Climate Leadership Coalition with its eight delegates attended the Glasgow Climate Change Conference as an observer. Above all, we followed sessions and initiatives which encourage increased climate investments. Together with our Nordic partners Haga Initiative and Skift – Business Climate Leaders, and the International Chamber of Commerce (ICC), we held a side event in carbon pricing. We also gave a presentation in the University of Helsinki’s side event, which covered green growth in cities.

Progress in carbon pricing

Our main objective was to follow what new aspects negotiations brought to carbon pricing. Together with our Nordic partners, we sent an open letter signed by the signatories of our Call on Carbon initiative to Heads of State and Government. The letter was signed by leaders from more than 130 businesses, cities, universities and business associations and networks, whose members and partners represent and gather over 60 million companies and farmers with over USD 25 trillion market capitalisation and over USD 120 trillion assets under management in over 100 countries.

 The signatories called on governments to:

  • back their net zero targets with effective, robust, reliable and fit-for-purpose carbon pricing instruments, consistent with the Paris Agreement, to facilitate a cost-efficient investment path to reach net zero emissions;
  • align their carbon pricing instruments where appropriate to create a stable and predictable investment environment; and
  • finalise the rules for international market mechanisms under Article 6 of the Paris Agreement to support cost-effective mitigation efforts, create a level playing field and minimise carbon leakage while enabling greater ambition.

The Glasgow Conference reached agreement on the rulebook on Article 6 of the Paris Agreement. This will enable the implementation of cross border emissions reduction measures by funding climate actions in partner countries.

A large number of countries were also ready to adopt the phasing out of fossil fuel subsidies as part of the concluding statement, the– Glasgow Climate Pact, but the expression “phase-out of fossil fuel subsidies ” in the finalisation stage of the draft document dissolved into to the ambiguous wording “phase-out of inefficient fossil fuel subsidies”. Analysis by the International Monetary Fund (IMF) found that subsidies for fossil fuels, including direct and consequential health and environment considerations, were around USD 5.9 trillion last year or about 6.8% of global GDP.

Carbon pricing was strongly brought up in many speeches by the President of the European Commission President Ursula von der Leyen and Canadian prime minister Justin Trudeau among others. Besides carbon pricing, Canada is also planning an emissions cap in the oil and gas sector.

Carbon pricing was also a key theme in the meeting of the Coalition of Finance Ministers for Climate Action.

”I acted as chair of the meeting of the Coalition of Finance Ministers for Climate Action held in connection with the UN Climate Change Conference in Glasgow at which there were a number of speeches to promote carbon pricing. This has also been required by many companies and business organisations in the Climate Leadership Coalition’s and their partners’ Call on Carbon initiative during the climate conference. The initiative is excellent and highly topical,” says Finnish Minister of Finance Annika Saarikko.

During the second week of the conference, Executive Vice-President of the European Commission Frans Timmermans gave a speech on carbon pricing in which he invited other economies to work with the EU.

In conclusion, it can be noted that progress has been made in carbon pricing even though its role still not at a sufficiently high level in negotiations and national policies. CLC and its partners will continue the Call on Carbon campaign until the necessary development actions are in place.

Other initiatives speeding up climate investments

The Glasgow Conference, like most earlier climate conferences, also announced sector specific projects and initiatives. The broadest included the Global Methane Pledge, which over 100 countries joined, the Declaration on Forests and Land Use, signed by over 140 countries, and the Finance sector climate pledge, where a large number of banks, investors and insurance companies managing assets totalling more than USD 130 trillion pledged to net zero the carbon emissions in their investment portfolios by the middle of the century.

Another significant initiative was the Glasgow Declaration on Zero-Emission Cars and Vans, which aims to end the sale of fossil-fuelled combustion engines worldwide by 2040. Signatories to the initiative include more than 100 national governments, cities, states and businesses.

Investors were also interested in the Industrial Deep Decarbonization Initiative for creating demand for low-carbon steel and concrete and the Clydebank initiative for net-zero shipping lanes.

A positive surprise was the US-China joint declaration on enhancing climate action over the next decade. In the declaration, the countries undertook to exchange information and pledged to set up a joint working group to promote climate crisis management and mitigation measures.

What next?

A number of new climate pledges were also made in conjunction with Glasgow COP26. Currently, countries which generate around 90% of global GDP have published carbon neutrality goals. Most of these goals are for 2050, 2060 or 2070. However, according to Climate Action Tracker, less than 10% of these carbon-neutrality ambitions are sufficiently included in these countries’ legislation and climate policies. Inclusion of these ambitions in those countries’ legislation and climate policies is the next natural step and will also help investors to predict future development.

”In addition to carbon neutrality goals, the 1.5C target will require significant new carbon sinks, especially between 2050 and 2100. The size of these sinks will correspond cumulatively to the emissions caused from now on. No country, as far as we are aware, has set concrete long-term objectives for sinks of such magnitude. In other words, we still have a major task ahead to reach adequate climate goals and policies. Carbon pricing will have a key role both in emissions reduction and in increasing sinks,” says CLC’s CEO Jouni Keronen.

More information: Jouni Keronen, CEO, Climate Leadership Coalition, +358 50 453 4881 and Kari Mokko, Development Director, Climate Leadership Coalition, +358 40 7513281