Sidrah Kaleem
COP26 (26th United Nations Climate Change Conference) held in Glasgow in which the participating parties agreed on a global deal to boost climate action and approved rules that would create the framework for the global carbon market.
Therefore, Glasgow Climate Pact; the first ever deal with the objective of reducing coal, the worst fossil fuel for greenhouse gases, was negotiated between the attending parties.
[1] The pact also states for more urgent emission cuts and promises more money for developing countries and to help them adapt to climate impacts.
In November 2021, world leaders gathered in Glasgow to attend 26th United Nations Climate Change Conference, commonly referred as COP26.
The conference was expected to formulate the consensus with the help of international community on tackling issues of climate change including carbon credits, funding for countries vulnerable to climate change and nature-based along with practical, gender and the transport solutions needed to adapt to climate impacts.
COP26 was the third meeting of the attended delegates to the Paris Agreement 2015. In order to finalize rules to implement the agreement by the end of the U.N. climate change summit.
Under the framework of the Paris Agreement, each country is expected to submit enhanced nationally determined contributions every five years, to ratchet up ambition to mitigate climate change.
[2] Great emphasis is put upon the parties attending COP26 to take essential steps to lessen emissions, mobilize funding, and enhance variation and resilience.
To reach net zero by the middle of the century, parties are being urged to step forward with formidable 2030 emissions reduction objectives and to assure global net zero, public and private section financial organizations will need to provide the trillions
[3] In the present day, not a single country in the world is free from the influence of climate change. If climate change is not kept in check it will push 132 million people into poverty over the next 10 years, failing all the hard work done to achieve development.
[4] The hindrance for the third world countries is that they have no options left to develop first in a high carbon intensive way and then clean up and decarbonize later.
They need assistance to make investments to be able to adapt and do risk management of climate change, as they tend to be the most effected by harsh weather and natural disasters.
[5]There is possibility of becoming more resilient and to lessen emissions, however it requires utmost social, financial and technological changes.
Climate change is no longer viewed as environmental threat because the rise in it impacts all financial sections.
The financial sector has an important role to play in the fight against climate change by supporting reductions in climate change risk and mitigating the impact of adverse climate events.
[6] Therefore, countries must promote Green finance and handle climate related and environmental risks through following ways:
1. Mitigation: including advice on measures to contain and reduce emissions through policies—such as increasing carbon taxes, reducing fuel subsidies and improving regulation—and providing tools to help countries achieve their Nationally Determined Contributions.
2. Adaptation: including guidance on building financial and institutional resilience to natural disasters and extreme weather events, and infrastructure investments to cope with rising sea levels and other warming-related phenomena.
3. Transition to a low-carbon economy: including updates to financial sector regulation to cover climate risks and exposure to “brown” assets, as well as measures to help countries diversify economies away from carbon intensive industries while mitigating the social impact on affected communities.[7]
As COP26 ends, the 1.5-degree Celsius goal is alive, yet barely. In Glasgow, many countries – especially small emitters – stepped-up, significantly raising their climate ambition while committing to bold, wide-ranging climate action.
However, the picture coming out of COP26 is an imperfect one, as the world is still far short of where it needs to be to stem the impacts of climate change.
The road to COP27 begins now and it is vital that we accelerate the momentum provided by COP26.[8]
—The author is an experienced Central Banker
