What is COP26?
COPs stands for “Conference of the Parties”, a global climate summit organized by the United Nations with the goal of bringing all the countries together to tackle climate change. This year is the 26th annual summit taking place in Glasgow with the United Kingdom acting as president of the conference and therefore it bears the abbreviation “COP26”.
Why is COP26 getting so much attention?
Extreme weather events linked to climate change that include heatwaves, floods, tsunami, and forest fires have been intensifying worldwide. Climate change has gone from being an uncomfortable low-level issue, to a life-threatening global emergency, in the past three decades. To tackle these challenges and provide a livable future for humanity, governments agree that urgent collective actions are required. COP26 is a critical summit for agreeing and implementing how countries can collectively limit global warming to 1.5 degrees, global emissions by half in 2030 and net-zero emission by 2050.
Historically, COP26 is unique because of COP21 also known as the 2015’s Paris Agreement in which countries at the Paris summit had committed to developing national plans to reduce emissions, and to review and update those pledges every five years, creating aggressive goals. These goals include working together to limit global warming to well below 2 degrees and aim for 1.5 degrees, to adapt to the impacts of a changing climate and to make money available to deliver on these aims. Under the Paris Agreement, countries are to bring forward national plans on their emissions reduction which are also known as Nationally Determined Contributions, or NDCs.
It is estimated that almost 40,000 delegates registered for COP26 in Glasgow, making it the biggest COP in history.
Agenda at COP26
- Secure global net zero and keep 1.5 degrees within range and how the world can reduce emissions by half over the next decade and reach net zero carbon emissions by the middle of this century;
- Mobilize finance in which developed countries will raise at least US$100 billion every year in climate finance to support developing countries;
- Adapt to protect communities and restoration of natural areas (i.e. forests and other critical ecosystems, and helping the world move towards sustainable agriculture and land use) in which countries are encouraged to create a summary of (i) what they are doing to adapt, (ii) the challenges they face and (iii) where they need help; and
- Work together by finalizing rules needed to implement the Paris Agreement which is a significant focus of COP26. COP26 also aims to build consensus on how governments, businesses and people can transform and find alternative ways on how we generate and consume power, grow food, develop infrastructure, and travel around the world.
What COP26 means for businesses?
COP26 will very likely have a great impact on businesses worldwide. Domestic policies will focus on national emissions reduction goals and spending on sustainable projects. The likelihood of removing fossil fuel subsidies may create challenging new dynamics for the oil and gas industry. On the other hand, public policies of advancing renewable energies and the development of carbon markets open new opportunities to both the public and private sectors. Given the domestic nature of these goals, many of the impacts on companies will be felt on a country-by-country basis.
Projects and fund raising (e.g. by way of bonds, stocks, funds) involving renewable energies, energy storage, hydrogen power, sustainable alternative fuels, carbon capture, electrification of transport, green mobility, and energy efficiency enhancement will see rapid growth. Meanwhile sectors involving power and utilities, cement, chemicals, coal, metals, automobiles, airlines and shipping may require transformation in response to global appeals for decarbonization.