The international conference aims to take the next crucial steps in the UN climate change process after last year’s agreement on the implementation guidelines of the Paris Agreement.
- Agenda includes keeping up climate change negotiations
- Preparing the ground for revised ‘Paris’ targets
- Meeting to be held amid populist, protectionist pressures
The stars may not have been aligned as planning got underway for the COP25. It had been due to be held in Brazil, but the venue changed after a new government was elected. Then, Chile had to cancel amid social unrest, leaving it to Spain to host it.
Madrid stepping into the breach has allowed hope for further progress to be revived at a time when multilateralism is being questioned, global climate talks are feeling the threat of rising populism and the US is about to withdraw from the Paris Climate Change Agreement.
To have a COP25, even if the agenda is low-profile compared to that of COP26, is key to keeping up climate change negotiations and preparing the ground for the 2020 UK meeting where countries have committed to presenting revised targets for their national climate action plans (the NDCs). COP25 aims to keep the momentum up and lay the groundwork for more ambitious targets.
We believe these are the five key tasks for countries at the Madrid meeting:
More ambitious targets
In 2020, the European Green Deal will be presented. Europe is close to reaching a consensus on carbon neutrality by 2050 despite the opposition of a few countries. A decision should come at the 12-13 December European Council meeting. This coincides with the end of COP25.
It is almost a given that carbon neutrality will be enshrined into law. But the new objective should translate into a revision of the EU’s 2030 reduction targets for greenhouse gas emissions.
Both China and India in particular are expected to bring their goals closer into line with the global ones. Targets more generally are expected to be raised ahead of COP26 where more ambitious plans are due to ensure the planet’s temperature increase does not surpass the 1.5C-ceiling set in the Paris Agreement.
That meeting will be critical to understanding what governments will be willing to do. The problem is that countries which are prepared to raise their ambitions account for less than 10% of CO2 emissions.
Finish the guidelines to implement the Paris Agreement
Two key issues have not been resolved:
- rules need to be established for carbon markets that provide proper oversight and avoid, for example, double-counting or weakening any efforts to reduce emissions
- setting up a common timeframe: in 2018, countries agreed to have the same timeframe for future climate commitments to be implemented in 2031, but they did not agree on what the length of the implementation period should be. Ideally, they should agree that this runs from 2031 to 2035.
For the developing countries most vulnerable to climate change, getting sufficient financial and technical support is crucial to adapt to the physical risks of climate change. While some countries have doubled their contributions to the agreed Green Climate Fund, much bigger efforts are expected and needed, particularly from the US, Australia and wealthy oil-producing countries.
Link biodiversity and climate change
Thanks partly to the latest IPCC report, we now know clearly that stabilising temperatures without protecting biodiversity is not desirable. A series of political initiatives means that it is now possible to put biodiversity at the heart of the climate discussion (see, for example, France’s push at the G7).
The integration of biodiversity solutions into the climate targets of nation states – the ‘intended nationally determined contributions’ (INDCs) – is one of the main expected results of COP25.
Under the impetus of Chile, COP25 – coined Blue COP – was meant to make it possible to highlight the potential synergies between the ocean and climate action, in terms of both mitigation and adaptation, which have been put on the agenda and confirmed by the scientific community. It is expected that nature-based solutions (terrestrial and marine ecosystems) will gain in relevance and will be recognised in defining a stronger climate ambition.
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Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients.