Corporate adaptation measures, carbon offset policy and new U.S. regulatory responses are among the top issues attorneys say they’re tracking at the upcoming United Nations climate talks.
The trajectory of the climate crisis is at stake in Glasgow, where more than 197 countries will gather starting Oct. 31 for the two-week COP26 summit. There, they’ll ratchet up their commitments to cutting greenhouse gas emissions under the 2015 Paris climate agreement and tie up its loose technical threads.
“This COP is considered particularly important because countries are not on track to meeting the temperature goals that are set in the Paris agreement,” said Daniel Bodansky, a professor at the Sandra Day O’Connor College of Law at Arizona State University.
The main goal in Glasgow is for countries to commit to enough near-term pollution cuts to keep global warming from exceeding 1.5 degrees Celsius above pre-industrial temperatures. The Biden administration is committing to cutting its greenhouse gas emissions by 50-52% below 2005 levels by 2030.
There’s a lot on the table in addition to carbon cuts. Major polluters need to commit to financing emissions cuts, figure out how to help pay for developing countries’ climate adaptation measures, and how to help countries suffering the most loss and damage from climate change.
A thorny question about how carbon trading will be counted needs to be resolved, as well as getting all countries on board with a common time frame for emissions cuts.
Ultimately, the success of the COP26 and the Paris climate agreement depends on each country’s politics, since emissions reductions and climate finance pledges are voluntary.
“There will be a lot of negotiations on technical issues, but the macro decisions on ambition and finance are made in national capitals,” said Michael Gerrard, founder of the Sabin Center for Climate Change Law at Columbia University.
Here are the top issues practitioners are watching as COP26 unfolds:
The Biden administration could use the summit as a springboard to make new commitments affecting domestic regulations. That’s especially true as hopes fade for congressional approval of climate provisions such as the Clean Electricity Performance Program.
Some attorneys are closely watching how government commitments at COP26 will flow back to their clients, said Margaret Peloso, a partner at Vinson & Elkins LLP focusing on climate change risk management and environmental litigation.
“If these are the things that governments are saying they’re willing to commit to do and we need to happen, are my clients going to face those same demands, or more rigorous ones, from stakeholders and shareholders?” she said.
Without congressional support for the climate goals the White House will present at the summit, the U.S. credibility to make good on them will erode. So the White House is expected to announce stricter emissions regulations instead.
“They’ll make commitments on what the president has control over,” said Hana Vizcarra, staff attorney at Harvard Law’s Environmental and Energy Law Program.
The White House will send more than a dozen senior officialsto the summit, each of whom may use it to announce plans for major new climate regulations.
Interior is due anytime to issue a report on the future of the federal oil and gas leasing program, which is key to the agency’s climate agenda. The EPA is also expected to announce possible regulations on methane emissions from existing sources, a move seen as important to stemming U.S. contributions to global warming.
“We’re going to be paying very close attention every day up to the beginning of the conference or during the conference to see what each of those agencies rolls out,” said Ethan Shenkman, a partner at Arnold & Porter Kaye Scholer LLP and former EPA deputy general counsel in the Obama administration.
One of the biggest unresolved issues from the 2019 climate talks in Madrid is how countries can use international carbon markets to cut emissions under Article 6 of the Paris pact.
The idea of of Article 6 is to use carbon markets to encourage emissions reductions in the places they can be made most efficiently, but the stricter the rules, the higher the transaction costs, Bodansky said.
Questions remain about how emissions reductions are counted and how the rules will prevent two countries from counting the same emission reductions against their goals.
Uncertainty surrounding the rules for carbon trading has slowed down work on carbon-offset projects worldwide. and attorneys with corporate clients will be watching for more clarity about how emissions reductions will work, said Brook Detterman, a principal at Beveridge & Diamond PC in Boston.
“I have seen several clients not develop projects over uncertainty about how local governments in those countries are going to address, or want a piece of the project, with some uncertainty about how marketable the credits will be under the Paris agreement,” he said.
Corporate Climate Commitments
More than just negotiations among countries, the summit is also a bit of a climate activism expo, with corporate climate announcements and colorful public side events designed to pressure diplomats at the negotiating table.
Companies may take a cue from government action at the talks to make their own commitments, Vinson & Elkins’ Peloso said. Royal Dutch Shell plc committed to climate targets as the 2018 talks in Poland got underway. Dozens of companies announced emissions reductions at the 2019 Madrid talks, including International Airlines Group.
“We have seen a shift over time to much higher expectations for private governance—that we allow in our society the rise of these global megacorporations that in many ways have as much heft as the governments do,” Peloso said.
Companies are under as much intense scrutiny as governments for their contribution to climate change, and corporations could make climate announcements to coincide with the talks, she said.
“One thing I try to watch very carefully: How are the commitments governments making not only going to flow back through to the kinds of clients we have” in terms of new regulations, but whether corporate clients will signal that they’ll make more ambitious climate commitments than governments, Peloso said.
Coalitions of local governments and organizations will be pivotal to COP26’s impact because the U.S. and some other highly-polluting countries have tenuous domestic political support for the climate goals they’re bringing to Glasgow.
The U.N.-sanctioned Race to Zero campaign is one to watch, Bodansky said. It’s composed of thousands of cities, universities, investors, and businesses promoting net-zero initiatives globally ahead of the summit. “COP26 is the focal point for all those political efforts,” he said.