What is COP26? 

COP26 is the latest in a long line of UN conferences on climate change which have been held annually since 1995 (with the exception of 2020 due to COVID-19). It’s also one of the most crucial – more on that below.

COP stands for ‘Conference of the Parties’. At every COP, leaders and experts from every UN nation (currently numbering 197) come together to hammer out new steps in the fight against worsening climate change. The conference being held in Glasgow from 1-12 November is the 26th COP, hence the name COP26.

Each COP is hosted by a different country, and this year’s is presided over jointly by the UK and Italy. Up to 25,000 leaders, officials, scientists, campaigners and others are expected to attend in Glasgow, making it the largest diplomatic gathering ever hosted by the UK.

The formal negotiations at these conferences are complex, technical, and usually fraught affairs, with countries and factions often clashing over the terms of different agreements. The main aim of this particular summit is for countries to agree stronger plans to cut our collective greenhouse gas emissions between now and 2030 and put the world back on track for avoiding what climate scientists deem to be ‘dangerous’ levels of global warming by the end of the century.

At the end of the conference, there will be a declaration of what was agreed and every country will be asked to ratify the agreement. 

But it’s not all politics. There will be wide range of other events, workshops and exhibitions for the general public in the COP26 ‘Green Zone’, which will be broadcast on YouTube.

Why is this summit so important? 

The stakes and expectations for COP26 are higher than ever before. In order to explain why, it’s worth going over a brief history of what happened at previous summits to understand how we arrived to where we are today

• 1992: At the UN’s ‘Rio Earth Summit’, nations agreed a new treaty in response to increasing concerns about global climate change, named the UN Framework Convention on Climate Change. Signatories to the UNFCCC agreed to meet annually at ‘COPs’, starting in 1995.
• 1997: COP3 in Kyoto saw the first major breakthrough with the ‘Kyoto Protocol’, where 37 developed countries, including the UK but not the US, committed to binding targets to reduce their emissions for the first time.
• 2009: COP15 in Copenhagen was set to be the landmark breakthrough with a stronger agreement signed between many more countries, but it ended in disappointment after negotiations failed.
• 2014: COP20 in Lima saw the world’s two biggest emitters, the US and China, formally commit to reducing their emissions for the first time.
• 2015: COP21 in Paris finally saw the breakthrough the world was hoping for. 197 nations all agreed to set targets and reduce emissions for the first time through the historic ‘Paris Agreement’.

Understanding the Paris Agreement is crucial to understanding why COP26 is so pivotal. In Paris, the global community agreed to:

• Limit global warming to “well below” 2°C, preferably 1.5°C, compared to pre-industrial levels
• Reach a peak in global greenhouse gas emissions as soon as possible to achieve net zero emissions by mid-century
• Bring forward national action plans (called ‘Nationally Determined Contributions’ or NDCs in UN jargon), to be reviewed every five years and strengthened as necessary.

Keeping global warming to just 1.5°C over the course of this century may not sound like much. But remember that this is an annual average global temperature; even the smallest change can have grave consequences. The planet is currently around 1°C warmer than pre-industrial times and we are already seeing severe extreme weather events on an increasingly regular basis as a result.

Unfortunately, we are way off track for achieving 1.5°C, or even 2°C. Experts estimate that the ‘NDCs’ currently in place will collectively lead to a global temperature rise of about 2.7°C, and most countries are failing to keep up with even these commitments. Under scenarios modelled by scientists at the Intergovernmental Panel on Climate Change (IPCC), which advises the UN, 1.5°C is currently likely to be surpassed by 2040.

COP26 is so important because it marks the five-year mark (technically six years now) for formally reviewing and strengthening these action plans for the first time.

What's the UK's role? 

As the history of past UN climate summits shows, getting nearly 200 countries to agree on something is far from a foregone conclusion. The responsibility for leading the way and keeping everyone around the negotiating table falls largely on the hosts.

Former UK Business Secretary, Alok Sharma, is President of COP26 and the man ultimately responsible for it running smoothly. Prime Minister Boris Johnson will also be a key figure.

In the lead up to the summit there has been lot of scrutiny on the UK’s climate leadership. The UK was the first major economy to set a target of net zero emissions by 2050 into law, and is still one of only a small group of nations to do so. Still, the government has been under fire for failing to set out a proper plan for achieving its own NDC – a world-leading commitment to reduce emissions by 78 per cent compared to 1990 levels by 2035. The latest plans only take us a small part of the way there.

As host nation, the UK will want all countries to make strong commitments to follow its lead on net zero, so all eyes are on our leaders to walk the walk as well as talk the talk.  

What are the big items of the agenda? 

The primary goals for COP26 are to keep the target of 1.5°C “alive” by getting all countries to agree on stronger climate measures, and to finalise the technical rules that make it all possible. 

Prime Minister Boris Johnson has also been pushing the slogan ‘Coal, Cars, Cash and Trees’ as key focus areas:

• Coal: Phasing out the use of the dirtiest fossil fuel as a global energy source, in developed nations by 2030 and the developing world by 2040 (the UK is due to close its last coal power plant by 2024).
• Cars: Phasing out the use of the fossil fuel internal combustion engine in vehicles (the UK plans to do this by 2030 for cars, 2035 for vans and 2040 for HGVs).
• Cash: Mobilising $100 billion per year in financial support to help developing nations adapt to and act on climate change (a long-held promise that wealthy countries have so far failed to deliver on).
• Trees: Committing to restore nature and habitat, end deforestation and plant more trees by 2030 than are being cut down.

What are the key sticking points? 

There are a number of political hurdles that need to be overcome if we are to get a good result at COP26.

The chief area of contention is the argument that has plagued COPs since the very beginning: who has the most responsibility to pay for climate action? Developed countries have benefited from over two centuries of unfettered fossil fuel use and generally have a higher per capita carbon footprint. Meanwhile, developing countries suffer disproportionately from the effects of climate change despite not being historically responsible for it.

Developing nations understandably want wealthier countries to foot most of the bill, commit to proportionately stronger targets and provide them with the support they need to adapt and develop cleanly. This is often called ‘climate justice’. They have warned they are willing to block negotiations unless funding pledges are honoured and have already walked out of COPs before because of a lack of ambition shown by wealthy nations. A plan to meet the $100 billion climate finance target is seen as a minimum requirement.

However, there is contention over where the balance lies. Many larger developing countries have hefty carbon footprints of their own, particularly China – which is now the world’s biggest greenhouse gas emitter (although per capita emissions are still lower than in the Western world). Some developed nations, especially the world’s second biggest emitter, the US, have historically been less willing to come to the negotiating table unless China and others bear some more of the burden. The China-US relationship in particular is crucial, and unfortunately the two are not currently on the best of terms.

Other major G20 nations are also in the spotlight for the wrong reasons. Big fossil fuel producers, including Saudi Arabia, Australia and Russia among others, are keen to play down the importance of phasing out fossil fuels in negotiations. Countries linked to heavy deforestation and meat production, such as Brazil and Argentina, also argue strongly against climate scientists’ conclusions that reducing meat consumption is important.

What could a good result look like? 

The Paris Agreement is a tough act to follow. World leaders will have to come to a compromise that keeps everyone happy while still being strong enough to bend the trajectory back towards a 1.5°C pathway.

Given the ‘Coal, Cars, Cash, Trees’ slogan, we can expect significant ground to be made in each of these areas.

The ideal outcome would be an overwhelming consensus to significantly increase near-term action to reduce global emissions between now and 2030. Long-term net zero targets are all well and good, but as most greenhouse gas emissions have a cumulative effect for hundreds of years, action in the here and now is crucial. ‘NDCs’ are likely to be strengthened as a result, although to what extent remains to be seen.

It would be naïve to expect the world to look radically different come 13 November, but we will at least have a much better idea of how radically different it could look over the coming years.

Why should businesses pay attention? 

If the Paris Agreement was anything to go by, businesses should keep a close eye on what happens in Glasgow. Markets quickly felt the impact after Paris and many multinationals announced ambitious goals of their own. The growing corporate ‘net zero agenda’ of today can all be traced back to Paris in 2015.

We can expect a frenzy of business announcements and corporate action plans between now and the end of the year as multinationals seek to capitalise on the collective focus COP26 will bring. These are likely to come from all sorts of industries, from finance to manufacturing. In particular, expect to see a marked increase in ‘science-based targets’, whereby companies set out robust plans that align with the goals of the Paris Agreement.

Both the national and private sector commitments announced at COP26 will ultimately trickle through to every business. Pressure from customers and stakeholders to reduce and disclose emissions in the near-term may begin to accelerate quickly – SMEs that are still unclear on their own carbon footprint, take note.

Meanwhile, plans to increase investment in green and low carbon technologies worldwide will continue to make them more and more affordable for everyone. Providers of green technologies and services may find much bigger sales opportunities overseas as well as at home.

Even in the event of a disappointing outcome in Glasgow, where countries cannot come to an acceptable compromise, it’s still important to pay attention to the potential consequences. For example, a negative outcome could strengthen the case for carbon ‘border adjustments’ in future, which would see a tax on certain goods imported from countries that are failing to take action at a level in keeping with our own. This is something that the EU is already considering.

This is an edited version of a blog first published by GC Business Growth Hub.