Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

The COP Shop Podcast #4: Taking stock

© Shutterstock / Andy Dean Photographycop shop podcast
“There’s no point being naïve that we have a silver bullet…we have to manage the transition in a really thoughtful and engaging way,” said James Close of NatWest.

The deal’s been done and, as the dust settles on the Glasgow Climate Pact, EV Europe editor Allister Thomas and James Close, head of climate change at NatWest Group, dig into the detail.

Together they discuss the implications on the future of fossil fuels, whether developing nations can trust the COP process as climate finance pledges fall short and whether COP26 lived up to its central promise.

For Mr Close, the end result was “better than it could have been, but not as good as it needs to be.” But nevertheless, he said its completion offers an opportunity for everyone to look to the future and how the pact can be carried forward, both at governmental and corporate levels.

The inclusion of language on coal and fossil fuels – while not as challenging as many campaigners sought – is in itself “a big shift” he added, given previous agreements have rarely mentioned fuels explicitly.

 

 

 

This is likely to affect investor sentiment; while there were no significant market shifts immediately after the Paris Agreement, he noted the coal sector has since underperformed the market, suggesting the signals sent by events like COP26 help to set the market agenda, even if there remains political scepticism.

In that context, the difference between “phase down” versus “phase out” is less pronounced – both send the right signals to investors.

Mr Close added: “I think maybe if there’s one thing that was missed around Glasgow it was the fact that in Paris we talked about the pain everybody would have to endure in shifting away from lower-cost fossil fuels to higher-cost renewables. The narrative is somewhat different now; you can swap…fossil fuel energy for lower cost, cleaner and more productive energy,” and can do so while both providing high-quality jobs and benefitting the economy.

However, the finance to fully enable this kind of transformation in developing economies hasn’t fully materialised, though there is now hope to close the gap by 2023 at the latest. Accordingly, there is some ongoing distrust from developing nations around the promises that have been made – particularly for those who feel that the helped offered by Western nations in response to COVID-19 and vaccination programmes has not been extended to them.

Another sticking point in the final agreement was the establishment of a “loss and damage” fund to help support those countries inevitably affected by climate change – discussions on which extend back to the 2013 COP19 meeting in Warsaw.

Despite current resistance from some developed countries, Mr Close noted at some point it will become in developed countries’ interests to make sure that money is flowing, because the alternative would be large-scale migration, deep uncertainty in capital markets and market volatility which will not support global sustainable growth.

However, Mr Close agreed that small countries like Scotland – which did contribute a modest sum of £1 million to the Climate Justice Resilience Fund – can still make a difference to the process. He noted that the signal of that offering was “a powerful one” and that ambitious progress could be made at the city or regional level – something First Minister Nicola Sturgeon alluded to prior to the event.

The scale of the challenge is monumental. $70 trillion in cumulative capital expenditure may be needed to build out zero-carbon energy capacity while keeping the lights on, by some estimates.

However, Mr Close says that this will be “the 21st Century growth story” – and for that reason he is cautiously optimistic. “There’s no point being naïve that we have a silver bullet…we have to manage the transition in a really thoughtful and engaging way,” he said, but in the wake of summits such as Paris and Glasgow, he believes “the conversation is changing.”

And so, despite a two-week long negotiation and perhaps some eleventh-hour disappointments, his feeling of “cautious optimism” around the long-lasting impact COP26 remains.

Recommended for you

More from Energy Voice

Latest Posts