COP26 - 2021 Glasgow - Progress or disappointment?

The author, Niklas Kaskeala, is Chief Impact Officer at Compensate.

COP26 afterthoughts

For some, COP26 is a huge disappointment. For others, a little less disappointing. For some, even a significant step forward.

Actually, it was all of these. The way you see the outcome is largely determined by what you expected from the meeting.

The Financial Times editorial headline pretty much sums up how I feel: “COP26 has achieved more than expected but less than hoped.”

Several important pledges to reduce emissions or to reach net-zero emissions were made in the weeks leading up to and during COP26. Climate Action Tracker estimates that the world is on track for about 2.4C of warming if all these new pledges are actually implemented. 

This is at the same time very far away from the 1.5C target set in Paris, but also much better than the 3-4C degree increase in temperature that we were still headed for just a few years ago. Glasgow still leaves a narrow window of opportunity to reach 1.5C degrees. 

International climate conferences like COP are an indicator of how ready the world is for change. All politics, including international climate politics, is always a reflection of the society around us. COP26 showed us that not everyone is ready for the necessary change yet. 

For those expecting world leaders to suddenly announce that they will start implementing measures to limit climate change to 1.5C degrees, COP26 was obviously a disappointment. But even if such an announcement was absolutely needed, it wasn’t perhaps very realistic to expect one. 

Of course, it would be helpful if world leaders showed even a little leadership at times. But this leadership won’t just fall out of the sky. It is created by putting enough pressure on them. 

Progress on carbon markets - but serious loopholes remain

Compensate’s main focus at COP26 was to advocate for strict rules for the so-called market mechanisms defined under Article 6 of the Paris Agreement. The rules for international carbon trading have remained undecided ever since the Paris Agreement was signed in 2015. 

After years of debate we finally reached a deal on Article 6 in Glasgow. Negotiators struck a compromise by allowing a substantial transition of pre-2020 carbon credits into the new Paris Agreement era carbon trading mechanisms. Something countries like Brazil, India, and China were demanding. Many of these credits are essentially worthless for the climate, so this is obviously of great concern. It is now up to civil society and other critical actors to put enough pressure on buyers to make sure that no one actually buys these “zombie credits” . In return, the deal sets out stringent accounting, baselines, and additionality requirements for the new carbon market mechanisms under Article 6, as sought by the EU.

A decision was reached to apply so-called corresponding adjustments (CAs) to all carbon credits traded on the compliance markets. This makes sure that these credits won’t be double counted by both the issuing country and by the country buying them. 

But the deal will unfortunately leave significant loopholes for the voluntary carbon market where companies and other private actors seek to offset their emissions. It will allow emission reductions or carbon removals to be counted by both the country where they took place and by a company financing them. 

Excluding the voluntary market from the Article 6 rules will allow companies to claim that they have offset their emissions, even though there is no certainty that they have really paid for any real additional extra reductions or removals.

It will be up to the integrity of the companies that are offsetting to make sure they only buy carbon credits from projects in countries where the government is willing to make a corresponding adjustment also for credits sold to the voluntary market.

If companies want to pay for emission reductions or carbon removals that are also counted by the host country and help it to reach its climate targets, that’s perfectly fine. But you cannot make an offset claim.

The problem is that not all carbon credit sellers and certification organisations understand this. They will sell double counted credits that will be used to make false offset or carbon neutrality claims. This obviously won’t help reach our global climate goals.

Offsetting should ultimately be about increasing the ambition levels of global climate action. If we just support the host countries of carbon projects to reach their (in many cases already insufficient) stated goals, we are not increasing overall levels of ambition. 

The deal leaves much to the integrity of actors on the voluntary carbon market. This is something that worries me as their track record on integrity hasn't been too good. Compensate’s research shows that up to 90% of certified nature based offset projects fail to meet basic sustainability requirements or never reach their projected goals.

It is now up to Compensate and other like-minded critical organizations to educate carbon credit buyers on the difference between offsetting, which requires the corresponding adjustment from the host country, and non-adjusted credits that cannot be used for offset claims but can be used to claim climate financing to the host country or supporting the host country to reach its climate goals. 

Let’s keep up the pressure 

For me, COP26 was a reminder that no one will just magically solve the climate crisis for us. Instead of falling into complete despair, let’s recognize that progress is being made, even if ever so slowly. When we work to limit global warming, every tenth of a degree counts. 

But let’s also hold our leaders accountable for not doing enough and demand the necessary solutions. We can also show through our everyday actions that change is possible.