By Chris Winward
COP26 may not be the 11th hour kick start to global climate action which everyone has anticipated. In fact, it’s looking likely that commitments will fall short of generating the scale and pace of change which is needed.
Why do the outcomes from COP26 matter?
COP26 is the long-awaited event which is supposedly bringing global leaders together to avert catastrophe by making commitments to reduce emissions which will collectively limit global heating to no more than 1.5°C.
When countries signed up to the Paris Agreement, the focus was to reach a carbon neutral world by 2050, with countries increasing climate ambitions every five years. Since then, the 2021 IPCC report highlighted the need for a rapid change to put a radical dent in global emissions, which has shifted conversations towards where the world will be by 2030. Failure to do this and overshooting to a 2°C increase in average global temperature will result in millions of people being affected by heatwaves, climate induced poverty, cities at risk due to sea level rise and collapse of marine ecosystems.
In addition to the emissions reduction commitments from world leaders, COP26 may also provide the stimulus to close policy gaps, remove barriers to rollout of climate solutions and enhance innovation. This is what has the potential to make a real difference to the renewables sector and tip the balance back in the planet’s favour.
What would count as success at COP26 for the renewables sector?
In the UK, the renewables sector is held back by overly cautious policy which limits investment in technological solutions. Niche funds like Prestige, which channel funding to renewable energy projects which actually make a difference, are deemed too high risk by regulators. If COP26 can address the points listed that would result in the removal of barriers for the renewables sector, and the landmark event will be a real success.
1. For each country to develop policies which genuinely support the development of renewable energy systems.
To do this they must offer consistency and be put in place for the medium to long term, as this will provide a line of sight into the future for private investors. Simply announcing £130 trillion is not enough. We already know the private sector is dripping in money which could be used to fund a green transition, the real barrier to progress is the lack of certainty that policy will remain favourable to different types of climate change solution, which prevents money being converted to impactful projects.
2. The announcement of an initiative to enable more collaboration among the finance sector would instigate real change.
There are speciality players like Privilege Finance which already enable the funding of large-scale renewable energy projects. The mainstream banks have been so heavily regulated the since the 2008 financial crisis, it’s resulted in lending being predominantly limited to mortgages and car loans, rather than projects which will make a difference. Enabling more mainstream players like banks to collaborate with the niche specialists could lower the associated risk and drive real change.
3. There must be a balanced approach to replacing all fossil fuels with renewable energy sources.
This must recognise that multiple sources of energy are needed to guarantee a reliable supply. Solar is no good when it is dark. Wind is no use on a still day. Joined up thinking is essential. For example, production of energy from waste provides a solution to waste processing. Anaerobic digestion technology is an existing solution which can take waste and use it to produce biomethane, which can be used in household boilers today, replacing demand for fossil fuel gas.
4. COP26 should encourage green communities which have their own local power generation facilities, no matter where they are in the world. These can take waste and process it to produce energy, reducing road miles and creating a local circular economy and energy security.
Why it’s not looking promising
Ahead of COP26, G20 leaders failed to agree to end the domestic use of coal or commit to key goals to reduce methane emissions. If the leaders of the wealthiest countries in the world are failing to make strong enough commitments, this does not bode well for the negotiations over the final weekend in Glasgow.
Also ahead of the event, the UN’s Emissions Gap report announced that updated Nationally Determined Contributions – the efforts by each country to reduce national emissions – indicate a global emissions reduction of 7.5% by 2030. This falls dismally short of the 55% reduction needed to put the planet on track for limiting global heating to no more than 1.5°C, putting the planet on track for a disastrous 2.7°C temperature increase by the end of the century. Without leaders from Russia or China in attendance, two of the top five GHG emitting countries, this puts a disturbingly large blocker to what can be meaningfully achieved at the event itself.
On top of this, the UK, which is supposedly committed to achieving net zero, has 40 potential new fossil fuel projects in the pipeline and government ministers are meeting with fossil fuel producers roughly nine times more frequently than they meet with renewable energy producers. When will policy makers start converting promises to actions and quit supporting the fossil fuel industry?
The UK in particular does not have a good track record for setting consistent policies which give investors and developers a line of sight into the future. Taking production of biogas in the UK as an example, in the last two years the industry has seen the phasing out of the renewable heat incentive (RHI), the introduction of the green gas support scheme (GGSS) and now further plans have been announced for a biomethane support scheme to replace the GGSS. The flitting from policy to policy can only be a turn off for investors – how are they supposed to conclude that the government supports the sector when future support is so unclear?
When it comes down to it, the real work comes after COP26. To make any tangible difference to global emissions and prevent global temperature rising over 1.5°C, policymakers, all types of businesses need to rapidly embrace change and get on with implementing actions which will reduce emissions quickly. Failure to take full responsibility for the impact of their actions, or failure to act, will be disastrous for our precious planet.