With COP26 about to begin in Glasgow, SEI researchers have identified seven priorities.

1. Creating a credible and equitable pathway to global netzero emissions

To keep global warming below 1.5°C, global emissions must reach the net-zero target by 2050. A key priority for COP26 is putting the world on a credible net-zero pathway.

As of June, 56 parties representing 67 countries and over half of global emissions have communicated net-zero targets, with more potentially forthcoming. Meanwhile, the “Race to Zero ” campaign is helping to mobilize a coalition of “net-zero” initiatives for non-state and subnational actors.

SEI’s Derik Broekhoff sees net zero as an important benchmark for climate ambition and in principle welcomes the raft of new net-zero commitments as progress.

“At the same time, it is important that the attention on individual net-zero targets does not distract from the real prize: getting to global net zero. As steps are taken to refine and implement these targets, care is needed to ensure that individual actions align with an equitable and climate-safe collective outcome, reflecting the principle of common but differentiated responsibilities.”

— Derik Broekhoff, SEI US

2. Narrowing the production gap

Countries also need to consider how their commitment to net zero aligns with their broader climate and energy planning. The 2021 Production Gap Report shows that countries are on track to produce more than double the fossil fuels than is consistent with limiting global temperature warming to 1.5°C. This underscores that major producers are not yet explicitly recognizing or planning for the rapid reduction in fossil fuel production that their emissions reduction targets require. Ensuring better reporting on fossil fuel production and support from both governments and companies is an important step for addressing the production gap.

Governments need to acknowledge and fix this discrepancy. The report outlines taking several steps they can take towards a just and equitable wind-down of fossil fuel production. For instance, governments should increase transparency, report on their fossil fuel production plans and support, ensure fuller disclosure by fossil fuel companies and chart production pathways consistent with Paris Agreement temperature limits.

“Governments can also restrict fossil fuel exploration and extraction to avoid locking in levels of fossil fuel supply that are inconsistent with climate goals: Denmark and Costa Rica are launching a new alliance to do just this. Governments should accelerate the phase out subsidies and end public finance for fossil fuel projects, as a new alliance-building initiative is seeking to do, and redirect support towards decarbonization and just transitions efforts.”

— Michael Lazarus, SEI US Centre

The recent launch of a new alliance, led by Denmark and Costa Rica, with the goal of phasing down global oil and gas production, is a promising step. Another signal of progress would be countries joining a UK and European Investment Bank initiative to build an alliance to end international support for fossil fuel projects.

3. Meeting financial promises

Climate finance boils down to a matter of trust. At the Copenhagen COP in 2009, developed countries pledged to mobilize $100 billion per year to support developing countries in lowering carbon emissions and adapting to climate impacts. However, a recent OECD report indicated that the $100 billion pledge is short by $20 billion. Even these numbers are controversial.

“The absence of details on how each country intends to contribute to the pledged amount creates confusion on how and whether these finance pledges are in fact as 'new and additional' to development assistance as the Paris Agreement says they should be. There are no uniform accounting methodologies to assess private finance flows that the $100 billion target includes.”

— Nabil Haque, SEI Asia

The UK COP26 Presidency has sought to allay concerns by publishing a “delivery plan ” for meeting the the $100 billion goal. However, the plan acknowledges that the goal has been missed and will likely not be met before 2023.

There have been hopeful signs in that the US has committed to doubling its public climate finance to $11.4 million per year by 2024 and the EU is also contributing an additional $4 billion by 2027. These contributions are likely not enough to assure developing countries, particularly the most vulnerable nations, that their needs and concerns are being taken seriously.

That is also because climate finance is far from striking a balance between mitigation and adaptation. The Paris Agreement ‘s Article 9.4 calls for this balance and UN Secretary General António Guterres himself has repeatedly stressed that finance for climate adaptation should get at least half of all climate finance, in order to meet the needs of developing countries.

Recent SEI work on adaptation finance for Africa shows that only about one-third of climate finance went to adaptation from 2014–2018, with nearly two-thirds of going towards mitigation.

4. Putting a stronger focus on loss and damage

Poor and vulnerable countries and communities that are least responsible for climate change face the majority of its negative impacts: both extreme weather events, such as hurricanes, and slow-onset processes, such as sea-level rise. These impacts that cannot (or have not) been avoided through mitigation or adaptation are referred to as “loss and damage” in UN climate talks, and are already a reality .

Finance for loss and damage is therefore a key theme at COP26 and a new SEI report looks at what ways exist to advance loss and damage finance within the existing constraints of UN climate talks without closing off more equitable long-term solutions.

“While parties' diverging interests make it look unlikely that formal negotiations address loss and damage, individual countries could use the COP26 platform to begin to pledge financial support for loss and damages that is needs-based and goes beyond the $100 billion already committed for mitigation and adaptation. Steps should be taken for the longer-term provision of loss-and-damage finance.”

— Zoha Shawoo, SEI US

5. Clarifying the global adaptation goal

Countries at COP26 will continue their deliberations on how to interpret the global goal on adaptation established by the Paris Agreement. They must find a way to assess collective progress towards that goal as part of the global stocktake in 2023. Its current formulation – enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change – is vague and must be more concrete and measurable.

Progress to date has been slow. Alok Sharma, incoming President for COP26, suggested that countries may agree on establishing a programme of work to define a framework for assessing progress.

“The article of the Paris Agreement that established the global goal on adaptation also recognized adaptation as a global challenge. This means not only that adaptation is a priority for all countries, but also that it requires a global response. There is a growing recognition that in an interconnected world, many climate risks flow across borders. The transboundary nature of climate risk – and responses to manage and reduce the risk – must be considered as part of the global stocktake and in national adaptation planning.”

— Richard Klein, SEI HQ

6. Agreeing on environmentally sound rules for carbon markets

Glasgow will be the third attempt to reach agreement on Article 6, one of a handful of outstanding issues of the “Paris Rulebook”.  Article 6 covers mechanisms for carbon markets. On such markets, countries can trade emissions to help achieve their targets on reducing emissions.

Countries have so far failed to agree rules for these carbon markets. Clear rules are necessary to avoid what is known as “double counting“, meaning that the same emissions reduction gets counted towards more than one mitigation target.

“On Article 6, we need an agreement, full stop. It is essential to have a foundation for robust international cooperation going forward – cooperation that will be needed to deliver on the Paris Agreement's climate goals. At the same time, the Article 6 rulebook needs to provide a solid foundation, with a consistent and robust set of standards on international accounting and guardrails to ensure that market mechanisms will raise ambition and support adaptation – not undermine them.”

— Derik Broekhoff, SEI US

7. Making climate negotiations equitable and inclusive

The Covid-19 pandemic stalled climate negotiations. Originally scheduled for late 2020, COP26 was postponed by a year. With safety protocols now in place, the prospect of bringing more than 20 000 people from more than 190 countries to Glasgow raises logistical challenges .

What is more, equity challenges abound – as evidenced by travel restrictions for certain delegates, vaccine inequities between wealthier and poorer countries and the public health challenges associated with an in-person global event of this magnitude. As a result, this worldwide event is less accessible than others, with fewer opportunities for the voices of the most vulnerable to be heard.

In the face of these challenges, a key priority for the COP hosts will be to ensure that COP26 creates the space and opportunities for the voices of the most vulnerable and civil society to be heard.