COP26: Perspective Shifts to State and Local Efforts and Funding Challenges
Fresh Focus on State and Local Leadership
Attention at the 26th United Nations Climate Conference (COP26) has focused on the role of state and local governments in addressing climate change. On the same day that the mayor of London, Sadiq Khan, argued that cities must be “the innovators, the problem-solvers, the change-makers that are going to fix climate change,” John Kerry announced the creation of an inter-agency group to support the efforts of state and local governments in cutting emissions. Kerry explained that the “Sub-National Leadership Initiative for Climate” will work to “catalyze ambitious climate action by cities, states, and regions around the world.” Though details about the group remained sparse, Kerry emphasized that reducing emissions on pace with current targets was “dependent on what happens up and down the full political and economic governance ladder.”
Separately, the Biden Administration has made clear that achieving its climate goals will depend on action below the federal level. As detailed in our recent blog post, COP26: United States Announces Strategy to Reach Net-Zero Emissions by 2050, the Biden Administration recently announced Long-Term Strategy described a “multi-pronged approach involving the private sector, sub-national governments, and federal government to generate new regulations, direct investment, and programs at all levels of government.” Biden’s plan lists “non-federal leadership” as one of four strategic pillars—alongside federal leadership, innovation, and “all-of-society action”—that are necessary for achieving net-zero emissions by 2050.
Governors from several US states attending the conference echoed Kerry’s emphasis on regional leadership. For example, Louisiana Governor John Bel Edwards suggested that, if local efforts to curb emissions are successful, “future administrations, whether they’re Republican or Democrat, shouldn’t pose the same level of opposition” to climate goals.
Significant Commitments for Climate Finance
A series of announcements brought new weight to bear on the issue of climate finance. Treasury Secretary Janet Yellen stated that the United States would join the UK in backing a new capital market mechanism that seeks to direct $500 million a year to clean energy and sustainable infrastructure through bond sales. “The gap between what governments have and what the world needs is large,” Secretary Yellen acknowledged, “and the private sector needs to play a bigger role.”
Judging by the other financial commitments made at COP26, the private sector is preparing to accept a larger role. For example, the Global Energy Alliance, a group of philanthropic foundations and international development banks, announced the creation of a $10.5 billion fund to aid emerging economies transition from fossil fuels to renewable sources of energy. The group, which has drawn investment from the Rockefeller Foundation and Bezos Earth Fund, among others, intends to attract more donors in the weeks ahead.
In addition, a group of banks, investors, and insurers that cumulatively control $130 trillion in assets announced they would commit that capital to achieving global net-zero emissions goals. The group is made up of 450 banks, insurers and asset managers from 45 countries who have committed to “move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account.”
But new promises have highlighted lingering frustrations over lapsed commitments to climate finance. Many observers have noted that, more than a decade ago, a collection of the world’s wealthiest nations pledged to contribute $100 billion annually to developing countries by 2020. By some estimates, those countries have fallen short by tens of billions per year. These latest financial promises have prompted new questions about the enforceability and transparency of such commitments, among other issues.
We will continue to monitor both of these developments during the remainder of COP26 and beyond.
*Charlie Birkel contributed to this blog post.
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