How to make COP26 climate summit a success

There are two tipping points in the climate crisis. The first will come if the climate spirals out of control; the second if humanity takes decisive action to stop the planet frying before then. As the world prepares for November's United Nations climate summit "COP26", we are getting closer to both tipping points.

The last six years are the hottest on record, according to the World Meteorological Organization, a UN agency. Polar ice caps and glaciers are melting at alarming rates, and there have been wildfires in California, Australia and elsewhere.

On the other hand, humanity is ramping up its action to fight the threat. Joe Biden has pledged that America will reach net zero carbon emissions by 2050. China has promised to get there before 2060. Meanwhile, the European Union and the United Kingdom, which is chairing the climate talks, have upped their shorter-term targets for reducing emissions.

Low-carbon technology is also advancing in leaps and bounds. As a result, the annual cost of getting to net zero is now $1 trillion less than it was a year ago, according to Goldman Sachs. Meanwhile, investors are deserting fossil fuels and pushing down the cost of capital for renewable energy.

Mind The Gap

The last big UN climate conference, which led to the Paris Agreement in 2015, pledged to limit the global temperature rise to 1.5 degrees Celsius to 2 degrees Celsius above pre-industrial levels by the end of the century. To achieve that, carbon emissions need by 2030 to drop between a quarter and a half from where they are now. The snag is they will still be at roughly today's levels under current policies, according to the UN Environment Programme.

One problem is that, while countries accounting for 63% of emissions have now committed to net zero targets, India and most of Africa haven't. If they try to pull hundreds of millions out of poverty with carbon-fuelled growth, there's no way to stop the planet frying.

Another is that the net zero targets are decades away, while the shorter-term targets are not tough enough. Take China's announcement that by 2030 it will cut the carbon intensity of its economy by at least 65% from 2005 levels. If its economy grows 5% annually, emissions could still rise 15% by the end of the decade, according to Lauri Myllyvirta, an analyst at the Centre for Research on Energy and Clean Air.

Yet another problem is that setting a target isn't the same as hitting it. No major country has a fully joined-up action plan.

Six Actions

So what can realistically be done to make sure the planet doesn't lose its race against time? Here are six "stretch" actions.

1. Climate Club

America, the EU, Japan and the UK collectively have a lot of clout. If they set the pace at the climate talks, they may be able to drag the rest of the world with them. If they can get China to join a "climate club", the chances of success will be even better.

However, they all need to set good examples by making more ambitious pledges themselves. After all, these countries have polluted the most in the past and so have the greatest responsibility to solve the problem.

The good news is that countries are likely to ratchet up their pledges over the coming year, according to Michael Jacobs, who advised various governments in the run-up to the Paris Agreement. Among other things, pressure from civil society activists, such as Greta Thunberg, will encourage them to up their game.

2. Bigger Carrots And Sticks

Under the Paris Agreement, rich countries promised to give $100 billion a year by 2020 to poorer countries to help them transition to a low-carbon economy. Even if they hit the target – in 2018 they provided $79 billion, according to the Organisation for Economic Co-operation and Development – that is still only 0.07% of global GDP.

Richer countries need to provide much more help – not just with cash but also with clean technology so poorer nations can grow without spewing out carbon. This wouldn't just be fair. It would increase the chance of moving fast, says Luke Murphy, head of the Environmental Justice Commission at the IPPR, a UK think tank.

More generous carrots would also justify the use of bigger sticks on those countries that don't come into line. The most important are "border carbon adjustments", of the sort planned by the EU, under which tariffs would be applied on carbon-intensive imports.

3. Consumption Targets

Countries' pledges measure how much carbon they produce at home. But if they import carbon-intensive goods and services from abroad, they aren't solving the planetary problem. The amount of carbon that a country consumes is the real measure of its climate impact.

Look at the UK's seemingly impressive pledge to cut emissions by 68% by 2030 compared to 1990 levels. The snag is that its carbon consumption is about 50% higher than its production, according to the UK's Climate Change Committee.

Countries should set carbon consumption as well as production targets. What's more, to hit them, richer people will need to curb their consumption of the most polluting products, such as air travel. Again, there's an issue of fairness: the world's richest 1% consume twice as much carbon as the combined share of the poorest 50%, according to Oxfam. One way of cutting their consumption would be via "frequent flyer levies", under which people pay higher taxes the more they fly.

4. Better Offsets

Another solution is to empower consumers by telling them the carbon content of what they buy, just as they can determine what to eat based on its calorie content. They may then put pressure on companies to reduce carbon in their value chains – or to offset their emissions, say by funding reforestation programmes.

There is progress on both fronts. Good data on the carbon content of a product should be available in three years, according to Michele Della Vigna, Goldman's commodity equity business unit leader in Europe, the Middle East and Africa.

Meanwhile, Mark Carney, former Bank of England governor and UN special envoy for climate finance, is trying to create a new exchange-traded offset market. This could answer concerns about "greenwashing", shunting money to carbon sequestration projects that would have happened anyway.

5. Green Deals

There's a lot of rhetoric about "green new deals" to rebuild economies post-Covid. The idea is to invest in clean infrastructure, home insulation and embryonic but vital technologies such as capturing and storing emitted carbon and deploying renewable energy to create "green hydrogen", which can be used to replace hydrocarbons. This would kill two birds with one stone – creating millions of jobs and building a low-carbon economy.

So far there is not much action. But once Biden arrives in the Oval Office and European leaders tear themselves away from fighting the pandemic day by day, green deals may become a reality.

6. Fast Follow-Up

Whatever is agreed at COP26, it will be essential to keep up the pace. Waiting several more years for a big summit won't be good enough. A more muscular approach with rapid reviews will be needed to ensure that words are followed by deeds.

- Hugo Dixon is a journalist, entrepreneur and political campaigner. He was Breakingviews' first editor-in-chief and before that ran the Financial Times' Lex Column. He also founded InFacts, a journalistic enterprise which until December 2019 was making the case against Brexit.