Glasgow's Goals

Copyright © 2021 Energy Intelligence Group

With less than six weeks to go ahead of UN climate negotiations in Glasgow, organizers of the conference this week laid out their priorities for the conference, alternating between notes of optimism and urgency. There were, of course, calls for more ambitious nationally determined contribution pledges. But UN officials also focused on specifics.

Eliminating Coal, Eyeing Renewables

Top of the list is addressing greenhouse gas emissions from the power sector, with a heavy focus on coal. “We need countries to consign coal power to history domestically and to stop financing coal power projects abroad,” COP26 President Alok Sharma told the “Climate Week” gathering in New York Monday. Private institutions also have a role to play, he added, and need to phase out coal.

On that front, Chinese President Xi Jinping gave a jolt to the already-growing momentum by announcing at the UN General Assembly on Tuesday that Beijing will no longer finance coal projects abroad. That followed announcements from Japan and South Korea earlier this year to do the same. The three Asian nations have together made up about 95% of foreign coal financing projects since 2013, according to calculations by the World Resources Institute.

The story is less clear at home for China, where officially plans still call for new coal plants in spite of Xi’s pledge earlier this year to start decreasing coal consumption from 2026. That could still change some details on the energy mix targets are still being fleshed out in Chinese ministries and may not land until later this year. After a grim report released in August, UN Secretary-General Antonio Guterres said OECD countries should end coal entirely in 2030, followed by other nations by 2040.

Steering away from coal isn’t the only objective for the power sector, Sharma said. He highlighted the Renewable Energy 100 campaign aimed at garnering pledges from companies to be powered by 100% renewable electricity by 2050. Governments aren’t there yet, but already some are starting to caveat public financing for natural gas. The US Treasury Department recently said Washington would use its outsized weight at multilateral development banks to back phase-outs of upstream oil and gas projects, although it left the door open to some midstream and downstream gas projects. EU ministers delayed the end of financing for gas projects, but Brussels is still moving in that direction. And the UK announced last year it would end all overseas oil and gas funding.

Electric Vehicle Acceleration

While the market for electric vehicles is growing, organizers want to see more pledges to end sales of internal combustion engines. “We need countries and vehicle manufacturers to set dates to end the sale of polluting vehicles,” Sharma said. He is also pushing for companies to sign on to a pledge to use zero-emission vehicles only.

Tackling Markets, Deforestation

Linking countries’ emissions trading systems — as envisioned in Article 6 of the original Paris Agreement remains a priority, but isn’t yet settled. “We cannot keep pushing this from COP to COP,” Patricia Espinosa, the executive secretary of the UN Framework Convention on Climate Change, said Monday. Sharma also underscored the importance of focusing on deforestation, which itself is responsible for emissions. “We need to call time on deforestation. Financial institutions need to have zero deforestation in their portfolios by 2025,” he said.

Rewriting Rules of Finance

Most major banks and corporations including big oil firms have already made their own net-zero targets and started disclosing climate risk. But that hasn’t gone far enough, said Mark Carney, the UN special envoy for climate action and finance. Carney, the founding chair on the Task Force on Climate-Related Financial Disclosures, noted that several countries including the US are beginning to regulate disclosures. “Today virtually the entire financial system wants disclosure [of climate risk],” he said. “The private sector has taken climate reporting about as far as it can. Now is the time to finish the job and make it mandatory.”

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