COP26 Week One Round Up: major announcements on nature and climate

COP26 Week One Round Up: major announcements on nature and climate
There has been a flurry of pledges and major funding announcements on nature during the first week of COP26.

The first week of COP26 saw a blizzard of announcements, with a particular focus on forests and agriculture.

The World Leaders Summit at the start of the week saw the announcement of the Glasgow Leaders Forest Declaration – 133 countries (and counting) have committed to halt and reverse deforestation and land degradation by 2030, with the backing of major forested countries including Brazil, Colombia, Indonesia and Democratic Republic of the Congo, accounting for >90% of the world’s forests.

These commitments will, at least in theory, be enabled by funding from both the public and private sectors totalling approximately $19 billion, including:

  • 12 countries committed to provide US $12 billion of public finance from 2021 – 2025, as part of a new Global Forest Finance Pledge.
  • UK, Norway, Germany, USA, and the Netherlands, in partnership with 17 private funders committed to investing US $1.7 billion to support Indigenous and local communities’ land tenure and resource rights in recognition of the role they play in climate change mitigation and protecting biodiversity. This represents the biggest financial commitment ever made to help Indigenous and local communities protect tropical forests. The pledge includes a particular focus on strengthening land tenure systems and rights, providing important acknowledgment of the forest and nature stewardship role of Indigenous Peoples and local communities (IPLCs). The collective pledge of new funds will run from 2021 to 2025 and calls on all donors to significantly increase their support of its agenda directed at improving capacity building and securing IPLC land rights. In the statement, the rise in threats and violence against IPLCs is noted.
  • 11 donor countries and the Bezos Earth Fund launched a Joint Statement on supporting the Congo Basin forests supported by an initial pledge of at least $1.5 billion. The Bezos Earth Fund also announced $2 billion to support land conservation and the transformation of food systems. This comes after the US$1 billion pledged in September in conservation grants to protect and conserve nature and Indigenous peoples and cultures in the Congo Basin, the Andes, and the tropical Pacific Ocean.
  • The LEAF Coalition (Lowering Emissions by Accelerating Forest Finance) announced $1 billion from its three government participants (UK, Norway and US) and nearly 20 corporate participants to stop deforestation, and protect tropical and sub-tropical forests.  The Coalition also announced new signatories of the first Letters of Intent (LOIs) with Emergent (a non-profit acting as the transaction intermediary for the Coalition), including Costa Rica, Ecuador, Ghana, Nepal, and Vietnam. Emergent acts as the transaction intermediary for the Coalition, signaling interest in reducing deforestation and receiving payments.
  • 8 financial institutions and agribusiness companies have announced a commitment worth $3 billion – with more than $200 million in disbursements by 2022 – to soy and cattle production that is free of deforestation and land conversion in South America. The Innovative Finance for the Amazon, Cerrado and Chaco (IFACC) initiative’s goal is to reach $10 billion of commitments and $1 billion in disbursements by 2025. The companies include Green Fund, AGRI3, DuAgro, Grupo Gaia, JGP Asset Management, Syngenta, Sustainable Investment Management and VERT.

In addition, nine multilateral development banks – including the World Bank – issued a joint statement that commits them to mainstream nature in their investments and in policy dialogue with countries. The Task Force for Climate-Related Disclosures will also strengthen guidance around reporting on emissions from agriculture, forestry and land-use sector.  An organization founded by HRH the Prince of Wales  to boost private investment in natural capital – The Sustainable Markets Initiative’s Natural Capital Investment Alliance (NCIA) – announced 12 new members and plans to mobilise $10 billion in private capital by the end of 2022.

President Biden, meanwhile, has pledged to work with Congress to set aside $9 billion to conserve and restore forests, including support for the Plan to Conserve Global Forests: Critical Carbon Sinks. The United States also launched two new entities: the Forest Investor Club and the Forest Finance Risk Consortium (FFRC). The Investor club of leading public and private financial institutions and other investors aims to unlock and scale up investments to increase investment in restoration, conservation, sustainable agriculture and forestry, and green infrastructure. The Consortium will bring together financial institutions and experts in forest monitoring and climate finance disclosure to better assess and disclose exposure to forest-related emissions in investment portfolios.

Finance Day on Nov 3rd saw the release of the Finance Sector Roadmap for Eliminating Commodity-Driven Deforestation, developed by Accountability Framework initiative (AFi) coalition member Global Canopy with Conservation International and other partners in the Finance & Deforestation Advisory Group. The Roadmap guides financial institutions on how to implement commitments such as the ones announced at COP; providing high-level guidance along a clear timeline for action to enable financial institutions to contribute to tackling deforestation, conversion, and associated human rights abuses and to eliminate them from their portfolios by 2025, or within four years of beginning the Roadmap.

Energy Day on Nov 4th focused on moving away from fossil fuels, including a host of commitments by a coalition on 195 members to phase out coal power and/or end support for new coal power plants, through a range of measures: A new ‘Global Coal to Clean Power Transition Statement’, signed by 77 countries and non-state actors and the EU. 28 new members, including major banks accounting for over $17 trillion in assets, plus non-financial institutions, signed up to the Powering Past Coal Alliance (PPCA), bringing the total to 165 members. The US, Canada, China, Japan, Korea and the G20 commit to end international coal financing by the end of 2021. The UK launched a joint statement for international support for the clean energy transition, with 26 signatories that will move $17.8bn of public finance a year from fossil fuels to clean energy investment. The UK also coordinated the launch of the International Just Transition Declaration, with 14 countries and the EU becoming signatories.

Youth and Empowerment Day on Nov 5th saw increased support for and mobilisation of youth on nature and education. The UK Department for Education’s Sustainability and Climate Change Strategy was launched, which included teacher support for improving climate and sustainability education, such as a new Primary Science Model Curriculum with emphasis on nature and the recognition of species, and a a National Education Nature Park created by increasing biodiversity across nurseries, schools and colleges.

Nature Day on Nov 6th saw 45 Governments representing 75% of global trade in key commodities that threaten forests (e.g. soya, palm oil and cocoa) sign up to a new Forests, Agriculture and Commodity Trade (FACT) Statement, committing to a common set of actions to deliver sustainable trade and reduce pressure on forests, including support for smallholder farmers and improving the transparency of supply chains. Led by the UK, the governments pledged urgent action and investment to protect nature and shift to more sustainable ways of farming.

The pledge includes leveraging new public sector investment of over US$4bn billion into agricultural innovation, including developing climate-resilient crops and regenerative solutions to improve soil health, and ensuring the affordability and accessibility of these resources for hundreds of millions of farmers. Sixteen countries will launch a “Policy Action Agenda” and more than 160 stakeholders will join a “Global Agenda for Innovation in Agriculture” to lead the way on the global transition towards climate resilient agriculture and food systems to more sustainable ways of farming. In the UK 95 high profile companies from a range of sectors also committed to being ‘Nature Positive’, agreeing to work towards halting and reversing the decline of nature by 2030. The pledgers include large energy and water companies as well as the UK’s major supermarkets. The UK also launched a new £500 million package to help protect five million hectares of rainforests from deforestation. The funding will create thousands of green jobs, including in sustainable agriculture and forestry, throughout rainforest regions and generate £1bn of green private sector investment to tackle climate change around the world.  There was also further youth action, with members from the Global Biodiversity Youth Network, Youth4Nature, and YOUNGO presenting the official Global Youth Position Statement on NbS to decision-makers and policy-makers.

Though these commitments are welcome, the big challenge now will be ensuring all this new finance gets to the very best projects on the ground, in other words to those that meet the four guidelines for successful, sustainable nature-based solutions.

Even if these pledges are honoured and finance flows to where it is needed most, the goal of the Paris Agreement to keep warming to 1.5 degrees can only be achieved if carbon emissions are slashed in tandem. India’s commitment to get 50% of its energy from renewable resources by 2030 and the Global Methane pledge, amongst others, are therefore particularly welcome and important.

  • The US and the EU have announced a global partnership in the Global Methane Pledge, an initiative to reduce global methane emissions by 2030, limiting methane emissions by 30% compared with 2020 levels. A total of over 100 countries representing 70% of the global economy and nearly half of anthropogenic methane emissions have now signed onto the pledge.
  • The European Commission has also announced the Catalyst Programme with Bill Gates and Werner Hoyer, joining forces with Breakthrough Energy Catalyst and with the European Investment Bank. With an initial $1 billion mobilised from public, private, and philanthropic sources, the programme will scale up critical green technologies and create markets for them.
  • The governments of the UK, USA, South Africa, France, Germany, and the EU, have announced a new Just Energy Transition Partnership to accelerate the decarbonisation of South Africa’s economy, with a focus on the electricity system, to help it achieve the ambitious goals set out in its updated NDC emissions goals. The Partnership will initially mobilise $8.5 billion for the first phase of financing, through various mechanisms including grants, concessional loans and investments and risk sharing instruments, including to mobilise the private sector.

The variety of announcements made during the first week of COP26 show what is possible when the 197 nations and territories signed up to the climate change Framework Convention work together. However, these pledges must be honoured to make an impact, and to show a real change from previous failed commitments such as the New York Declaration on Forests in 2014. What is promising at this COP is the extent of corporate engagement, as well as new regulations such as the Task Force on Climate-related Financial Disclosures (TCFD) and Taskforce on Nature-related Financial Disclosures (TNFD). Unfortunately, too much is being made of the finding by the International Energy Agency (IEA) that new pledges indicate we are now on track for around 2 °C of warming (down from an estimated 2.7°C warming under governments’ climate pledges and mitigation measures ahead of COP26, as calculated in the Emissions Gap report 2021). We must be cautious; much more ambition is urgently needed.  Moreover, as has been seen in previous climate summits, well-publicized pledges are not a guarantee of success and must be backed up with solid, scrutable actions to address the causes and impacts of climate change whilst supporting biodiversity and sustainable development.

The flurry of announcements must not distract from the actual business of COP: the negotiations, with much work ahead this week on technical issues relating to the Paris Agreement. These include the rules on how carbon markets work (Article 6), on the need for transparent reporting, and for common time frames on plans to cut emissions, with many pushing for more regular reporting on ambition. Some progress has been reported on these issues, but there are still large differences among the parties.

Although separate from the main business of COP26, i.e. the negotiations, these announcements signal global recognition of the interconnectedness of climate change, biodiversity loss, and food systems. This week the real work begins to anchor this recognition in the negotiations, including the cover text. With fewer major announcements expected from the Presidency, the focus will be on implementation, in particular on ensuring finance for climate and nature reaches communities in lower-income countries to enable a just transition to net-zero (for example with the support of the Taskforce on Access to Climate Finance) and to be nature-positive.

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