a joint initiative to reduce methane emissions by 30% by 2030 with their “Global Methane Pledge”. A handful of the world’s wealthiest countries (U.S., U.K., France, Germany, and the EU), announced they would assemble USD $8.5 billion to aid South Africa in decarbonizing its coal-intensive energy supply. On November 4th, 2021, twenty-five countries signed on to the “Statement on International Public Support for the Clean Energy Transition”, which commits to end public financing of overseas oil, gas, and coal projects by the end of 2022. In a related but separate commitment, 190 parties have committed to phase out coal finance domestically and internationally with a “Global Coal to Clean Power Transition Statement”, including major historical coal financiers such as China, Japan Poland, and multilateral financial institutions. And just today (November 10th!), the United States and China unveiled a deal to ramp up cooperation on climate change, by reducing deforestation, cutting methane emissions, and phasing out coal.
At the national level, two huge pledges were recently announced by China and India, currently the world’s first and third largest annual CO2 emitters. Last year at the United Nation’s 75th General Assembly, Xi Jinpeng announced China will hit carbon neutrality by 2060. In a surprise announcement made during COP 26 at Glasgow, Indian Prime Minister Narendra Modi of India announced India’s pledge to hit net-zero emissions by 2070.
Some Western media criticized China and India for having later net-zero targets than the US and EU, who have both pledged to reach the lofty goal by 2050. However, climate scientists largely agree that we should be on pace for net-zero CO2 globally by 2050. The world’s wealthier, industrialized, Western countries have used up more than their fair share of the global carbon budget thus far, and have much larger historical emissions. The US and EU should theoretically (on equity principles) aim to reach net-zero (or net-negative) before 2050, to allow emerging economies more of the remaining carbon budget to develop.
Overall, the new net-zero commitments from the world’s four largest emitters, China, the US, India, and the EU are steps in the right direction. Similarly, commitments to phase out public coal finance by much of the world, preserve our remaining forests, and to begin phasing out fossil fuel finance generally all help move us towards climate stabilization. But where do these pledges and commitments leave us on our collective odyssey to limit global average temperature increase, as enshrined in the Paris Agreement, to 1.5°C?
The updated projections of global average temperature rise
Over the course of COP 26, different modelling groups have released updated projections of how much warming the latest round of updated pledges portend for 2100. Near the start of the conference on November 3rd, the Australian group Climate Resource (CR) released a paper proclaiming “1.9°C New COP26 pledges bring projected warming to below 2°C for the first time in history”. A day later, the International Energy Agency (IEA) released a commentary estimating that climate pledges could limit warming to 1.8°C.
In COP 26’s second week of negotiations, Climate Action Tracker (CAT) published a briefing critical of the pledges thus far, “Glasgow’s 2030 credibility gap: net zero’s lip service to climate action”. They urgently note that there is a “massive gap” at COP 26 on the credibility, action and commitment of the world’s nations to reduce greenhouse gas emissions. Singing a similar tune, researchers with the United Nations Environment Programme (UNEP) published a similar paper: an “Addendum to the Emissions Gap Report 2021”. UNEP’s addendum projects warming into 2100 based on the latest updates to unconditional NDCs and conditional NDCs (so-called because they are dependent on certain conditions being met, like aid in climate finance, or technology transfer for renewable energy). They find that unconditional NDC’s portend ~2.7°C warming, and conditional NDC’s only moderately improve projections to ~2.5°C. Of course, all of these NDC’s, Long-term strategies, and net-zero pledges are contingent upon a couple of things: enacted policy and finance.
Show me the Money
Despite a lot of lofty rhetoric, commitments, net-zero pledges, agreements between global superpowers, and promises to cut methane (or as Greta would have it, blah-blah-blah), COP 26 has yet to put money where it’s mouth is. Most NDC’s, net-zero promises, and other agreements and pledges are not backed by climate policy or climate finance. Climate Resources notes all conditional NDCs need scaled-up climate finance to be implemented. Similarly, Climate Action Tracker strongly states that developed countries must increase climate finance to address the credibility gap, urgently noting that without scaled-up climate finance, “there is no cause for celebration”.
Furthermore, the developed countries of the world (more specifically, Annex 1 countries, generally the world’s wealthiest) have a responsibility to mobilize USD $100 billion/year in climate finance for the world’s developing countries. This $100 billion is intended to help developing countries mitigate their emissions and adapt to climate impacts. At COP 15 in 2009, Parties to the UNFCCC signed the Copenhagen Accord, in which developed countries committed to “a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries.” The annual commitment began in 2013, and the Paris Agreement extended the annual $100 billion mobilization goal to 2025. In order for the world’s developing countries to fulfill their conditional NDCs, this long-promised finance must materialize.
How much has historically been delivered (ICF)
Unfortunately, the world’s developed countries have failed to reach the$100 billion goal for a single year thus far, and have likely failed again in 2020 and 2021. Regular analyses by the OECD, the UN’s Biennial Assessment’s, and Oxfam’s Climate Finance Shadow reports all find that countries have failed to reach the $100 billion annual goal in any year thus far. A recent analysis by my former colleagues Joe Thwaites and Julie Bos of World Resources Institute found that the United States’ efforts have been particularly lagging, as they have been somewhere between $25-$40 billion shy of annual finance they should provide under different fair share approaches (they use four different methods of determining “fair shares”, generally based on historical emission responsibility, ability to pay, gross national income, and the populations of a given country).
Given that many countries NDC’s (recall, their pledged emission reductions by 2030) are conditional upon climate finance and other aid being delivered from developed countries to developing countries, the historical lack of climate finance provided suggests that estimates of future warming based on NDC’s may already be misplaced (as the NDC periods generally include 2020 and 2021). While developed countries have acknowledged they have thus far failed to meet the $100 billion goal, there are no signs they plan to make up for deficits in historical provision of the $100 billion. The difference between what was actually provided and what would’ve been provided in 2013–2019 is approaching $250 billion. It’s unclear if the developed countries will meet the $100 billion goal in 2020, 2021, or any of the other years through 2025, when a new collective climate finance mobilization target is to be established by the UNFCCC.
How much is needed for mitigation (ICF, developing countries)
Of course, the $100 billion goal isn’t strictly for mitigation: a significant portion of the annual delivery of climate finance is supposed to be for adaptation as well. Historically, the vast majority of climate finance has gone to mitigation, leaving adaptation finance woefully underfunded (a story for another time). Unfortunately, even if the world’s developed countries achieved their goal of mobilizing $100 billion annually, and all of it went to mitigation, this wouldn’t even be sufficient to cover the estimated climate finance needs outlined in countries NDCs.
In addition to the developed nations of the world having cumulative emission totals that dwarf those of the Tuvalu’s, Chad’s, Barbados’, Bhutan’s, and Paraguay’s of the world, it’s also true that developing countries have inadequate finances available domestically to mitigate their emissions. As such, the annual $100 billion goal is both a recognition of historical responsibility for emissions, and a structural necessity to enable developing countries to reduce their emissions at a pace sufficient to ‘keep 1.5°C alive.
In 2015, Carbon Brief estimated that developing countries conditional and unconditional NDC’s would require USD $237-$355 billion/year for mitigation and adaptation. A related paper in Science Direct by Zhang & Pan in 2016 put the mitigation need estimate at USD $276.5 billion per year in the year 2030. However, their analysis was based on 64/160 NDC’s that included financial components. Many large countries (Indonesia, Mexico, Argentina, etc.) original NDC’s didn’t have any financial estimates of support needed implying that the calculations of finance needed are actually low-balling mitigation finance required to meet NDCs. A separate paper in 2019 from the South Centre estimated mitigation finance needs from conditional and unconditional NDC’s at $299 billion/year.
For the temperature projections in 2100 under various pledge and net-zero scenarios to come to fruition, countries’ NDCs require climate finance. The developing world needs more climate finance from the developed countries, which have thus far failed to deliver on even the $100 billion goal, itself inadequate to meet their NDC’s as of 2015. While I’m unaware of any published estimates of requisite climate finance for countries newest NDC’s, net-zero pledges, and other emission reduction agreements, it goes without saying that more climate finance is required to meet the Paris Agreement’s temperature goals. Recalling that countries NDC’s, as of when these studies were released, had the world on track for ~3°C warming by 2100, it’s likely that updated NDCs pledging more emission reductions would require even more finance.
How much climate finance is needed in globally
In order to limit warming to 1.5°C, the world’s wealthy countries and highest emitters must also reduce their domestic emissions. For this, modelling estimates of climate finance for mitigation needed globally are helpful. These Estimates of climate finance needed globally vary, but the magnitude is generally the same. The IPCC’s Special report on 1.5°C estimated annual energy investment needs of $2.4 trillion, the IEA estimated annual mitigation costs of $5 trillion/year ($2.7 trillion/year more than annual energy spending in 2016–2020) in their Net Zero Emissions Scenario, One Earth estimated an additional net cost of $1.5 trillion year for 1.5C that included energy, forestry, and redirected fossil fuel investments, and Bloomberg’s New Energy Outlook put the additional annual costs in assorted sectors at $1.4-$4.1 trillion more than what we spend per year today (with an additional $.46-$1.5 trillion/year for renewables relative to historical annual spending) for a more modest 1.75°C in 2100.
From all of these studies, it’s clear that vast spending on the order of trillions annually is required if countries are going to meet their NDC’s, and their collective goal of 1.5°C. Unfortunately, estimates from Climate Policy Initiative put current global climate finance flows in the range of $450-$622 from 2015–2019 (years in which NDC’s were active), far short of what’s needed to limit warming to 1.5°C. As of right now, most countries have yet to provide concrete policies or means of financing their NDC’s and net-zero targets.
Are we actually on pace for 1.8°C? 2.4°C? 2.7°C?
Without a drastic ramp-up of climate policy and climate finance, we are not on pace for the 1.8°C to 2.7°C that recent modelling suggests. While pledges to ramp-down public fossil fuel finance abroad are steps in the right direction, they leave other financial issues unattended. Will there be a ban on *private* or multilateral international finance of fossil fuels? What about fossil fuel companies financing their own production? Will there be adequate finance on the demand side to aid lower-income consumers in switching off of fossil fuel intensive cars, gas burners, water heaters, home heaters, and other ‘personal infrastructure’ (thanks Saul Griffith) that can lock-in fossil fuel dependence for decades? Will the developed countries ever provide adequate finance to meet their obligations — morally and under UNFCCC agreements — to help developing countries reduce their emissions? Finance, without which developing countries will be unable to meet their emission reduction targets?
Perhaps most importantly, as fossil fuels are phased out, will their be sufficient and adequate finance to build-up and build-out renewable energy, electric grids, and electrify ‘personal infrastructure’? Without adequate climate finance to electrify the grid with clean energy, reducing fossil fuel energy supply risks inadequate supply that can cause all sorts of problems as increasingly severe weather strikes, as evidenced early on even in the developing world during drought and wildfires in California, and a Winter storm in Texas. It’s imperative that there is sufficient finance to compensate energy supply lost as fossil fuel use wanes, help protect vulnerable populations, and ensure a just transition within countries and between them.
Without adequate finance, NDCs, net-zero targets in 2050, and various other pledges and commitments will not be met. If the nations of the world at COP 26, and particularly the developed nations, are serious about limiting warming to 1.5°C, they must put their money where their mouths are, and make serious commitments to provide climate finance for mitigation. Otherwise, future generations will look back at COP 26 as the conference of blah blah blah, empty promises, and missed opportunities. In this most vital decade for reducing our emissions, before we blow through our carbon budget for the ‘safe’ target of 1.5°C, it’s time for world leaders to step up to the historical moment, do what is scientifically necessary, and deliver the finance we need to stabilize the climate.
