After months of pre-event hype the 26th globally intergovernmental Conference of Parties (COP26) begins this week with much anticipation and potential skepticism. What can events like this really achieve? COP26 is being billed as the first ‘real economy’ COP, but lets see what that really means.

The World Leaders Summit is the feature for the opening two days. This will see governments speak to their ambitions, some of the key themes I will be looking to see progress on are:

Multilateralism: While the source of global Green House Gasses (GHGs) have clearly define sources, unfortunately once emitted GHGs are borderless. To tackle such an issue demands global governments to act in unison…a tough ask. I do however think we have cause for optimism. The Organisation for Economic Cooperation and Development (OECD) recently concluded a global tax deal which see 130 nations engage in a common global tax practice. Two last hurdles remain, USA Senate approval and agreement on Digital taxation methodologies, if such a deal can be agreed covering over 90% of the worlds population then I think that there is cause for optimism for similar fraternal and sororal cooperation for GHG.
Equitable burden sharing between Developed and Developing economies: For the last century the developed world has delivered an amazing way of life for its members and much of this is thanks to low cost hydrocarbon based energy. The developing world rightly wishes to provide a similar way of life for its people, however to do so with renewable energies is significantly more expensive than the journey previously paved by hydrocarbons. To make matters more challenging many developing nations are located in low lying geographies and are clustered around the equator, meaning they're at greater risk to rising sea levels and soaring temperatures which may see it impossible to grow crops and work outdoors for much of the year. In 2009 developed countries committed to mobilising $100bn in climate finance for developing regions per year by 2020, global governments are behind by c.20% to this commitment.
Carbon pricing frameworks: This years COP host country, the UK, has one of the highest carbon prices in the world. Interestingly the UK has seen their annual emissions drop on a per capita basis from 9 tonnes per person in 2000 to 5.4 tonnes in 2018 (World Bank issued numbers): pricing carbon and charging emitters and users in a consistent manner does seem to changes behaviors. To effect real and rapid change a proper commercial framework is required to price carbon and place this cost on the party who emits or uses the fuel. This framework must work in a consistent and systematic fashion across national border to treat all parties in a fair and equitable manner and also eliminate ‘free loader’ risk. While comprehensive carbon pricing is not a silver bullet, it will likely define the pace of our race to Net Zero. Much work is needed in this area. (Image credit: Chevron Climate Change Resilience Report 2021

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