The COP26 summit, hosted by the UK, in partnership with Italy on 1-12 November 2021, brought together 197 countries to accelerate action towards combating climate change by stabilising emissions of greenhouse gases.
The US climate envoy, John Kerry, describes the summit as "the last best chance to avert environmental disaster". The themes and related topics for COP26 included Adaptation and Resilience, Nature, Energy Transition, Clean Road Transport and Finance and the Future of Cities. Climate change and the transition to a low carbon economy are top of the political agenda, but these issues also present a range of challenges for businesses. We are helping our clients to future-proof their businesses and identify the risks and opportunities presented by COP26.
The UK Department for Environment Food and Rural Affairs has published a second consultation on the proposed UK mandatory forest-risk commodities due diligence regime. The regime will seek to prevent commodities that are the product of illegal deforestation and degraded ecosystems from coming onto the UK market by obliging in-scope businesses to conduct due diligence on their supply chains. The consultation follows on from the recent enactment of the Environment Act 2021 which contains broad powers to implement the regime. In this briefing, we consider the details being consulted upon, the implications for trade, and look at some of the key differences with the parallel proposals being considered on the same subject by the EU. Read more about UK Deforestation Due Diligence Framework Implementation: Further Detail Published.
As part of its efforts to tackle climate change, the European Commission has proposed the introduction of a new carbon border adjustment mechanism (CBAM) which aims to address the issue of "carbon leakage" – this involves EU companies moving carbon-intensive production to other countries to take advantage of lower standards or EU companies importing cheaper, more carbon-intensive products. In this briefing we explore the likely impact of CBAM, the challenges ahead, and whether it will provide an example for other countries to follow, or will fail. Read more about the EU's Carbon Border Adjustment Mechanism - Trendsetter, or doomed to fail?
At COP26, 21 countries, including the US and the UK, together with a number of development banks signed a pledge to stop public financing of fossil fuel projects by the end of 2022 and to divert their spending into clean energy. Read more about the commitment to stop financing fossil fuels abroad.
The Global Methane Pledge, which was launched at COP26, was heralded by European Commission President von der Leyen as "the moment when the world moves from aspiration to action." Following agreement on 2 November 2021, the EU, US and 103 other countries, including the UK, had signed the Pledge. Current signatories constitute 70% of the global economy and account for nearly half of global methane emissions. Significant methane emitters that have not yet committed to join the Pledge include China, Russia and India. Read more about the Global Methane Pledge.
Some 6 years after the Paris Agreement, COP26 has resulted in agreement on a global carbon market mechanism (GCMM) largely completing the so-called 'Paris Agreement Article 6 Rulebook'. Key decisions (the Rules) have been made on the eligibility of projects and activities to be included in the GCMM, the approval process and issuance of credits, the making of corresponding adjustments to host state's emission accounts, and how to deal with legacy projects and credits under the Kyoto Protocol's Clean Development Mechanism (CDM). We discuss the key elements below along with the likely impacts on the compliance markets and voluntary carbon markets. Read more about the Article 6 Rulebook for the new Global Carbon Market Mechanism agreed.
Ahead of its Presidency of COP26, the UK Government has published its Net Zero Strategy to 2050. The Strategy covers all business sectors and some cross-cutting themes. This briefing explores major new elements of policy, some of the major uncertainties, and key challenges faced by business in planning and implementing a path to Net Zero by 2050. Read more about UK Net Zero Strategy - A clearer view of the challenges to 2050.
China has pledged to be carbon neutral by 2060. It's a huge ambition and will require a vast amount of domestic and international investment. Our experts examine China's green agenda, the opening up of its financial markets and what this means for international businesses and opportunities. Read more about China's Green Finance Agenda.
Environmental, Social and Governance ("ESG") factors have fast risen to the top of the board agenda across all sectors, with increasing awareness that a failure to address these matters can be detrimental both financially and reputationally. Investor pressure, internal governance and the proliferation of regulatory requirements and voluntary standards across the globe makes this a complex area to manage. This newsletter is intended to assist banks, financial investors and corporates in keeping up to date with ESG developments. Read more about Sustainability: Recent ESG Developments.
Clifford Chance has collaborated with the World Economic Forum on the publication, Delivering a Trade and Climate Agenda. The report finds that while businesses are actively pursuing emissions reductions, action on trade policy can help accelerate this shift. The report outlines eight ways in which trade policy can help businesses accelerate the transition to net-zero. Read more about Delivering a Trade and Climate Agenda. For a breakdown of the report, read the Summary of Recommendations.
COP26 – the United Nations' 26th conference on climate change is expected to focus not only on the global climate crisis, but also to highlight the interconnected loss of biodiversity. These issues will have a huge impact on all of us – including businesses. At a recent Clifford Chance event, a panel of experts discussed nature-based solutions and the crucial role nature plays in combating climate change and sustaining national economies, as well as examining how state and private sector nature-based solutions could be financed. Read more about COP26: Nature-based solutions to climate change.
With COP26 (the United Nations climate change talks) fast approaching, the U.S. has announced its new Nationally Determined Contribution (NDC) under the landmark 2015 Paris Agreement, pledging to reduce greenhouse gas emissions by 50-52% below 2005 levels by 2030. The announcement was made at the President Biden's Leaders Summit on Climate, a virtual gathering of world leaders and representatives of civil society and the private sector, aimed at raising global ambition on climate action. The new NDC, along with a bundle of climate-focused government policies announced this week, are the Biden Administration’s latest efforts to reestablish the U.S. as a global leader on climate in the aftermath of the country’s official withdrawal from the Paris Agreement under the Trump Administration. With the U.S having rejoined the Paris Agreement in February 2021, the announcements are a crucial step in rebuilding America's credibility on climate. Read more about What the latest Paris Agreement commitments mean for U.S. climate policy.
During his campaign to be elected as President of the United States, Joe Biden set out an ambitious climate plan which, among other things, calls for a goal of net-zero emissions in the U.S. by 2050 and actively combating climate change. Below, we have outlined the implications of the Climate Plan for the U.S. and the international community under the new Biden-Harris Administration. Read more about the implications of President Biden's plan to combat climate change.
The European Commission has published its proposed 'European climate law' setting a binding EU target of net zero greenhouse emissions by 2050. The proposal also provides for the Commission to review its current 2030 climate targets and includes a controversial power allowing the Commission to set a trajectory for emissions reductions from 2030 to 2050. This law will entail the strengthening of renewable energy, energy efficiency and interconnection targets and will lead to the introduction of more stringent measures at EU and national level designed to cut emissions. This briefing considers the detail of the proposal. Read more about the European Commission proposes Net Zero Climate Law.
The UK Government has announced a new target to reduce the UK's greenhouse gas emissions by at least 68% (up from 53%) by 2030 compared to 1990 levels. The new target would be incorporated into the UK's forthcoming revised Nationally Determined Contribution (NDC) under the Paris Climate Agreement. This target reflects the independent Climate Change Committee's advice on net zero. However, in line with NDC practice this target does not include emissions from international aviation and shipping. The Government has confirmed its intention that achievement of targets under the revised NDC would be met by domestic action in the UK, and not through use of international credits. Read more about how the UK Sets Ambitious New 2030 Climate Target Ahead of UN Summit.