Could the delay of COP26 impact climate ambitions?
The delay of COP26 also delays the UK’s reintroduction to the world stage as a non-EU member state, writes Alexandra Goodwin. | PA Images
4 min read
Dods Monitoring's Alex Goodwin explores the potential implication for domestic and international climate policy and how the Government can still lead on green measures worldwide, despite the delay to COP26.
Last week the 26th annual international environmental conference of the parties, COP26 was cancelled in light of the Covid-19 pandemic. However, with short-term goals looming, Dods’ Alex Goodwin explores the potential implication for domestic and international climate policy.
What is COP26 and why is it important
The United Nations host a Conference of the Parties (COP) annually, which acts as the key decision maker of the United Nations Framework Convention on Climate Change. The framework acts as an International Environment Treaty, aiming to mitigate global warming and climate change. Since COP21 in Paris, the conventions have orientated around the Paris Agreement to reduce global warming to well below 2°C, and pursue efforts to limit it to 1.5°C.
This year’s COP was to be held in Glasgow, headed up by Alok Sharma – Secretary of State for the Department of Business, Energy and Industrial Strategy – as the convention’s President. Last year’s COP 25 was widely acknowledged to be disappointing, with UN secretary general António Guterres suggesting “the international community lost an important opportunity to show increased ambition”. The target of 1.5°C. was said to be “slipping out of reach”.
A number of matters were punted to 2020, including; reporting requirements for transparency and “common timeframes” for climate pledges. Countries are also due to raise the ambition of their efforts in the form of renewed Determined Contributions (NDCs). However, countries are not necessarily obliged to change their NDCs, and can simply set the same target they did in 2015, as Japan disappointingly did on March 30th. As current NDCs are not enough to keep warming to 1.5°C., and with 2°C targets imperilled by emission projections, this was a key matter to be addressed at COP26.
The bigger picture
The delay of COP26 will in turn likely lead a delay to the UK’s climate ambitions. The government have stated their ambitions have not changed, but as the pandemic continues, market conditions are worsening. The Institute for Fiscal Studies (IfS) recently published commentary on the effects of Covid-19 on emissions trading across the EU, outlining why the emissions trading scheme (EU ETS) remains a vulnerable mechanism. They state the current collapse of EU ETS prices is already steeper than in 2008; “prices have fallen by 30 per cent in the last two months owing to a decline in demand as panicked investors have offloaded holdings in search of safer havens, speculators sold in droves to hedge their options positions, and some polluters dumped permits to raise cash”.
Price stability of permits at a high enough level is an essential driver of fuel switching in the EU, such as the transition from coal to environmentally friendly gas forms. However, whilst market reforms were introduced to prevent a sustained fall in permit prices after the 2008 financial crash, it remains to be seen whether these are agile enough to deal with Covid-19.
Additionally, the delay of COP26 also delays the UK’s reintroduction to the world stage as a non-EU member state. The UK will no longer be part of the ETS, and the Government has yet to make clear its final position on carbon pricing outside of the EU. Under a no deal scenario, the UK would leave the ETS and the Government would have to put in place plans for a Carbon Emissions Tax, following in the footsteps of Scandinavian nations. COP26 would have been the perfect opportunity to see work begin on the development of an internationally harmonised framework for emissions trading before the end of the transition period.
Solutions to the delay
Whilst the delay will be tumultuous for global climate policy in the short term, there are interim measures that can taken. The International Energy Agency (IEA) have opined that support to resuscitate the economy after the pandemic should, and more importantly can, promote environmental protection. Dr Fatij Birol at the IEA stated that the need to reverse climate change by the end of the decade has not disappeared in light of Covid-19. With a post-pandemic “Marshall Plan” anticipated, Birol urges that economic stimulus be an opportunity to implement “a secure and sustainable energy future”, resulting in, “the twin benefits of stimulating economies and accelerating clean energy transitions”.
In light of this, the Government still has the opportunity to lead on green measures worldwide, despite COP26’s delay. Intertwining climate policy into immediate measures and ensuring that short term net zero goals aren’t side-lined would send a powerful message to leaders globally.
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