At Cop26 in Glasgow hundreds of governments and private institutions joined together in a series of pledges promising ambitious goals on methane reduction, forest protection and the shift of finance away from fossil fuels.
Nearly two years on, Climate Home News looks at how these commitments are holding up to the test of time.
METHANE PLEDGE
WHAT: Reduce human-made methane emissions by 30% between 2020 and 2030. Cutting the amount of methane present in the atmosphere is important because it is a much more powerful greenhouse gas than carbon dioxide despite having a shorter lifespan.
WHO: 104 countries, led by the US and the EU, signed up to the pledge when it was first announced at Cop26 in Glasgow. The number of signatories has since risen to 150. However, they only represent about half of global methane emissions as China, India and Russia – three of the world’s top four emitters – have not joined the coalition.
HOW IT IS GOING: The raw figures paint a fairly grim picture. Since Cop26, the concentration of methane in the atmosphere has kept rising fast and it is now more than two and a half times its pre-industrial level.
Over half of the emissions come from human activities, like fossil fuel extraction, farming and landfills, with the rest caused by natural sources. Under current trajectories, total human-made methane emissions could rise by up to 13% between 2020 and 2030 – the pledge’s timeframe.
This graph shows the globally-averaged, monthly atmospheric methane concentration since 1983. Image credit: NOAA Global Monitoring Laboratory
Targeting the oil and gas sector is seen by many as the easiest and fastest way to bring down emissions in the near term. Experts say existing technologies already provide cheap and effective ways to plug leaky infrastructure like pipelines and gas storage tanks.
However, the technological developments have not yet been converted into real, widespread action. According to the International Energy Agency (IEA), methane emissions from oil and gas remained “stubbornly high” in 2022 even as the energy companies’ bumper profits made actions to reduce them cheaper than ever. “There is just no excuse”, the IEA chief Fatih Birol commented.
Raft of initiatives
But judging the pledge’s progress on current numbers only tells half the story, argued Jonathan Banks, global director of the methane programme at the Clean Air Task Force (CATF). “Emissions are not going to turn around immediately,” he told Climate Home. “If you look at the work going into the pledge, building the funding and technical resources to bring emissions down, I think it could potentially be on track for success”.
A series of initiatives have been set up to help countries deliver on the pledge. The UN’s Climate and Clean Air Coalition (CCAC) is helping over 30 developed and developing countries to establish plans to achieve the 2030 target.
Canada has set out a strategy that it expects to reduce domestic methane emissions by “more than 35%” by 2030, compared to 2020.
Methane leaking from Chelmsford compressor station, UK on 15 October 2021, picked up by a special camera (Photo: Clean Air Task Force/ James Turitto)
The Global Methane Hub (GMH), a philanthropic organisation, is also supporting signatories of the methane pledge with technical assistance and funding. Carolina Urmeneta, a director at the GMH, told Climate Home News that over the last year, the group has focused its work on developing systems to monitor methane emissions rates from oil and gas and landfill installations using satellites.
She said reaching the 2030 target “is possible and cost-effective, but it is not easy. We need to improve data transparency and increase funding for projects with methane targets.”
Regulations drive
Some progress has also been made on the regulatory front. The USA introduced new rules to address methane emissions caused by oil and gas companies through the Inflation Reduction Act. Using a carrot-and-stick approach, it provides $1 billion in public subsidies to take action, while charging a fee for excessive emissions.
In May the European Parliament agreed on tougher measures to tackle methane emissions in the energy sector. The approved text calls for binding emission reduction targets, stronger obligations for fossil fuel operators to detect and repair leaky infrastructure and the application of the same measures to exporting countries outside of the bloc.
While the final rules are still being negotiated with the EU’s national governments, CATF’s Banks believes they could have a “huge global impact” if introduced in their current form. “The methane emissions associated with the gas Europe buys from the rest of the world is quite large, so such measures could really drive some change”.
New announcements are expected at Cop28 in Dubai, after the summit’s president Sultan Al Jaber set the phaseout of methane emissions in oil and gas by 2030 as one of his priorities. “More than 20 oil and gas companies have answered Cop28’s call,” he said this week. “And I see positive momentum as more are joining”. But the UAE has been accused of double standards as it failed to report methane emissions to the UN for a decade, as the Guardian reported.
While it has not signed the pledge, China is expected to announce its long-awaited methane plan at Cop28.
FOREST PLEDGE
WHAT: End and reverse deforestation by 2030. Country leaders pledged to conserve forests, tackle wildfires, facilitate sustainable agriculture, support indigenous populations and “significantly” increase the provision of finance towards achieving those goals.
WHO: More than 140 countries joined the coalition. Signatories of the pledge – including large forest nations like Brazil, Indonesia and the Democratic Republic of Congo – cover around 90% of the world’s forests. But major G20 powers such as India, South Africa, Saudi Arabia and rainforest nations like Bolivia and Venezuela did not join the group.
HOW IT IS GOING: Countries remain off track to reach the goal of the Glasgow pledge and end deforestation by 2030, according to an assessment done by a coalition of NGOs.
Across the world, tree loss recorded in 2022 was 21% higher than the level needed to be on course to reach zero in seven years’ time, the report said.
Source: Forest Declaration Assessment
In fact, the situation is getting worse. Global deforestation grew 4% last year, wiping out 6.6 million hectares of forest, according to the study. That’s a tree-covered area nearly as big as Ireland disappearing in one year.
“The world’s forests are in crisis. All these promises have been made to halt deforestation, to fund forest protection. But the opportunity to make progress is passing us by year after year,” said Erin Matson, a lead author of the Forest Declaration Assessment.
Saving the Three Basins means stopping fossil fuel expansion
There are important regional differences, however. While tropical Asia is faring better, with Indonesia and Malaysia on track to hit their targets, Latin America and the Caribbean are farthest off track.
The election of President Lula da Silva in Brazil has led to a reversal in the skyrocketing deforestation rates in the country, which hosts most of the Amazon rainforets.
But efforts to create a regional forest protection coalition have failed. At the Amazon summit in August, eight South American countries failed to agree on a pledge to end deforestation by 2030 following opposition from Bolivia and Venezuela.
An aerial view shows deforestation near a forest on the border between Amazonia and Cerrado in Nova Xavantina, Mato Grosso state, Brazil in 2021 (REUTERS/Amanda Perobelli)
While it included a larger number of countries, the Cop26 commitment was not entirely new: it repeated promises previously made in the 2014 New York Declaration on Forests, which by then had already failed to achieve some of its core targets.
Keen to avoid the same fate, self-declared “high ambition” countries launched a new initiative designed to deliver the pledge.
“High ambition” efforts
Chaired by the USA and Ghana, the Forest and Climate Leaders’ Partnership (FCLP) has promised to spur global action and provide accountability.
Only a fifth of the original 140 signatories have joined the group so far, with Russia and Indonesia among the most notable absentees.
Christine Dragisic, who leads the forest team at the US State Department, said the goal is to create a “high-level community” that brings together governments, indigenous people, philanthropies, civil society and the private sector to drive action forward and hit the 2030 target.
“Can we do it? Yes. Is it going to be hard? Definitely. Does it require everybody to be at the table? For sure”, Dragisic told Climate Home.
An Indonesian ranger patrols a forest protected through a carbon credit project. Photo: Dita Alangkara/CIFOR
Since its launch last year, the FCLP has worked on a number of initiatives offering technical and financial solutions to forest nations, looking at the role of carbon markets and the forest economy in averting tree loss.
Finance gaps
As with most climate actions, however, it ultimately comes down to the question of money. “The delivery of climate finance is very important to achieve a lot of these targets and that is still very much lacking”, Roselyn Fosuah Adjei, director of climate change at Ghana’s forestry commission and co-chair of the FCLP, told Climate Home.
“The kind of finance we need is not finance for today or tomorrow, it’s finance for yesterday. We are already behind schedule. If it gets delivered fast there’s lots that we can do to close the gap that is now quite wide,” she added.
The Cop26 pledge was accompanied by a commitment from a group of rich nations to provide $12 billion in forest-related climate finance between 2021 and 2025. The money should be channeled to developing countries enacting concrete steps to halt forest loss.
The donor countries reported last year that they had provided $2.6 billion – over a fifth of the target amount – in 2021. They are expected to provide an update at Cop28.
INTERNATIONAL FOSSIL FINANCE PLEDGE
WHAT: End new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances that are consistent with a 1.5°C warming limit and the goals of the Paris Agreement.
WHO: 34 countries and five development banks – predominantly from wealthy cuontries – signed up to the pledge at Cop26. These included the G7 nations – with the exception of Japan – and most EU member states.
HOW IT IS GOING: Among the signatories that give lots of money to the energy sector, the vast majority have introduced policies in line with the promise made in Glasgow.
The United Kingdom, France, Denmark, New Zealand, Canada, Finland and Sweden have stopped providing loans and guarantees for oil and gas extraction and processing overseas through their export credit agencies.
Their actions have shifted at least $5.7 billion per year in public finance out of fossil fuels and into clean energy, according to analysis by Oil Change International and E3G.
On the other hand, however, the USA, Italy and Germany have continued funding international fossil fuel projects in 2023 in breach of the pledge.
They were supposed to stop funding foreign fossil fuels by December 2022. But since then, they collectively approved over $3 billion in financial support to oil and gas overseas programmes.
Most of the funding comes in the form of state-backed guarantees provided by export credit agencies. These products limit the risk taken by companies selling services and goods in other countries, influencing investment.
Among the projects receiving backing from the US and Italy was the expansion of an oil refining facility in Indonesia’s Borneo.
The US Export-Import Bank justified its backing of the project by claiming it would allow Indonesia to reduce its reliance on imported fossil fuels. The Italian agency did not provide a motivation for the decision.
Germany and the US have also poured hundreds of millions of dollars into projects aiming to boost the production and trade of liquified natural gas (LNG), which has been more sought after since Russia invaded Ukraine and Europe cut back on Russian gas.
Political splits and carve-outs
In the US, efforts to comply with the Glasgow pledge have caused a split among senior officials in the Biden administration and in the federal agencies charged with disbursing the money, as Politico revealed.
The White House has drafted guidance underpinning the investments - without making it public -, but the final decisions are made by agencies like the US Export-Import Bank (Exim).
“It is a struggle to get US Exim to comply, so far they’ve ignored the Cop26 commitment”, says Nina Pusic from Oil Change International. “It will require a lot of political weight from the Biden administration and Congress.”
Indonesia delays coal closure plans after finance row with rich nations
Italy looks likely to keep funding fossil fuels overseas for years to come. Its policy guidance lays out a "gradual dismission of public support to new requests of fossil fuel projects", seeing support for gas extraction and production run into 2026. Oil processing and distribution projects should be excluded from the beginning of next year.
But Italy has also carved out a wide range of exceptions that allow its export credit agency to keep greenlighting support for fossil fuel projects on "national energy security" and "energy efficiency" grounds.
The FSRU Toscana LNG regasfication platform off the coast of Italy (Photo: OLT Offshore LNG Toscana)
Germany's main export credit agency has just introduced this month new policies restricting support for fossil fuel projects. However, it allows for financing the development of new gas fields and related transport facilities until 2025 when justified by "national security and in compliance with the Paris Agreement targets".
Investment in new coal, oil and gas production is regarded as incompatible with limiting global warming to 1.5C, according to the International Energy Agency (IEA) and a large number of climate scientists.
"Germany has a vast amount of fossil fuel transactions pending approval", says Oil Change International's Pusic. "The success of the new policy will be judged on the decisions made on those projects".
GLASGOW FINANCIAL ALLIANCE FOR NET ZERO (GFANZ)
WHAT: Commit to achieving net zero emissions by 2050 at the latest by aligning their portfolios and investment practices with the goals of the Paris Agreement.
WHO: Over 650 institutions across the financial sector, including banks, insurers, asset owners, asset managers, financial service providers, and investment consultants. Gfanz members represent 40% of global private financial assets. They are grouped together under eight independent net-zero financial alliances focused on specific branches of finance.
HOW IT IS GOING: It is not easy to gauge the progress of a wide-ranging initiative with loosely defined targets and a constellation of constituent parts.
Above all, the mere fact that the alliance still exists at all is a first - albeit limited - marker of success, after an especially tumultuous year.
The prospect of ending up in legal hot waters in the US, where Republicans have driven an anti-climate investment backlash, has dampened the enthusiasm of many leading signatories. The result is that parts of the alliance have been hemorrhaging members, while other components have resorted to watering down their requirements to assuage concerns.
Mark Carney, former Bank of England governor, launched GFANZ at Cop26. Photo: World Economic Forum/Valeriano Di Domenico
Troubles started brewing in mid-2022 when a group of leading US banks threatened to pull out over fears of being sued because of having decarbonisation policies imposed by external parties. That's after US Republican politicians had accused financial institutions of breaching antitrust rules by grouping together in a climate cartel that limits opportunities for investors.
A month later, in October 2022, Gfanz dropped a key requirement for its members to sign up to the UN Race to Zero initiative - a verification body for corporate and financial sector pledges - which had been seen as a way to prevent greenwashing.
Heading for the door
Those US banks eventually ended up staying in but, despite the less stringent criteria, other influential members began heading for the door in droves soon after.
Vanguard, one of the world's biggest asset managers, quit the Net Zero Asset Managers' initiative - part of Gfanz - saying it wanted to "provide clarity to investors" and "speak independently on matters of importance" to them.
But it's the insurers' coalition, known as NZIA, that has suffered the biggest - nearly fatal - wounds. The group has lost nearly two-thirds of its members since the start of the year, with leading firms like Allianz, Zurich, Munich Re and Lloyd's of London throwing in the towel.
Again a major driver for the mass exit was a letter written in May by 23 Republican attorney generals accusing signatories of advancing "an activists climate agenda" with "serious detrimental effects on the residents" of their states. The spark for this was the alliance's initial obligation to its members to set emission reduction targets by the end of July.
Staring at the real prospect of shutting down, the insurers' alliance again watered down its requirements, becoming effectively toothless.
"NZIA member companies have no obligation to set or publish targets", wrote the UN Environment Programme (Unep) - convener of the initiative - in a clarification letter. "Each company who chooses to be a member of the NZIA unilaterally and independently decides on the steps on its path towards net zero."
Meanwhile, GFANZ says its members have submitted over 300 interim targets "representing clear progress in implementing commitments" to divert finance in line with net zero goals.
But while plans have been announced, many GFANZ members are also being accused of not putting their money where their mouth is. 161 members of the coalition have collectively invested hundreds of billions of dollars into the expansion of the coal, oil and gas industries since they joined the group, according to research by campaigning group Reclaim Finance.
The post Forests, methane, finance: Where are the Cop26 pledges now? appeared first on Climate Home News.
https://www.climatechangenews.com/2023/11/03/forests-methane-finance-where-are-the-cop26-pledges-now/
June Rubis is a steering group committee member for the Cali Fund, from Sarawak in Malaysian Borneo.
At COP16 in Cali, governments made a significant commitment: at least half of the funding from the new Cali Fund should support the self-identified needs of Indigenous Peoples and local communities, including women and youth. It was a watershed moment for multilateral benefit-sharing.
The challenge now is to translate that commitment into access arrangements that recognise the different institutions, priorities and decision-making processes of Indigenous Peoples and local communities.
For generations, biodiversity and traditional Indigenous knowledge have provided significant value to companies who depend on nature’s genetic diversity to discover new drugs that fight diseases, create products that improve health, and grow crops resilient to extreme heat and flooding events. While some compounds are sampled directly from the source country, increasingly the digital blueprints are held in online public databases which are freely accessible to use for innovation and research.
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The Cali Fund was established at COP16 to encourage commercial users of Digital Sequence Information, or DSI, to share benefits arising from its use. Estimates suggest it could generate over $3.5 billion a year – a stark contrast to the modest $10,656 currently committed to the fund from just five SMEs, underlining how much progress must be made at COP17 over the next two weeks.
The COP16 decision that set up the fund offers two routes for money to reach Indigenous Peoples and local communities: through government authorities, and through direct payments to institutions identified by Indigenous Peoples and local communities themselves.
Varied ways of organising
Indigenous Peoples and local communities organise through a wide range of institutions. Some have national or regional organisations experienced in managing international grants. Others work through territorial organisations, customary institutions, community associations, cooperatives or networks. Some have professional finance teams and audited accounts; others have extensive experience governing territories, collective resources or conservation work without having been organised around international funding requirements.
For direct access, some questions are already apparent. Which institutions should be able to receive funds? How should they be identified? What fiduciary standards should apply? How should safeguards and accountability work where institutional capacities differ? What support may be needed where institutions have strong community mandates but less experience with international finance?
Comment: Protecting nature is a public duty, not a Wall Street profit opportunity
If access is designed mainly around institutions that already meet the expectations of large international finance mechanisms, early funding will tend to favour those already familiar to funders. They will gain further experience and become better positioned for future funding, while institutions with less administrative capacity may remain outside the system despite strong community mandates and long histories of stewardship.
These first decisions matter most, because they set the terms for everyone who follows.
The role of intermediaries requires care. Some Indigenous organisations may want a fiscal host to hold and manage funds on their behalf. Communities may choose to work through an NGO they trust. Government-facilitated arrangements may work well in particular national contexts.
What matters is the function an intermediary performs and the authority that comes with it. Providing administrative support is different from deciding which Indigenous organisations qualify, which priorities can receive support, or how success will be assessed. Direct access means communities keep that decision-making authority.
Decision-making power
The COP16 decision refers to institutions that Indigenous Peoples and local communities identify. But authority among Indigenous Peoples does not sit in one kind of body. It may sit with territorial organisations, customary institutions, community associations or combinations of these. Legal recognition and customary authority do not always align neatly.
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An important feature of the Cali Fund’s governance is that Indigenous Peoples and local communities participate as full members of the Steering Committee, rather than as observers. Seven Indigenous Peoples and local community representatives, one from each of the seven socio-cultural regions, participate in consensus-based decision-making alongside representatives of governments and UN entities. Six additional representatives from civil society, scientific institutions and the private sector participate as observers.
That representation carries responsibility. Institutional legitimacy, access and representation take different forms across the seven socio-cultural regions. Indigenous Peoples and local communities members therefore have an important role in bringing those differences into the Fund’s governance and in ensuring that arrangements developed for one context do not become the assumed model for everyone else.
Safeguards and clear responsibilities
COP17 can establish the core principles and direction, while allowing operational pathways to develop in ways that respond to different regional contexts. The decisions countries take in Yerevan will shape how that flexibility is realised in practice.
The choices made around access will influence which institutions are able to participate, which routes become established and which forms of authority are recognised within the funding architecture. The aim should be an architecture with enough structure to maintain confidence while allowing for different forms of Indigenous and community governance.
A credible direct-access pathway will need safeguards, financial oversight and clear responsibilities. This would give the 50% commitment a stronger institutional foundation.
The Cali Fund’s importance will ultimately depend not only on how much funding reaches Indigenous Peoples and local communities, but on whether they are able to determine how the money is accessed, governed and used. This requires access pathways that recognise their institutions, priorities and decision-making processes, rather than requiring them to conform to a single predetermined model.
The post COP17 must settle who decides how Cali Fund money is disbursed appeared first on Climate Home News.
COP17 must settle who decides how Cali Fund money is disbursed
The UK government has approved extraction at the Jackdaw gas field in the North Sea, despite acknowledging that this decision could make it harder for Britain to convince other countries to move away from fossil fuel production.
UK energy secretary Miatta Fahnbulleh approved the drilling on Wednesday after months of high-profile debate, fuelled in part by interventions from US President Donald Trump. She argued that the project would boost energy security in the wake of the Middle East fossil fuel crisis, protect hundreds of jobs and add £2.9 billion ($3.88bn) to the UK economy.
She said Jackdaw’s gas would be cleaner than imported gas and would not prevent the UK from meeting its legally-binding carbon targets and its goal of net zero by 2050. As the field is already licensed, she said extraction was consistent with the Labour Party’s 2024 manifesto promise not to issue any new oil and gas licenses.
The same morning, the government announced a new Energy Wealth Fund to reinvest oil and gas revenues in the climate transition. It will start with £2 billion ($2.67bn) from the government and be topped up over time with tax revenues from offshore oil and gas production.
Climate campaigners in the UK and abroad were quick to condemn the decision, while a leading legal expert told Climate Home News it goes against the advice of the International Court of Justice. Meanwhile, the government’s own documents reveal that it recognises the drilling could damage the UK’s reputation and its ability to push forward the global transition away from fossil fuels.
“Climate leadership” blow
The 92-page decision document says Fahnbulleh “acknowledges that international standing on climate is important and accepts that a decision to grant consent may not further the UK’s international climate leadership.”
It adds: “She acknowledges concerns about the potential implications for the UK’s credibility and influence – including the difficulty inherent in encouraging other states to move away from fossil fuel production while the UK continues, in a limited and transitional way, to draw on its own domestic resources.”
While noting that Jackdaw has not been issued with a new license – just permission to extract gas – the document says Fahnbulleh “accepts this does not fully resolve the underlying tension in the UK’s position” but “considers this alongside the substance of the UK’s wider record [on emissions reduction], which remains significant”.
It continues that she accepts these concerns are “legitimate” and weigh against approving gas extraction, but only gives this argument a “moderate negative weight” set against the benefits of gas production.
“Huge” wrong signal
In international climate talks, the UK has long supported the transition away from fossil fuels and is one of very few major oil and gas producers to ban new licenses. Across the North Sea, the Norwegian government continues to make offshore areas available for oil and gas exploration through annual licensing rounds.
Climate experts and campaigners shared the concern, acknowledged in the decision document, that approving Jackdaw could set a precedent for fossil fuel production elsewhere. Sam Fankhauser, professor of climate change economics at Oxford University, said the direct climate impact of Jackdaw is “much smaller than the debate around it would suggest” but the “wrong signal it sends, however, is huge”.