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E3G’s COP26 live tracker

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Welcome to E3G’s COP26 live tracker, providing the latest news from Glasgow. Join us for the latest updates and analysis of the climate negotiations by our experts.

Saturday 13 November – 7pm

Countries have agreed the Glasgow Climate Pact at COP26, a deal that offers a political lifeline for accelerating action to keep temperature rise below 1.5C and respond to rising climate impacts.

Decisions on revisiting 2030 emissions targets and efforts to phase down coal power and phase out fossil fuel subsidies, open the door to accelerating action in the next 12 months. The political fireworks over the coal and fossil fuel language on the floor of the plenary show the vital role of coal in climate action.  

A huge gap remains to get onto a path to limit warming to 1.5C. However, outside the formal COP process, groups of countries committed to phasing out fossil finance, cutting emissions from coal, methane and deforestation and unlocking trillions of dollars of finance launched the acceleration.  How countries establish new cooperation to deliver more short-term action over the next 12 months will be the real test of success at Glasgow.  

Decisions on doubling adaptation finance and setting up a body to assist help for countries most impacted by climate change represent some progress but much more is needed. While COP26 failed to offer dedicated finance for loss and damage, vulnerable countries agreed to compromise on the understanding that more help will be coming soon, including on loss & damage finance.  

The next 12 months must see countries deliver on this package with more finance and a diplomatic process to unlock it, higher emissions targets & implementation of the ambitious pledges made in Glasgow.   

Read our full press release

Saturday 13 November – 9am

🌍 As we wait for the delayed stocktaking plenary to begin, E3G’s climate diplomacy experts share what we’ll be watching on the third draft of the COP26 cover decision texts 👀

🏃‍♀️ The key mitigation accelerator and adaptation finance doubling decisions have stayed thanks to sustained public pressure. With rumours circulating that China is still unsure on the decision in para 29 on coming back on 2030 ambition and that the US is unsure about wording on adaptation finance doubling, will they move on these issues to live up to the fanfare they claimed over their US-China climate deal?

📑 The new draft maintained a paragraph recognizing the need to phase out coal power generation and fossil fuel subsidies. This is a long-overdue step forward. The inclusion of new language on ‘the need for support towards a Just Transition’ is positive. But several countries in yesterday’s plenary called for the word “inefficient” to be scrapped from the call on fossil fuel subsidies – will we see them step up for higher ambition again?

💵 Most change was on loss & damage with a decision to fund the “Santiago Network” to provide technical assistance to countries on dealing with loss and damage, and a 2-year dialogue proposed to discuss how to mobilise finance to deal with losses and damages. It’s clear that with mounting impacts the politics of loss & damage have changed. But without a timeline for decision making on finance for loss and damage vulnerable countries and civil society will be watching interventions for proposals that could land the balance needed for a comprehensive deal.

In reaction to the new COP26 draft cover decision, Alex Scott, Climate Diplomacy Lead at E3G said

“The new version of the text kept the key decisions on coming back with more ambitious 2030 targets and on doubling adaptation finance. Clearly no country wants to be seen to block an ambitious Glasgow deal. The public will be watching closely whether ministers are willing to take these decisions on accelerating action on climate change. But the mitigation accelerator and doubling of adaptation finance are the baselines for a credible COP26 outcome. There’s not yet a credible answer on the need for support for countries to deal with loss and damage and this will need to be resolved over the next hours to get to a deal.”

Friday 12 November – COP26 draft text – E3G reaction

The new COP26 draft text is out and E3G’s diplomacy trackers have pulled together some of the key takeaways.

Top takeaways

  1. Key para on accelerating mitigation ambition is strengthened – 29 in CMA text requests Parties to come back with more ambition by 2022.
  2. More balance than earlier in the week between mitigation & adaptation (deadline for doubling adaptation finance & work programme on global adaptation goal) and loss and damage (workshop on finance sources, technical assistance facility), so scope is there to aim for a high ambition outcome.
  3. But it’s unlikely to be enough to build confidence that the necessary finance will be made available so key parties (EU, US) will need to bring more to seal a deal.
  4. Text will breach many countries’ red lines requiring them to go back to capitals for new instructions. It’s now Leaders who need to do heavy lifting.
  5. Leaders really have to decide if they want to keep 1.5C alive now. They can’t duck the questions posed in the text or blame the UNFCCC process. It’s countries that must decide how much climate risk they will take.

Mitigation accelerator

Getting Parties to come back with more ambition on their 2030 emissions cuts – stays. The political pressure hooks in annual ministerial roundtables and synthesis reports on how close the collective NDCs get us to closing the gap to the 45% emissions cuts need by 2030 (on 2010 levels) for a 1.5C pathway. The gap between current NDCs and this scientific reality is clearly articulated in the text.

The key changes are switching out the word “urges” for “requests” parties to bring back more ambitious 2030 NDCs. While the twitter debate continues on the relative merits of these terms, our take is that they both rely on political peer pressure to force action. In this case the more operational verb to the acceleration decision that mirrors the Paris Agreement language giving it a political precedent strengthens the credibility of the decision. The improved balance to the overall text also gives it more credibility both in the ongoing negotiations and for the overall outcome.

Finance

The language around the existing climate finance goal of mobilising $100bn annually 2020-2025 has some added humility with “deep” regret that the goal has not yet been met. Paragraph 27 of the COP text “urges” developed countries to “fully deliver” on the $100bn goal “urgently and through to 2025”. We’ll be closely tracking reactions to this language.

The finance section contains a recognition of the need to significantly increase the offer of climate finance drawing on the spectrum of public and private sources, recognizing $100bn as a floor. It also contains a doubling of global adaptation finance by 2025 over “current” levels.

But the current draft could more clearly reflect the crucial role of Multilateral Development Banks (incl in leveraging private finance) for advancing the clean energy transition – effectively de-linked from the high-level attention given in the leaders’ segment on mobilising private investments at scale (“shifting the trillions”). Instead, it calls for a focus on the mobilisation potential of adaptation. However, unlike mitigation investments, investments in adaptation don’t have the same capacity to deliver revenue and largely require public funding.

This sets the tone for the IMF to ensure that the Resilience and Sustainability Trust (RST) delivers, and maintains the assumption that the resources from SDRs will be there. It is now on the IMF to take heed of what their members needs are. This is also builds on the G20’s request for the IMF to consider climate vulnerabilities rather than just income levels.

Adaptation

Adaptation doubling now has a 2025 timeframe which was not in the last draft so this is a step forward.

Loss and Damage

Additions include a secretariat for the Santiago Network on Loss & Damage (L&D), a Technical Assistance (TA) facility under the Santiago Network which will provide financial support for TA on L&D and a paragraph that urges parties to provide funds for the facility as well as a workshop under the Subsidiary Bodies on Implementation to examine ways in which the provision and efficiency of finance to avert, minimise and address loss and damage can be enhanced.

Overall, the additions would be an important step forward in terms of setting up the Santiago network and offering vulnerable countries support for accessing finance. But the new facility would not mobilise the billions in new finance needed to meet the scale of climate risk.

The Subsidiary Body for Implementation workshop on L&D finance is also welcome, but there must be a stronger political process for landing finance options next year.

On Coal

The scope of draft paragraph 36 calling for an acceleration of coal phase out has changed from a general reference to coal to more specifically coal power generation. This reflects the state of progress made in other fora such as G7 and G20 which have focused on decarbonisation of the power sector.

Coal use in industrial sectors such as steel and cement is increasingly under pressure. Alternative technologies and fuels are actively under development and at COP26 governments have agreed to prioritise public procurement of low-carbon production.

The latest COP26 draft language includes language on phasing out ‘unabated’ coal power. This is in line with previous international agreements and regulatory approaches at national level, increasing the chances that it may be maintained in the final text. During 2021 all three of G7, G20, and OECD have agreed to end overseas public finance for unabated coal power generation, as have China, Japan, and South Korea.

‘Unabated’ is a regulatory definition that has been used by governments to end the construction of new coal power plants without carbon capture and storage (CCS) and accelerate the retirement of existing coal power plants.

By requiring real world emissions reductions, it calls the bluff of the coal industry that only likes the idea of CCS in theory but not in practice. A regulatory requirement that restricts ‘unabated coal power’ operates as a de facto ban unless utility companies or the coal industry pays for CCS. The experience of the past 15 years is that they haven’t, and they won’t.

E3G published an explainer on ‘unabated coal’ earlier in 2021 (see tweet below).

                                      

 

Thursday 11 November – E3G’s rundown of the state of play

What now?

 

If the EU won’t lead now and build the high ambition coalition we need, no one else will. There is an immediate opportunity for the EU to leverage the political momentum from week 1 and the US-China statement to build the confidence that the trillions will be mobilised for developing and vulnerable countries for the net zero and climate resilient transformation we need.    

Last night

 

Heads of Delegation (HODs) meetings took place. Countries shared what elements they like (or don’t), with the positions as expected – Brazil, Saudi and Australia against mitigation ratchet, vulnerable countries calling not just for more balance on adaptation, loss & damage and $100bn, but much more on mobilising the trillions through the whole global financial architecture.  

Delayed

 

We had expected a new draft text from the UK presidency early this morning that tries to reflect what country HODs talked about. It’s delayed until late tonight or early tomorrow. This might be because the UK Presidency is still waiting to see how the US-China statement from yesterday will influence the negotiations and because key technical issues that will play a prominent role in the political outcome such as finance are still being discussed.  

Tomorrow morning

 

At 11am, Alok Sharma will convene all ministers to discuss to the latest version of the text. That marks the start of the last stretch of COP, where we’ll see intense diplomacy and deal making as ministers thrash out the final text.  

What needs to happen?

 

On Adaptation and Loss and Damage, Alex Scott, E3G’s lead on climate diplomacy said:

“To get out of Glasgow before Sunday, we’ll need champions to push for the next iteration of the cover texts to strengthen the mitigation ratchet and carry the balance needed. The US needs to step up and stop playing games on adaptation finance and loss & damage, and the EU needs to champion finance.”

On the importance of finance in the negotiations, Iskander Erzini Venoit, Policy Advisor at E3G said:

“Securing a package to ‘Keep 1.5 Alive’ requires a common understanding that developed countries are moving in a serious way to mobilize the trillions needed by developing countries. We won’t be able to get out of Glasgow without a balanced text, where developed countries commit to meaningful processes on mobilising finance and means of implementation, on an equal footing with mandated processes around mitigation, with a serious effort to reform the international financial architecture.”

 

 

Wednesday 10 November – glimpse of a Glasgow package

                      

Responding to the COP26 draft text of Decision

 

  • The draft text is starting to reflect the highest ambition of what is being put forward in the rooms – but there’s a clear disconnect to the urgent messages and calls to action by leaders at the beginning of COP26. 
  • In this draft text there are timelines and political hooks for revising emissions reduction ambition as soon as 2022, and throughout the 2020s to “keep 1.5 alive”. It strongly acknowledges the gap in action and what the science tells us needs to be done to close it. But it’s not yet as strong as the political direction given by leaders. And it’s not yet bringing accountability to the political pledges. It’s also imbalanced, with political ambition still lacking on adaptation, mitigation and finance.It’s not yet enough to land the public confidence that COP26 has accelerated climate action. 
  • This shows that country negotiators haven’t been bringing the political ambition of their leaders into the negotiating rooms in consultations on this draft cover decision. We’ve particularly not seen EU and US political leaders, or negotiators step up to push for the strong accountability hooks we need, or for the financial support that they know they need to deliver for vulnerable countries to bring balance to the package.
  • The question now is whether countries want to take the political fight to water this down and take things out or build up the balance and bring things in. It will go to leaders.
  • On finance and solidarity, leaders have a chance to bring things in not just into this COP decision text, but in delivering commitments alongside it at the COP26 stage.

Responding to the COP26 draft text of Decision,

Alex Scott, E3G Climate Diplomacy and Geopolitics lead said:  

It’s important to acknowledge upfront that there are timelines and political hooks for coming back on 2030 ambition in there. But they don’t yet match the political ambition of leaders in the start of COP26 and it’s completely imbalanced with what’s being offered at the moment as adaptation, loss and damage, and finance which shows that that ambition isn’t coming through in the room. We need the EU and US to step up.  

Jennifer Tollmann, Senior Policy Advisor at E3G said: 

“This is not yet a text that meets the calls of either World leaders or citizens to keep 1.5C in reach. The next 48 hours will decide whether ministers work together to drastically increase ambition across the board, or give a win to Russia, Saudi Arabia and Brazil and lose any clear signals that all countries will have to come back with more ambition this decade. 

“EU ministers are make or break here – not the least because they are leading critical consultations – but this will require them to lead the way by getting behind a broader acceleration package that includes concrete actions and finance for adaptation and loss and damage.” 

Taylor Dimsdale, Program Director of Risk and Resilience at E3G said:  

“Protection and support for vulnerable countries in the face of climate impacts is a clear benchmark for success for Glasgow. That means balance between adaptation and mitigation, along with more resources including finance for loss and damage. It’s not too late to deliver but you can’t call the current draft balanced.  

 

“Asking developed countries to double their collective adaptation finance is a good start but it needs a deadline. More encouraging is the language calling for financial institutions to explore how vulnerability can be reflected in access to concessional finance; that could be hugely significant for vulnerable countries.  

 

“It calls on pretty much every government and institution under the sun to scale up support – including finance – for Loss and Damage but doesn’t offer anything concrete on mechanisms to deliver that money.” 

Iskander Erzini Venoit, Policy Advisor at E3G said 

“The proposed texts provide a foundation which must be built up, not watered down, particularly in terms of finance – for mitigation, adaptation and loss and damage – if we are to come out of Glasgow with a package to “keep 1.5 alive” and respond to the urgent financial needs of developing countries and vulnerable communities.” 

                         

 

With COP26 approaching the final days, pressure is running high on countries to find agreements on the outstanding issues to bring home a “Glasgow Package” that keeps 1.5 alive.

But the EU and US seem to be missing from the high ambition game – the EU announced it had agreed it could join the High Ambition Coalition statement but we yet to see an *official* signature. Timmermans, Kerry and teams aren’t raising the bar for a new 2030 mitigation ambition accelerator, or the finance package needed to balance it either in the rooms or in the hallways.

                 

 

The UK Presidency circulated a first draft of its ‘cover decision text’, where the main political COP26 outcome will reside, late last night. E3G experts will be looking closely at the text and will provide you with their analysis through Twitter spaces this morning – so register now to set a reminder.

A stocktaking plenary on the draft cover text will take place today, Wednesay 10th. Parties are expected to provide their comments throughout the day for the Presidency to provide an updated draft as soon as possible. We expect a second iteration could follow late in the evening.  

By then, the UK also hopes to be nearing completion on the rest of the final negotiations, on issues like Article 6 and common timeframes. To many negotiators, that’s *very ambitious*. For instance, transparency negotiations remain stuck and need ministers to talk and find compromises. That means it likely becomes a key part of the overall political package – so it’ll likely go down to the wire.

Germany joining the pledge to stop international public fossil fuel finance by the end of 2022 injects a little more sense of acceleration. It brings the total number to $22 billion a year – 1/3 of G20 public finance for fossil fuels.

 

But the G7 will need to bring a serious finance package to the table to motivate some coordinated diplomacy from the High Ambition Coalition of developed and developing countries. The EU’s announcement of an additional €100 million for the Adaptation Fund is a welcome contribution but they’ll need to package up support through their global infrastructure investment platforms, what they’re offering through SDR reallocation, and what they’ll leverage through multilateral development banks and development finance institutions.

                                

                            

Tuesday 9 November – negotiations ramp up

Today, ministerial consultations are ramping up, and there are a lot of them. Country ministers have taken on the tricky political issues from negotiators to shepherd them through to a potential solution.  

Ministers will need to rapidly start building bridges on issues of finance, transparency, Article 6, adaptation, and loss and damage, if an outcome that responds to the urgency expressed by leaders is to be collectively agreed. 

Countries will also be discussing their reactions to the presidency’s draft cover text elements ahead of the resumption of consultations Wednesday. 

We’re also watching how the EU responds to fresh critique of their absence from the high ambition politics at COP. See more from E3G’s Jenny Tollmann:  

                                  

                      

Monday 8 November – Adaptation, Loss & Damage 

Adaptation and Loss and Damage Day saw increased momentum, on various fronts, including on finance, locally-led approaches, civil society pressure as well as diplomatic coalitions of countries calling for a balance between adaptation and mitigation.

Loss and damage was a big focus for civil society. Members of the Climate Action Network, which represents the Environmental NGOs observer constituency under the UNFCCC, sported masks in red and other colours calling for finance for loss and damage.

Notable momentum on adaptation finance included in particular significantly overachieving the target asked by the adaptation fund, and considerable contributions to the LDC fund. All new adaptation finance pledges still amassed to less than a billion, though. While still far below the amount needed it is still a step in the right direction. 

                             

The Champions Group on Adaptation, aiming for balance between mitigation and adaptation finance, gained new momentum. Italy, Australia, New Zealand and the Africa Development Bank joined the group, while other members stepped up their financial contributions. 

                                   

More than 70 countries have endorsed the Principles for Locally Led Adaptation and mobilised more than $450m for initiatives and programmes to promote locally-led approaches.

However, despite the announcements and new momentum today, much more is required to achieve the aim of doubling adaptation finance and to achieve a balance between mitigation and adaptation. Read more here from E3G’s Taylor Dimsdale.

Adaptation and loss & damage outcomes

The UK Presidency ‘non-paper’ on the elements of the final COP ‘Cover Text’ (the home of the major political decisions to make in Glasgow) has placeholders for many key asks of civil society and vulnerable countries. These include a technical plan to formalise the global goal on adaptation, scaling adaptation finance, operationalising the Santiago Network on Loss & Damage, and scaling “resources” (as opposed to “finance”) for loss and damage.  

Today the Presidency will be putting the pressure on other countries to step up to a goal on adaptation finance and in plenary this morning AOSIS called for at least a doubling of adaptation finance. Getting the final decisions agreed is looking trickier with Saudi Arabia hinting at using stalling tactics on the adaptation items to avoid ambitious decisions on keeping 1.5C alive. 

On the whole, week one ended with some political momentum behind a “Glasgow package” that keeps 1.5 alive.  

As week two begins, negotiators are re-joined by their ministers who take up consultations on resolving the tricky political issues left in the mandated negotiating agenda (on the Paris rulebook and Article 6) as well as the “decisions” Parties are seeking to land in the “Cover Text” of the final agreement at the end of the COP. This “Cover Text” is where the new processes and political hooks for ‘keeping 1.5 alive’ would land.  

Last week several groups put out their visions of the text. Read them here:

                            

                               

                            

How COP26 can sucessfully address Adaptation, Loss & Damage

 

Good morning from the E3G team at COP26 for Adaptation and Loss & Damage Day at COP26.

  • For COP26 to be a success, we must see a big step forward from major economies in their support for vulnerable countries. The Paris Agreement put adaptation on par with mitigation and raised loss & damage as a serious issue to be dealt with by UN summits.  
  • But the imbalance has remained and been stark so far at COP26. Glitzy sector decarbonisation deals have contrasted with small and disparate adaptation finance pledges.  
  • We expect more small announcements today and will be watching the Adaptation Finance Champions Group of donor countries for some serious championship.  
  • Watch 18:00-19:00GMT @ The Resilience Hub OR livestream here. 

 Sindra Sharma takes stock of the historical lack of funding for Loss & Damage, and what is needed for progress at COP26, in the thead below:

                                 

 

Friday 5 November – Week 1 outcomes

E3G rounds up a week of announcements and speeches

 

We now move from the high tempo week one, into the lower tempo negotiations crunch point. Negotiators must bring together high-level political signals from the World Leaders’ Summit into a concrete set of options that ministers will have to decide upon at the end of next week.

Today and over the weekend, discussions aound countries’ views on the ‘COP cover decisions’ (the outcomes countries can agree on to keep 1.5C alive) will begin in earnest.

Negotiations are closed for countries only, but we’re seeing first glimpses of what a ‘Glasgow Package’ could look like. One of the first to outline their vision was the High Ambition Coalition (HAC) – the alliance that delivered the Paris Agreement. Their declaration, signed by developed and climate vulnerable countries including the US, calls on countries to:

  1. Back a doubling of adaptation finance and scale up ‘resources’ for loss and damage.
  2. Enhance 2030 climate targets in line with 1.5C before COP27.
  3. Set mid-century net zero targets in line with 1.5C by 2023.
  4. Deliver the $100bn in climate finance every year through 2025.

The clock is ticking to address a packed agenda of negotiations. Delivery will require resolution of thorny, technical issues that have stymied COP talks for years on carbon markets, transparency rules and a packed finance agenda. Slow progress has been made so far. If the volume of tricky issues cannot be dealt with in a timely fashion, talks on a ‘Glasgow Package’ like the HAC outlined will be difficult.

Looking ahead to Week 2 – UK Presidency outlines the path to closing the Summit  

 

Alok Sharma has written to countries with his plan to steer the negotiations towards a close. He is aiming to finish the talks on time next Friday. A rundown of how he hopes next week will unfold:

  • Saturday: Closing the first week’s technical negotiations & taking stock of counties views on the overall outcome.
  • Monday to Wednesday: Ministers take on the remaining that negotiators could not agree to resolve.
  • Thursday to Friday: Ministers and negotiators bring the individual negotiated items into a final ‘Glasgow package’.

 

                           

                            

                             

Good morning from the E3G team at COP26! We have an extensive team of experts on the ground, watching the politics closely to track how a final deal can be done. To request briefings, commentary, or interviews on how week one of the COP has gone so far, and what we need to see going forwards, call our press number on +44 (0) 7783 787 863 or email press@e3g.org.

                               

 

Thursday 4 November – Energy Day

E3G untangles Energy Day: COP26 makes significant steps forwards in consigning coal to history

 

  • A rather messy combination of Energy Day announcements at COP26 caused confusion, but reflect the realities of real time diplomacy.
  • Major coal countries (Incl South Korea, Indonesia, Viet Nam) respond to global trends and political engagement with new commitments to phase out coal power generation and / or end new coal construction.
  • A ‘Global Coal to Clean Power Transition Statement’ signed by 46 countries covers more operating coal capacity (267GW) than the US (232.8GW) or India (233.1GW).
  • 28 new members (7 countries) of the Powering Past Coal Alliance mean almost two-thirds of OECD & EU governments are now PPCA members.
  • A Statement on International Public Support for the Clean Energy Transition was signed by over 20 countries, including big historic fossil fuel funders US, Italy, and Canada, expanding the exclusion of coal finance overseas to oil and gas.
  • The multiplicity of different overlapping statements and announcements shouldn’t distract attention from significant new commitments which represent major progress towards consigning coal to history.

Read our takeaways in full here.

                                     

                                  

                                  

EU & China signal points of agreement for defining green investment – but leave door open for fossil fuels

  • The EU and China have today at COP26 set out the extent to which their visions for defining green investment are aligned.
  • The announcement was made at a side event of the International Platform on Sustainable Finance (IPSF). This coalition consists of 18 countries representing 55% of greenhouse gas emissions, 50% of the world population and 55% of global GDP.
  • The publication of the EU-China ‘Common Ground Taxonomy’ coincides with EU internal discussions about whether to define natural gas and nuclear power as ‘green’ investments. Such a course of action would be seen by many as being in direct conflict with the Paris Agreement.

Read about the Common Ground Taxonomy here.

                                     

                                    

Tsvetelina Kuzmanova, Policy Advisor, EU Sustainable Finance, at E3G, said:

“Yesterday at COP26 the World Bank said that green investment taxonomies around the world should apply to both private and public finance. A new common ground taxonomy, supported by a large number of countries and initiated by the EU and China, clearly demonstrates the global efforts and cooperation towards defining green investments. The EU taxonomy is the market standard and must continue to be guided by science if global investments are to be aligned with climate safety.”

Kate Levick, Associate Director, Sustainable Finance, at E3G, said:

“A common approach to green investment between the EU and China ought to have been a breakthrough moment of celebration. It is inexplicable that during COP26 the European Member States are simultaneously undermining this hard-won diplomatic achievement by openly discussing adjusting the taxonomy in a way that is not compliant with their obligations under the Paris Agreement.”

Sima Kammourieh, Senior Policy Advisor, Sustainable Finance, at E3G, said:

“The key jurisdiction not yet involved in this important international dialogue is the United States. We were pleased to note that IPSF work on disclosure has now been extended to cover US developments. We call on the US to become a full member of the IPSF coalition.”

Byford Tsang, Senior Policy Advisor, at E3G, said:

“This is a much-needed attempt by two of the world’s largest emitters to align the rules of the road for the global transition to net zero. It shows that the EU and China can work together on global issues such as climate, despite their differences in other areas. The common ground taxonomy also lays a solid foundation for the G20 Sustainable Finance Working Group to drive great comparability in sustainable finance standards globally.”

 

 

Over 20 countries pledge to end overseas fossil fuel finance, shifting over $15bn from fossil fuels to clean energy by end of 2022.

 

The statement, ‘Aligning International Public Finance With the Clean Energy Transition’, is the first time a broad group of countries have agreed on the need to shift overseas finance away from all fossil fuels, financial institutions and instruments and towards clean energy.

Half of the signatories are developing and least developed economies, underscoring the importance of the transition from fossil fuels to clean energy in the context of economic development.

Read more on this annoucement here.

Lisa Fischer, Programme Leader, Climate Neutral Energy Systems said:

This statement is a powerful signal to policy makers and investors alike that high climate and investment risks are an inherent part of oil and gas finance, and that no investment in new oil and gas supply is necessary. It shows growing confidence that employment and revenue opportunities are strongest in the clean energy sector. Every cent of public finance in energy overseas should be used to opening these opportunities for nations across the globe.

Maria Pastukhova, Senior Policy Advisor at E3G said: 

A just energy transition on the scale and at pace needed to keep the global economy growth aligned with 1.5C goal requires a massive shift of international energy finance to readily existing clean energy solutions, and a focus on the emerging markets and developing economies. Public finance needs to kick-start the shift in these countries with a high cost of debt and largely lacking incentives for private investors. Today’s statement is a historic breakthrough.

Iskander Erzini Vernoit, Policy Advisor at E3G said:  

Today’s announcement represents a major reorientation that has taken place in international public finance in recent years. More work is now necessary to bring all financial actors together around recognition of the risks of fossil fuel investments. Now is the time for developed country governments to lead a historic global investment drive into clean energy as part of the COVID recovery. 

 

E3G’s energy experts are following the annoucements at Energy Day today.

 

Follow them here:

 

Wednesday 3 November – Finance Day

Key takeaways from Finance Day
  • It was always expected that today, Finance Day, would largely see private sector announcements on how they plan to get to net zero. We did not expect new commitments of public finance.
  • But at a US, EU and UK event yesterday, leaders showed they want to coordinate around key principles. We also saw Italy calling for a taskforce to better mobilise Multilateral Development Banks to get more money for green infrastructure in poorer countries.
  • This afternoon, US Treasury Secretary Yellen urged each Multinational Development Bank to come up with concrete plans to raise climate ambition and identify specific ways to mobilise the private sector. This is the first time the US Treasury has come to the COP, demonstrating that climate change is not just an energy and environmental issue. It is now considered an economic, financial and development issue.
  • A big focus of today was private sector net zero commitments under the Glasgow Financial Alliance for Net Zero (GFANZ) which now counts financial institutions responsible for $130 trillion in assets. This has been hailed as a turning point for the financial sector, but many have noted the risk of greenwashing – continued fossil finance from the financial sector which jeopardises the Paris Agreement,
  • The Chancellor Rishi Sunak has committed to align UK finance with net zero. He stopped short of compelling alignment by firms, but has announced the UK will oblige firms to disclose transition plans for aligning with net zero.  

 

                                  

                               

 

UK commits to world’s first net zero finance centre

In a speech on COP26 Finance Day, the UK Chancellor, Rishi Sunak, will commit to transforming the UK into the world’s first net zero finance centre. Read E3G’s reaction in full here.

  1. Government will create the world’s first net zero finance centre in the UK.
  2. $130 Trillion in Private Finance now committed to net zero under the Glasgow Financial Alliance for Net Zero.
  3. The Chancellor will announce a mandatory requirement for financial institutions and listed companies to report on net zero transition plans.

Heather McKay, Policy Advisor at E3G, said:

“The Chancellor’s speech has put the spring back into my step at COP26 – with a welcome affirmation of his commitment to creating the world’s first net-zero financial centre. This is critical if we are going to rewire the financial system to prevent climate breakdown. I hope that other countries follow suit.”

Kate Levick, Associate Director Sustainable Finance of E3G said:

“This is a major step forward. To be in line with the science and 1.5C, financial regulators will have a crucial role to play in enforcing these transition plans to ensure they are credible.”

Read more about how the UK Government can establish a net zero financial centre in our new briefing.

                    

 

US, EU & UK discuss ‘new paradigm’ for infrastructure finance

Heading into Finance Day, the US, EU and UK announced key principles for global green infrastructure investment. This includes a new paradigm of climate finance, spanning both public and private sources, to mobilize the trillions needed to meet net-zero by 2050 and keep 1.5 degrees within reach. The political stage is set for big changes in global clean infrastructure financing. 

Limited access to finance is a real blocker for bringing clean energy to scale in developing markets. COP26 World Leaders Summit statements from Barbados and Italy shifted the COP dialogue on mobilising the trillions of dollars of public and private money needed to keep 1.5C alive.

G7 leaders now need to turn these announcements into clear signals about where funding will come from to shift the deadlock on climate ambition at COP26. This does not require huge commitments of new public funds but rather a political agreement on how the bilateral and international financial institutions in which countries are shareholders can ensure a massive scale-up of high-quality investment for a green and inclusive global recovery in the developing world. 

Julian Havers, Programme Leader of Public Banks at E3G

Yesterday at COP26, US, the EU and UK leaders announced “a new paradigm” for infrastructure finance to mobilize the trillions needed to keep 1.5C within reach. New approaches to sharing risks between government and the private sector can be effective, but they need developing country buy-in and ownership. All voices need to be brought to the table so that this can power a political outcome at COP26.

Nick Mabey, E3G Chief Executive and co-founder said:

COP26 needs extraordinary political leadership to keep 1.5C within reach. By agreeing new principles for mobilising trillions of finance into country net zero plans the US, EU & U.K. have begun to build the foundations for the level of change the world needs.

Dileimy Orozco, E3G Macroeconomic expert said:  

Yesterday it was clear that there is consensus that harnessing the power of both public and private sector will be key to deliver the finance needed. Leaders were clear that for this to happen, a new partnership is needed. One where recipient countries are partners, where the private sector buys-in, and where finance delivers for both climate and development. A net zero transition cannot be just, in an increasingly unequal world. 

Ronan Palmer, Director Clean Economy said:

Draghi’s forum could be a vital base for holding governments and the private sector to account for delivery and outcomes. The world is tired of pledges without delivery.

 

 

Indonesia confirms it could phase out coal by 2040 with financial help

                            

 

Tuesday 2 November – World Leaders Summit Day 2

COP26 Leaders Summit outcomes

 

  1. On Monday leaders were calling for action on the gaps to the Paris goals; on Tuesday, they concretised their mandate to negotiating terms to agree an acceleration package. A statement signed by leaders from the US to Barbados put some initial concrete ideas on the table: revise 2030 NDCs, call for net zero strategies, deliver on $100bn and doubling adaptation finance, increase resources for dealing with losses & damages, finalise a high integrity high ambition Paris Rulebook, and act faster on transitioning power and transport systems.
  2. Today showed COP26 is being used to land iconic lighthouse agreements that could genuinely shift the global economy: The steel breakthrough, bringing together countries representing over 30% of global steel production; the Global Methane Pledge with 103 signatories covering 50% of global emissions; and the $8.5 billion Just Energy Transition Partnership with South Africa to fund a just transition away from coal in the G20’s most coal-intensive economy. Each of these opens up a fresh space for accelerated action, setting new precedents and committing governments to concerted efforts over the coming months. South Africa’s deal with the UK, US, France, Germany, and the EU is a result of collaborative diplomatic engagement over the past two years and a vindication of the UK’s emphasis on coal as a priority for COP26.
  3. The thread of strong calls for mobilizing the trillions of public and private money needed for driving the transition continued today. World leaders used the COP-stage to push for a stronger and more catalytic role of MDBs. Yesterday Mario Draghi called for Multilateral Development Banks “to co-share with the private sector the risks that the private sector alone cannot bear” and later explained that “money may not be a constraint any longer, if we bring in the private sector”. Today the US, the UK and the EU discussed how their respective initiatives could support each other and key principles for infrastructure investment and called for “a new paradigm of climate finance – spanning both public and private sources – to mobilize the trillions needed to meet net-zero by 2050 and keep 1.5 degrees within reach. The political stage is set for big changes in global clean infrastructure financing. 

Responding to the Global Methane Pledge announcement, E3G energy expert, Maria Pastukhova said:

The Pledge, made by countries emitting half the world’s methane, is a positive and a long-overdue step forward, putting the second-biggest human-made cause of global warming in the spotlight. The real work begins now. Before COP27, the pledge must get the top three emitters China, Russia, and India on board, supported by transparent governance and monitoring mechanisms.

 

Most importantly, the gas, oil and coal industry must ramp up efforts to drastically cut energy-related emissions, showing tangible results within the next few years. There is a suite of cost-effective measures they can use to do so.

 

It is of paramount importance that the reduction of methane emissions does not replace the need for a continued global effort to drive down demand for fossil fuels if the world is to keep 1.5C alive. 

E3G’s Climate and Diplomacy lead Alex Scott said:  

“We have seen strong calls the past two days from leaders on the need to accelerate action this decade to keep 1.5C in reach. The UN and climate vulnerable countries have been calling out the need to focus on fossil fuels. The methane pledge could be a start at bringing more specific details on the actions countries are going to take. But we’ll need to see more over this week on how countries will phase down the use of fossil fuels.” 

                       

On day two of the World Leaders Summit at COP26, we’re looking out for progress on the following:

  1. Accelerating emissions reductions for a 1.5˚C pathway
  2. Take climate finance to the next level
  3. Closing the gaps on adaptation and loss and damage

E3G’s COP26 team are live-tweeting announcements as they happen. Keep up to date with the thread below:

            

Leo Roberts is tracking progress on coal:

            

Johanna Lehne on steel decarbonisation in the Glasgow Breakthroughs:

            

And Johannes Schroeten on MDBs:

                                

                 

Monday 1 November – World Leaders Summit Day 1

Monday marked the opening day of COP26 in Glasgow. The key threads of leaders’- opening speeches covered:

  • More action in the 2020s for 1.5C. Across three parallel plenaries of Leader statements there was clear recognition that current action isn’t fast enough for a pathway to keep warming to 1.5C and that countries need to do more in the 2020s. Barbado, Bermuda and Antigua joined a number of developed countries in calling for pragmatic solutions, particularly on adaptation and loss and damage, to help close the 1.5 degrees gap.This common thread clearly opens political space for COP decisions on a process for ambition acceleration. Many countries called out fossil fuels as a major target for accelerated action. India announced new 2030 ambition and a net zero target by 2070,Viet Nam nd Brazil announced plans to update its NDCs.
  • Adaptation finance emerged as a key priority. New but small pledges on adaptation finance from the US and Canada stood in contrast to the strong calls from Barbados, Fiji, Antigua and Barbuda for much bigger sums of finance. Switzerland likewise pledged $11m and Spain $30m to the Adaptation Fund for 2022. 50% of the 100bn annual climate finance commitment for adaptation is emerging as a low baseline for the kind of adaptation finance action called for. Consultations on adaptation finance will reconvene Tuesday afternoon.
  • Loss & Damage is now a clear benchmark. Strong calls for progress on dealing with loss & damage from Antigua and Barbuda and Tuvalu in particular, have set progress on loss & damage as a clear benchmark for the COP. The £1m pledge from Scotland to support developing countries deal with loss and damage is the first of its kind from a developed nation, setting the standard for other donors to follow suit.
  • Focus on finance mobilisation beyond the UNFCCC space. Leaders chose to use the COP stage to call for coordinated action on mobilising the trillions needed for transition and dealing with impacts. Barbados PM made a bold call for 500bn annual SDRs allocation, Germany and Italy called for coordinated efforts to mobilise private sector money through development banks – they acknowledged it would require novel approaches with MDBs working with and alongside the private sector, , and platforms to co-share risk-management Spain committed to reallocating 20% (totalling at least €350m) of its SDRs to vulnerable countries in addition to agreeing to increase climate finance by 50%, and Switzerland pledged a further $55m climate finance.

 

 

On accelerated climate action in the 2020s, Alex Scott, Climate Diplomacy and Geopolitics lead at E3G said:

“Yesterday leaders showed they share a clear recognition of the gaps in climate action to keep warming to 1.5C.  Speeches recognised this COP as a political tipping point moment for accelerating action in the 2020s. This picks up from the recognition from the G20 that more action in the 2020s would be needed.  What we need from today is concrete proposals on what this looks like – UN Secretary General pitched annual revisions of climate targets and plans, how will leaders instruct their negotiators on putting that proposal into process?”

 

“What became really clear yesterday is that the “Glasgow package” that negotiators and ministers need to pull together by the end of these two weeks must have a credible answer on addressing the losses and damages of climate impacts. Leaders like Barbadian PM Mia Mottley were clear that with current climate targets putting us on track for 2.7C warming vulnerable communities we can’t wait – we need to define the support for dealing with losses and damages at the same time as hastening emissions cuts.”

On sustinable finance, and the role of MDBs in scaling up international climate finance, Julian Havers, Lead of Public Banks at E3G said:

“World leaders used the COP-stage to push for a stronger and more catalytic role of Multilateral Development Banks from financing billions to the shifting of trillions. Mario Draghi called for new approaches in the co-sharing of risks, but for new burden-sharing arrangements to be effective they need developing country buy-in and country ownership. All voices need to be brought to the table in an inclusive process to close the trillion-dollar investment gap to keep 1,5 alive and to save COP26.”

On India’s new climate commitment, Madhura Joshi, Senior Associate at E3G said:

“India’s commitment at COP26 is definitely encouraging. By committing to 500GW of non-fossil fuel energy capacity by 2030 and 50% of RE by 2030, the Prime Minister has set India firmly on a clean energy pathway which can deliver net-zero by 2070, potentially even earlier. While one reading of these targets could mean that the government is leaving some wriggle room on coal, but we know, and several studies have shown, that new coal capacity is both completely uneconomical, and not needed for India’s energy future. Judging by past performance, India often does better than its set targets. The stage is now set for a step change in clean investment.”

On adaptation, loss & damage and resilience, Jennifer Tollmann, Senior Policy Advisor at E3G said:

Stories of devastation and climate impacts dominated statements by world leaders, indigenous peoples and youth alike. Support for adapting to our climate-changed world has clearly emerged as a key priority. It is also one of the areas where rich nations can still significantly improve what they’re offering throughout the next two weeks. Through additional pledges but also by committing to a clear date by which they will provide a balanced share of finance for adaptation before 2025..

 

The trickier but no less important question is how to support countries rebuilding from losses and damages – questions which will need at least the beginning of an answer by end of next week.

 

                                   

                               

Responding to the UK Prime Ministers launch of the ‘Clean Green Initiative’, E3G Sustainable Finance expert Julian Havers said:

“The US pledged to mobilise hundreds of billions of dollars in sustainable investment through the Build Back Better World Initiative, and today the UK is joining forces with its ‘Clean Green Initiative’, in what is set to become a last minute G7 push at COP26.

 

To get the trillions in investment needed, we also need more emphasis on green bonds, better cooperation between CDC and multilateral development banks. But Boris Johnson must bring new funding to the table, to maintain credibility and buy-in. He also needs to find a thoughtful approach to work with and alongside China and come forward with an inclusive agenda for 2022 to mount the necessary financial firepower to keep 1.5 alive. This process which should start with commitments here in a Glasgow leadership-push to close the trillion-dollar infrastructure development gap to save COP26.”

                          

Ahead of the UK Prime Ministers speech at COP26, Alex Scott, Diplomacy and Geopolitics Lead at E3G said:

“The Prime Minister is right to call for accelerated climate action in his speech. There is a deal to be done at COP but to deliver it, he needs to persuade rich countries to fully deliver on their past promises and work together to leverage the trillions of finance needed for countries to recover better & fight climate change.”

Tom Burke, Chairman and co-founder of E3G said:

“We thank the prime minister very much, but the small print means this money still may not materialise. This looks much more like managing today’s headlines than managing the climate crisis”

 

Sunday 31 October- G20 outcome

 

 

Friday 29 October – E3G COP26 live tracker

The G20 Leaders’ meeting this weekend could set up high ambition politics into COP26 in Glasgow for a climate deal that genuinely shapes the political expectations around greening economic recoveries into 2022.

Despite significant progress on climate action since the Paris Agreement was signed, scientists’ latest “code red” warning and the devastating climate impacts of the past year show that progress isn’t happening fast enough. COP26 is a major opportunity to clinch a consensus agreement on ramping up faster action in the 2020s. We’ve set out four tests for G20 leaders to build the high ambition politics needed and collated a COP26 explainer on the key tasks and how the summit will unfold.

We have an extensive team of experts at COP26, watching the politics closely to track how a final deal can be done. To request background briefings, commentary or interviews, please reply to this email or contact press@e3g.org.

 

 

G20 Leaders, COP26 Package Politics, Geopolitical implications
Nick Mabey, E3G Chief Executive & Co-founder (G20, COP26, geopolitics, UK politics)
Alex Scott, E3G Climate Diplomacy and Geopolitics Lead (G20, COP26, Geopolitics)
Jennifer Tollmann, E3G Climate Diplomacy & Geopolitics expert (COP26, Geopolitics, EU/German politics)

Climate Ambition
Tom Evans, E3G Climate Diplomacy & Geopolitics expert (COP26, geopolitics, UK politics)

Coal & iconic finance shifts out of fossil fuels
Chris Littlecott, E3G Fossil Fuel Transition Director (Coal)

Climate finance – $100bn & private sector transformation
Iskander Erzini Vernoit, E3G Policy Advisor (COP26 and Finance)

Adaptation, Climate Risk & Loss and Damage
Taylor Dimsdale, E3G Risk and Resilience Director (Risk and Resilience)

Wider finance packages for economic transition
Kate Levick, E3G Sustainable Finance Director (Financial System Reform)
Julian Havers, E3G Public Banks and Just Transition Lead (MDBs, Climate Finance)

US policy
Alden Meyer, E3G Senior Associate (G20, COP26, geopolitics, US policy)
Claire Healy, E3G Washington DC Director (COP26, Geopolitics, US politics) 

China policy
Byford Tsang, E3G China Expert (China, Geopolitics) 

Green recovery
Ronan Palmer, E3G Clean Economy Director (Clean Economy)  

EU policy & politics
Lucie Mattera, E3G Head of Brussels office (EU politics) 
Brick Medak, E3G Head of Berlin Office (German Politics) 

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