COP26, the annual climate summit scheduled for November this year was to ready the Paris Agreement for its coming-into-force on the 1st January 2021. It is a COVID-19 casualty and has been rescheduled for November 2021. In this, the fourth in our Climate Calculus series, Jonathan Shopley dissects the implications of the 12-month delay for climate action — and where that leaves business.

Climate Calculus Series: COP26 is pushed back by a year — is the Paris Agreement delayed or dead?

Our Climate Calculus series kicked off with three articles focused on the math of climate change. Math is powerful when there are a number of variables that can be used reliably to provide critical insights and answers to important questions, such as — at what concentration of atmospheric greenhouse gases will we have a stable climate; when should we get to net zero emissions; and, at what price of carbon can the global economy ‘solve’ the problem.

Maths is important, language more so

Maths isn’t helpful in answering questions where they are too many unknowns, and climate politics is complicated to start with. Under the influence of COVID and the rising trend of nationalism, ‘complicated’ is trending towards ‘unfathomable’. We need to complement math with an analysis of human behaviour — specifically how the language we use influences our collective response — to make sense of our climate predicament.

In these COVID and Climate Emergency times, language ‘infects’ us with information that is shaping our beliefs and responses. The digital age has super-charged the impact of language with memes — and across the climate community, mantras such as ‘climate emergency’, ‘build back better’, and ‘race to net zero’ are infecting us with urgency, purpose and ambition. Of course, not all beliefs that evolve are true; rules that emerge aren't necessarily fair; and, policy responses are not necessarily effective. There are glaring examples of all these lost in translation issues in international climate policy. ​

Belief in the Paris Agreement is unfounded

The Kyoto Protocol, which preceded the Paris Agreement, was an ambitious attempt at an international framework to synchronise the ​actions of countries with different climate profiles. However, the whole exercise was non-binding evidenced by the fact that the United States and Canada were able to withdraw without ​penalty, severely reducing its global impact. It will die an unmarked death at the end of this year, replaced on the 1st January 2021 by an equally flawed Paris Agreement.

There is a prevailing belief that the Paris Agreement will succeed where the Kyoto Protocol failed because all countries now have the same responsibility for developing and implementing climate mitigation targets and reporting their progress to the UNFCCC. That belief is unfounded — if anything the Paris Agreement will prove to be even more difficult to implement.

The Paris Agreement’s rules are largely non-binding

At the last climate summit (Madrid, December 2019) attention was focused on completing the ‘Paris Rulebook’ so that it could be put into operation on 1st January 2021. As it happened, the Rulebook wasn’t completed. It proved impossible to find consensus amongst nations about a fair interpretation of Article 6 of the Paris Agreement which is all about international collaboration.

Vexing as that failure of process was, that isn’t the main problem. The main problem is that the Agreement is still non-binding. The US has already triggered its withdrawal, others are wavering. There are no sanctions for countries which back-out, and no consequences for those which do not strengthen their national targets in line with the Paris goals. So, an effective international policy response has yet to emerge.

No escape from ‘The Prisoner’s dilemma’

Mantras like …. ‘tragedy of the commons’, ‘prisoner’s dilemma’ and ‘the free-rider problem’ are frequently used to label this thorniest of issues in climate policy. These apply to strategic situations in which the actors have incentives to make themselves better off at the expense of other parties. The result is that all parties are worse off. This is not just a climate problem – there are any number of global issues that suffer the same wicked challenge – from nuclear arms proliferation, protection of marine and terrestrial ecosystems to space junk. William Nordhaus, Nobel laureate in economics is unequivocal on the subject1 “voluntary international climate agreements will accomplish little; they will definitely not meet the ambitious objectives of the Paris accord”.

If we accept Nordhaus’s conclusion, then the question is whether a year’s delay to COP26 will be a useful opportunity to fix the glaring design flaw. I doubt it. Having attended many COPs over the years, I find it hard to envision how 22,000 (or so) people assembled from around the world into a dizzying array of negotiating meetings and events for two weeks could shift the Paris Agreement from a loosely structured voluntary agreement into something with teeth and consequence.

On the other hand, sub-national states, cities and particularly private sector entities will use the time to blow past the stalled negotiations to deliver a wide range of pledges, commitments, and importantly, immediate actions to finance mitigation and adaptation. Young people who will be saddled with this massive tragedy of the commons are demanding this. Shareholders used to dividends from reliable stalwarts of the fossil age are alert to the risks of expecting business as usual to see us through. The private sector can view this in one of two ways: a signal to wait for a better Paris Agreement, or a signal to get ahead. First-mover advantage in this instance is not a bad position for business.

In our next article in this series, Jonathan Shopley explores how leadership across the private sector and amongst governments might yet forge a meaningful link between the Paris Agreement and our goal of a net zero economy before 2050.

 

1William Nordhaus, “The Climate Club: How to Fix a Failing Global Effort”, Foreign Affairs, May/June 2020