COP25, the longest ever United Nations Climate Change Conference, finally spluttered to a halt in Madrid on Sunday 15th December, having been scheduled to wrap up on Friday.
Expectations leading up to the COP were that the final elements of what has become known as the “Paris Rulebook” operationalising the landmark 2015 Paris agreement would be agreed. The problematic section relates to linking international carbon markets, which could significantly reduce the cost of reducing emissions. Sign off of this section was pushed to the Madrid conference following the failure of countries to agree in Katowice in 2018.
Unfortunately, seeming intractable differences between countries led to Article 6 remaining unresolved, and discussions will continue with the hope that final agreement will be reached at the next conference in Glasgow in November 2020.
Despite disappointment that the rule book has not been signed off, countries do still have the ability to negotiate bilateral exchanges under their own schemes, but without agreement on Article 6 it will be harder for these exchanges to count toward individual country efforts.
Many commentators also remarked on a ‘lack of ambition’ demonstrated by countries at the COP. They often cite the ‘Greta effect’, the forceful youth activism that has contributed to many jurisdictions, including the European Parliament and Canada, declaring a ‘climate emergency’. However, ambition itself will not solve the problem; what matters is what is actually done to curb emissions, not what is aspired to.
It is clear that current country commitments are not enough, and according to the International Energy Agency would see global warming rise to 3 degrees above pre-industrial levels, compared to the ‘below 2 degrees’ ambition of the Paris Agreement itself.
Countries clearly have a lot to do in the next 12 months if the UN process is to be brought back on track. COP26 will be held five years after the landmark Paris Agreement was reached and represents the first opportunity for countries to upgrade their emissions reduction targets. The United Kingdom, the host of the event, aspires to zero net carbon emissions by 2050, and is therefore in a position to take a credible leadership position to call for increased action from others.
Emissions intensive industry was discussed at many events, and it appears to be well understood that steel has a vital role to play in enabling broad societal decarbonisation. The transformation of ‘hard to abate sectors’ like steel to a zero net carbon footprint forms a critical element of the Paris journey.
In addition to discussion of decarbonisation technologies, the interaction between greenhouse gas regulation and trade featured prominently. The recent announcement from the new EU Commission president Ursula von der Leyen that the block’s new ‘Green Deal’ will include a carbon border adjustment mechanism focussed attention on the nexus between trade and environmental policy.
As my previous blog detailed, it was refreshing and encouraging to see so many steelmakers present and engaged. Indeed, an increasing number of worldsteel members are setting themselves ambitious CO2 reduction targets and investing in transformational projects, for example:
Our members' ability to deliver on the commitments they have made will very much depend on governments developing and implementing innovative and supportive policy frameworks to encourage and facilitate the new industrial revolution that will be required.