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As new climate commitments come at COP26, new funding pledges are made

02 November 2021 Kevin Adler

As COP26 completed its second day, announcements of new GHG emissions reductions commitments arrived from a number of Asian nations, and multilateral groups announced a range of funding programs aimed at bringing clean energy to the developing world and improving management of forests and biodiversity.

Nepal, New Zealand, Thailand, and Vietnam each presented updated climate commitments at or just prior to COP26, while noting that they are responsible for miniscule shares of global GHG emissions and yet are disproportionately at-risk from climate change.

New Zealand will raise its nationally determined contribution (NDC) goal to a 50% GHG reduction, up from a prior goal of 36%, said Prime Minister Jacinda Ardern prior to speaking at the global meeting. This would reduce the nation's targeted emissions to 571 million metric tons (mt) in 2030, compared with the current 623 million mt.

"The improved NDC comes off the back of our increased investment in climate aid, especially in the Pacific and represents a big step up in New Zealand's role in tackling climate change," she said.

NDCs are the promises made under the Paris Agreement to put the world on a path to limiting global warming to 1.5 degrees Celsius by 2050.

Vietnam, which is described by COP26 President Alok Sharma as one of the most vulnerable nations to rising sea levels in the world, came to Glasgow and announced new goals of reducing its GHGs per GDP by at least 15% by 2030 and at least 30% by 2050, compared with 2014. This is on top of the September NDC of a 9% net GHG reduction by 2030.

Prime Minister Nguyen Hong Dien on 1 November told the conference the country has a net-zero target by 2050 as well, but it needs technology transfer and investment from the world's wealthy nations. With sufficient international funding, Dien added that the country could reach a 27% net GHG reduction by 2030.

Key to Vietnam's effort will be increasing the share of renewable energy in its power mix to 15-20% from 7% currently, which would require up to 38 GW of capacity. By 2030, the country would close most coal-fired plants and replace them with natural gas-fired units. Also, it will embark on tree planting to raise forest coverage, and it will collect and treat 95% of urban solid waste.

"This warning from nature compels us to join hands, take action," Dien said in his speech. "All that we do must be nature-based and people-centered."

Thailand produces about 0.72% of global GHG emissions annually, said Prime Minister Prayut Chan-o-cha, but is considered in the top 10 of most vulnerable nations. "That was why I participated in the Paris Climate Change Conference in 2015, and Thailand was among the first group of nations that ratified the Paris Agreement," he told the COP26 assembly on 1 November.

The country already surpassed its original NDC goal by reducing GHGs from the power and transportation sectors by a combined 17% between 2005 and 2020, he said. Now, its new NDC envisions a 40% reduction by 2030 economy-wide, carbon neutrality by 2050, and a net-zero status by 2065, he said. (Carbon neutrality allows for a greater role of carbon offsets, such as forest sinks and carbon capture, whereas net-zero means minimizing carbon first and then offsetting.)

Thailand is hosting the APEC nations meeting in 2022, and he pledged that it will be the focus of that event. "Time is running out, and we can no longer afford to be complacent in combatting climate change, for it means the end of the world as we know it," he said.

Nepal committed to decarbonizing its economy by 2045 and, on the way, boosting clean energy to 15% of the generation stack by 2030, or about 1.4-1.5 GW. Central to its goals are bringing gas-fired and electric cookstoves to rural areas and, when possible, to supplying biogas.

New funding commitments made

Developing nations have been saying during the lead-in to COP26 that they need financial support for both the energy transition and climate adaptation, and that message is resonating with developed nations, multilateral development banks, and foundations—all of which this week pledged new funds to support an equitable global transition.

Deforestation was a major theme at COP26 on Day Two, and 105 nations signed the Glasgow Leaders' Declaration on Forest and Land Use, which includes $19 billion in new private and public funding to protect forests and improve biodiversity. (See related Net-Zero Business Daily article here.)

Multilateral development banks announced plans to step up their efforts when it comes to protection, restoration, and sustainable use of nature as well.

More than 40 nations signed the new Breakthrough Agenda proposed by UK Prime Minister Boris Johnson to push ahead more quickly on renewable power and clean hydrogen, zero-emissions vehicles, and near-zero-emissions steel.

"The US, India, EU, China, and some of the countries most vulnerable to climate change—representing more than 70% of the world's economy and every region—are participants," according to a statement from Johnson's office.

The Breakthrough Agenda pulls together some existing and some new programs, including:

  • Green Grids Initiative: One Sun, One World, One Grid. An 80-country program "to ensure no one is left without access to clean energy."
  • Global Energy Alliance for People & Planet: A new program of $10 billion from philanthropies and development banks to bring renewable energy to the Global South.
  • AIM4C: Led by the US and United Arab Emirates, this will deliver $4 billion or more on "climate-smart agriculture and food systems innovation."
  • Breakthrough Energy Catalyst. A new program aiming to raise $3 billion of government money and leveraging that into another $27 billion of private capital for emerging technologies such as green hydrogen production, direct air capture, and sustainable aviation fuel.
  • First Movers Coalition. A US-led program with 25 global companies signed up so far to make purchases that support clean technologies in key industries such as steel, aluminum, chemicals, and shipping/trucking.

Under the guidance of the International Energy Agency and International Renewable Energy Agency, an annual report will detail progress and lagging indicators in a "Global Checkpoint Process."

A separate program that also seeks to ramp up international spending commitments is being led by the European Bank for Reconstruction and Development (EBRD). In conjunction with European governments and Taiwan, the EBRD announced the High-Impact Partnership on Climate Action (HIPCA) on 2 November.

"This is the EBRD's first multi-donor partnership tackling climate change and environmental degradation," said EBRD President Odile Renaud-Bassio, and it's part of the bank's effort to make sure 50% of its finance is green by 2025.

The partnership has four priorities, according to an announcement: sustainable food systems; green financial systems; cities and environmental infrastructure; and "natural capital," the sum of water, soil, plants, and animals. These priorities are influenced by three cross-cutting themes: climate adaptation and resilience; a just transition; and gender and economic inclusion.

Another new investment program launched at COP26 is the Global Energy Alliance for People and Planet (GEAPP), which is seeking to bring renewable energy to 1 billion underserved people in Asia, Africa, and Latin America.

GEAPP-supported energy projects could reduce 4 billion mt of carbon emissions annually, compared with providing them with energy from coal and oil, the alliance said on 2 November. Of particular concern are new coal-fired plants, as the alliance said that the 243 under some stage of development or construction could produce 38 billion mt of GHGs during two to three decades of operation.

At the outset, GEAPP has $10 billion in commitments from philanthropic entities like the Rockefeller Foundation and Bezos Earth Fund; the Asian Development Bank, World Bank, and other development banks; and European countries. Its goal is to parlay those funds into another $90 billion of public and private investment that will enable countries seeking to bring power to their citizens to skip the highest-emitting options. "By replacing diesel generators and coal-fired power plants with renewable alternatives we can reduce carbon emissions quickly," Per Heggenes, CEO of the IKEA Foundation, said.

Echoing a major theme of COP26, Damilola Ogunbiyi, CEO of UN-supported Sustainable Energy for All, said that the program will serve the dual goals of improving equity and reducing emissions. "For 759 million people without electricity, and 2.6 billion people without access to clean cooking solutions, energy poverty is a daily reality that impacts every aspect of their lives," she said. "We … recognize the catalytic role that galvanizing partners and resources can play towards unlocking a just, equitable, and prosperous future for all."

In addition to $500 million for GEAPP, the Bezos Fund pledged another $1.5 billion on 1 November to a series of landscape restoration and food/agricultural initiatives, coordinating with the themes of Day Two of COP26. "Our commitment today supports a three-fold imperative —we must conserve what we have, restore what we've lost, and grow what we need in harmony with nature," Jeff Bezos, CEO of Amazon, said in a statement.

Posted 02 November 2021 by Kevin Adler, Chief Editor

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