COP26: Glasgow Pact Ends With Fossil Fuel Compromise

Contentious climate negotiations in Glasgow ended Saturday with a deal that comes down harder on fossil fuels than before, with first-time references to the need to move away from coal and fossil fuel subsidies — but only after compromises that watered down the final text.

The final text of the Glasgow Climate Pact also includes a framework that could give oil companies and other energy companies more flexibility for meeting climate targets through possible carbon trading, after agreement was finally reached on a relevant clause in the 2015 Paris Agreement.

The nearly two-week-long conference exposed intense divisions on the future of energy, with countries like India, South Africa and Saudi Arabia resisting moves to openly target fossil fuels. This pushback forced negotiators to tone down the final text.

Some of the proposed pact's most significant provisions include:

• Agreement on the need to phase out inefficient fossil fuel subsidies and unabated coal-fired power generation, although the exact language was a last-minute area of contention. India led a last-day push that saw a pledge to "phase out" coal changed to "phase down." This is a nuanced but significant difference since a "phaseout" would mean an eventual elimination or zeroing out. Regardless, many observers warn that the anti-coal push on display at Glasgow foreshadows similar risks for the oil and gas industry in future years.

• Long-awaited rules and guidance under Article 6 of the Paris accord, which allows for "cooperative approaches" to meeting climate targets. Oil companies have long hoped that this will facilitate greater options for compliance, including the ability to buy carbon credits at a low cost or carbon offsets to cover hard-to-decarbonize emissions.

• Fairly bold language that achieving a climate change target of 1.5°C above preindustrial levels would result in "much lower" ramifications for the climate than the 2° target emphasized more heavily at the Paris Agreement five years ago. The Glasgow pact acknowledges a 1.5° target would require "rapid, deep and sustained" greenhouse gas emissions cuts. This would include reducing global carbon dioxide emissions by 45% by 2030 relative to 2010 levels.

The formal text and negotiations are not the only significance of the COP process. Often, the needle is moved significantly around the periphery — and the Glasgow conference was no different.

Many stakeholders reached joint agreements to pursue stronger action on climate risk disclosures, corporate net-zero climate action, decarbonization of auto transport, and advancement of next-generation clean energy technologies such as hydrogen.