EC Issues Update on Paris Agreement Commitments at COP26
The European Commission (EC) announced support for the consensus reached by over 190 countries after two weeks of intense negotiation at the end of the COP26 UN Climate Conference. Under the Paris Agreement, 195 countries set a target to keep average global temperature change below 2°C and as close as possible to 1.5°C. Parties have agreed to revisit their commitments, as necessary, by the end of 2022 to put the world on track for 1.5°C of warming, maintaining the upper end of ambition under the Paris Agreement. The EC President Ursula von der Leyen noted the progress on the three objectives that were set at the start of COP26: to get commitments to cut emissions to keep within reach the global warming limit of 1.5 degrees, to reach the target of USD 100 billion per year of climate finance to developing and vulnerable countries; and to get agreement on the Paris Rulebook.
The Paris Agreement was adopted in December 2015, entered into force on November 04, 2016, and has been signed by the 197 United Nations Framework Convention on Climate Change (UNFCCC) Parties, with 191 states and the European Union having now ratified it. The Agreement aims to avoid dangerous climate change by limiting global warming to well below 2°C above pre-industrial levels and by pursuing efforts to limit the temperature rise to 1.5°C and to make financial flows consistent with climate objectives. COP26 completed the technical negotiations on the Paris Agreement Rulebook, which fixes the transparency and reporting requirements for all Parties to track progress against their emission reduction targets. The Rulebook includes the Article 6 (of Paris Agreement) mechanisms that set out the functioning of international carbon markets to support further global cooperation on emission reductions. On climate finance, the agreed text commits developed countries to double the collective share of adaptation finance within the USD 100 billion annual target for 2021-2025 and to reach the USD 100 billion goal as soon as possible. Parties also commit to a process to agree on long-term climate finance beyond 2025. The COP also decided to establish a dialog between parties, stakeholders, and relevant organizations to support efforts to avert, minimize, and address loss and damage associated with climate change.
The European Union claims to be a global leader in climate action, having already cut its greenhouse gas emissions by over 30% since 1990, while growing its economy by over 60%. With the European Green Deal, which was presented in December 2019, the European Union further raised its climate ambition by committing to reaching climate neutrality by 2050. This objective became legally binding with the adoption and entry into force of the European Climate Law. The Climate Law also sets an intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to the 1990 levels. This 2030 target was communicated to the UNFCCC in December 2020 as the NDC under the Paris Agreement. To deliver on these commitments, the European Commission presented a package of proposals in July 2021 to make the climate, energy, land use, transport and taxation policies in European Union fit for reducing net greenhouse gas emissions by at least 55% by 2030. In addition, developed countries have committed to mobilize a total of USD 100 billion per year of international climate finance from 2020 until 2025, with European Union being the largest donor, contributing over a third of the current pledges, accounting for USD 27 billion of climate finance in 2020. President von der Leyen recently announced an additional EUR 4 billion from the European Union budget for climate finance until 2027.
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Keywords: Europe, EU, Banking, Paris Agreement, COP26, Climate Change Risk, ESG, Low-Carbon Economy, Paris Rulebook, EC
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