By Sarah Crowther
|Published 03 November 2021
As the 120 national leaders leave the COP26 stage, the detailed work starts.
Take one look at the official programme for COP26 and you will get a sense of how much work goes on outside the main conference hall. As these detailed negotiations were getting underway yesterday, nations’ leaders were still lining up to make their opening statements, among them Colombia, which threw down a significant challenge to the rest of the world.
President Iván Duque pledged Colombia would protect 30% of its territory for nature by the end of 2022, challenging the rest of the world to follow suit. Many countries, including the UK, have promised to protect at least 30% of their lands and ocean but by 2030. Colombia, known for its unique flora and fauna, has raised the bar.
“Carbon neutral and nature positive are two concepts that must be in the minds and hearts of every citizen,” President Duque told the summit.
Conservation charities rushed to praise the Colombian plan which demonstrates how developing nations can lead the debate in key areas, says Juan Diego Arango, a Partner in DACB’s Bogotá office.
“This is outstanding as it shows how countries in development may have a real interest in making changes and contribute to fighting climate change, although their share of emissions is minimal. This is a reminder of the importance of the industrialised countries in making a real change for the world.
“President Duque also said Colombia will be multiplying by 100 times the capacity from renewable energy. This will need major investments and will definitely be seen as an attractive opportunity for foreign investors that are willing to take part in this transformation.”
Also on stage yesterday was Irish Taoiseach (Prime Minister) Micheál Martin, who highlighted the need for richer countries to support the developing nations with hard cash as well as fine words, says Sharon McCaffrey, a Partner in our Dublin office.
“He emphasised the need for political leaders to take global responsibility. With many commentators carefully watching how the challenge of ensuring support for developing countries will be addressed this week, Mr Martin confirmed his commitment to developing countries most acutely affected by climate change by more than doubling Ireland’s annual climate finance contribution to at least €225m a year by 2025.”
With the 2010 target to contribute US$100bn a year by 2020 to support developing countries in fighting the effects of climate change and transitioning to low carbon having already been missed, developing nations will be pressing other rich countries to dig deeper.
The USA stepped forward to provide leadership on reducing methane emissions, a project insurers will need to look at in detail because it impacts a wide range of sectors.
Methane is one of the most potent greenhouse gases and is responsible for a third of current warming from human activities, and it is on the rise. Now, 103 countries have signed a pledge put forward by President Biden and the EU to cut methane emissions by 30% by 2030. Cattle get a lot of the blame for methane emissions but rice production, rubbish dumps and natural gas are also to blame. Since 2008 there has been a big spike in methane emissions. Scientists believe this is linked to the growth of fracking, where methane is a major by-product. Insurers that have been backing the fracking sector because it was a growth business could find themselves the subject of fresh scrutiny by climate change campaigners as well as seeing a shrinking book of business.
Another plan that has already landed is the Glasgow Breakthroughs, a UK initiative to focus attention on clean technologies. The aim is to give investors certainty that global markets will be created for low-carbon, or even zero-carbon, technologies and to draw in trillions of dollars in private finance for cutting emissions. Institutional investors, including insurers, will be expected to contribute to this. The plan will start with five high carbon-emitting sectors: steel, road transport, agriculture, hydrogen and electricity. Over 40 countries have signed up under all or some of these five headings. The challenge for insurers as these new technologies come on stream will be to provide comprehensive and affordable cover for risks for which they currently have little or no data.
We too will keep our eyes on the detailed sessions as they progress over this fortnight and look forward to seeing the fruits of those discussions. It is these that will give COP26 a true sense of momentum.
Sarah Crowther
Partner
London
