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President Xi Jingping was heavily criticised for not attending the CO26 conference in Glasgow . Now we know that he was negotiating with the U.S.A. throughout the same period and on Wednesday the two counties surprised the world with a climate pact covering :
U.S.-China pact puts huge methane leaks in crosshairs.
The inequality problem with carbon pricing.
U.S. won't probe Asian solar manufacturers.
The U.S. and China's climate pact late on Wednesday changed the dynamics at high-stakes COP26 talks. It was a surprise statement for two powers that have been at odds throughout the meetings and locked for years in geopolitical rivalry.
If the CO₂ goals announced by countries are achieved-"a big if," as they say-the world could halt global heating to 1.8 degrees Celsius above 19th century levels, according to an analysis by the research initiative Climate Action Tracker. The International Energy Agency reached a similar figure.
These estimate came out before the harder-to-quantify but altogether optimistic news out of Glasgow last night. China and the U.S. broke from days of fraught negotiations with an unexpected bilateral pact to boost each country's efforts to cut emissions. Included in the agreement are cooperation on methane, a supercharged greenhouse gas with more than 80 times the warming impact of carbon dioxide, and a promise to update national pledges this decade to meet the most ambitious climate goals.
Analyses of these kind of commitments are the speedometers for international debate. One thing they have in common is a basis in announced, official climate pledges. A few years ago, a small group of investment-minded researchers noted that analyses of formal policies and pledges left open an alternative question: What would global emissions projections look like if they were based on policies that countries haven't publicly embraced yet but are likely to as pressure to act mounts? Thus the Inevitable Policy Response -a project of the UN Principles for Responsible Investment ["I.P.R."]-was born.
The IPR's premise is simple. Climate change will only worsen the weather, and nations will undergo continued pressure to tighten their UN goals, particularly in 2023 to 2025, the so-called ratchet period when pledges are expected to go lower. Investors naturally need visibility into what countries will be doing then. Where will scientific necessity and international policy momentum lead the conversation? Enter IPR, which has developed scenarios that evaluate the impact of climate policies across the spectrum and their aggregate influence on the global emissions problem.
The bottom line of IPR's pre-COP26 update: Emissions by 2050 in 21 economies are projected to fall 80%, which would leave an even chance that global heating stays under 2°C. The changes come from many commonly recognized sectors-transportation and renewable energy-and some under-recognized ones, such as a decline in land-use emissions after a 2030 world peak in meat consumption.
As the final days tick by, an IPR note posted Nov. 1 may become a prescient reminder that the forces impelling debate in Glasgow, Scotland, whatever its outcome, will grow only stronger in the months and years ahead. The COP26 first-draft final statement, released Wednesday, contained several hints of what policy "acceleration" might look like of the sort that the IPR has based its work on since 2018: Nations strengthen their commitments by the end of 2022; a call for a faster phase out of coal burning and fossil-fuel subsidies; and more cash for developing nations. Whether any of these make it anywhere near Glasgow's final statement remains to be seen. It's doubtful.
The IPR is betting however that not only are these ideas not going away, pressure to implement them will grow.
Take the question of rich-nation payments to developing countries. The rich-poor divide has framed UN talks since the 1992 treaty that bore them. Rapid industrialization has complicated the traditional fight between haves and have-nots. While rich countries in the Organization for Economic Cooperation and Development (OECD) bear the most historical responsibility for causing climate change-the U.S. above all-they aren't expected to be the greatest source of future emissions.
With heat waves, floods and sea-level rise upon us, it's comforting to hear that if countries do boost their ambitions in the 2023-2025 period, they can monumentally reduce climate risk. What's tricky is that much of the burden to reach that figure-and the much more difficult limit of 1.5°C-lies on rapidly growing economies with commensurately growing energy demand. China alone is responsible for more than 30% of global emissions . Half of the 10 biggest cumulative CO₂ emitters are developing countries: China (2), Russia (3), Brazil (4), Indonesia (5) and India (7). China may overtake the U.S. by mid-century. That means some of the countries that already need the most aid must carry the greatest weight.
IPR's 1.5°C scenario is the only one granular enough to work as a policy roadmap, the authors say. Earlier this month they ranked 10 policies that would do the most to close the gap between their current forecast of 1.8°C (dependent on policy uptake in the next couple of years) and the safer and extremely difficult 1.5°C policy scenario. These policies include coal phase-outs in China, India and Indonesia; ending deforestation and promoting " nature-based solutions"; emissions-free industries in China, India, the Middle East and North Africa (MENA), and Southeast Asia; all clean power in MENA; and fossil-fueled transportation phase-out in China.
That means the most important question after the U.S.-China agreement is how it translates into action.
Source: Bloomberg
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