COP25 climate talks: What just happened, and what lies ahead?

The UN’s 25th Climate Change Conference has drawn to a close in Madrid, leaving us with conflicting emotions.

The International Institute for Sustainable Development (IISD) characterized the atmosphere early on, saying “the divide between optimism and outrage was palpable”. While negotiators weren’t able to resolve all technical questions, the global momentum for climate action in the general public and the private sector is at an all-time
high.

While this represents a critical step towards achieving targets set by the Paris Agreement, large emitters like Russia, China, the US and Brazil were found missing from this drive for ambition.

The UN Secretary General, António Guterres, delivered a rousing speech at the opening ceremony calling on delegates not to be “remembered as the generation that buried its head in the sand, that fiddled while the planet burned”, but ended up expressing his disappointment with the outcome after negotiations closed.

The updated pledges will be much needed in order to put the world on track towards limiting warming to a maximum of 1.5°C.

Under current commitments, the Climate Action Tracker finds only a handful of countries are compatible with a 2°C target; while Morocco and Gambia remain the sole countries whose plans are in line with limiting global warming to 1.5°C.

Climate commitments by country

The EU came through on its promises and released its European Green Deal, setting itself a climate neutrality target by 2050. This will be followed by a green industrial strategy and green budgeting plans in March 2020.

While the net-zero announcements poured out, other parts of the negotiations stalled completely in week two. One of the flagship issues of this COP, the topic of international carbon markets, failed to reach an agreement over the weekend. It is widely accepted that international carbon markets will help deliver on the Paris Agreement by allowing cooperation between countries to transfer emission-reduction credits from places with relatively low abatement costs to areas with higher price levels.

Controversial credits

After more than two weeks of negotiations and late-night talks stretching into the weekend, the parties could not agree on how to treat carbon credits that were issued under the Kyoto Protocol (the Paris Agreement’s predecessor). The head of the International Emissions Trading Association (IETA), Dirk Forrister, commented: “Studies show that robust international markets can save $320 billion per year by 2030 compared with a scenario in which nations work independently. These savings could double the amount of reductions at the same cost.”

To counteract the demoralizing effect of the stalled negotiations, more than 30 countries including Costa Rica, Germany and the UK came out in favour of the San José principles. This is a set of rules meant to guide the development of an international carbon market. The text calls on countries not to allow the Kyoto carbon credits into new markets, to set limits in line with the 1.5°C target, to avoid the double counting of any emission reductions and to share the revenues with developing countries to ensure they have reliable financial resources to adapt to climate change impacts.

Another area of negotiation that ended in disappointment was the topic of loss and damages. Countries that are particularly vulnerable to the effects of climate change – such as storms, droughts and food shortages – were demanding more decisive action and financial resources from industrialized nations. The international community is currently not meeting its goal to mobilize climate finance to the tune of $100 billion a year by 2020.

Business is forging ahead

The trend from this year’s UN Climate Action Summit continued, with businesses leading the way on climate announcements and urging their governments to take stronger commitments.

The UN Special Envoy, Luis Alfonso de Alba, commended the unprecedented mobilization of the private sector and cited examples of tangible on-the-ground action like the Our Only Future Pledge and the Chambers Climate Coalition.

In the same vein, the UN’s High-Level Champion Climate Champion Gonzalo Muñoz celebrated the successes of the Global Climate Action agenda since Paris, describing party and non-state party synergies as a virtuous circle of ambition. Over 500 B Corps announced their plans to reach net-zero emissions by 2030 —20 years ahead of the 2050 targets set in the Paris Agreement. Certified B Corporations are part of a community of 3,000 businesses that meet the highest verified standards of social and environmental performance, transparency, and legal accountability.

Under the umbrella of the investor agenda, more than 600 investors managing $37 trillion urged governments to enhance ambition to achieve the Paris Agreement goals and accelerate private sector investment into the low-carbon transition.

177 companies have now joined the 1.5°C pledge, collectively representing 5.8 million employees, spanning 36 sectors and with headquarters in 36 countries. 50 companies have joined the Fashion Pact, pledging to align the industry with global climate targets, while the Net-Zero Asset Owner Alliance continues to garner momentum in the financial sector.

The Resilience Lab looked beyond 2030 to workshop scalable solutions for adaptation and the IETA launched its Markets for Natural Climate Solutions initiative, including the Arbor Day Foundation, BHP, BP, Chevron, Shell and Woodside Energy.

“The hope is not within the walls of COP25. The hope is out here with you,” said Greta Thunberg at a Fridays for Future rally that took over the city of Madrid late on Friday night. Citizens of all ages, youth delegations and campaigners took to the streets, and organizers estimated up to 500,000 people participated in the climate march.

The following Wednesday an impromptu protest calling for more decisive climate action outside the plenary hall sparked an unexpectedly strong response from security forces, leaving 200 observers in the cold outside the congress centre (they were later readmitted).

The contrast between the slow-moving negotiations and the vibrant atmosphere across the side events was more evident than ever.