The European Parliament (EP) adopted its position on the United Nations COP26 Climate Change Conference in Glasgow, which is scheduled to take place from October 31, 2021 to November 12, 2021. Expressing concerns about the ongoing climate situation, the Members of the European Parliament called for an accelerated pace of climate action. They also call on the European Commission to create an international climate club with other major greenhouse gas emitters, with the aim of setting common standards and raising ambition across the globe, including through a common carbon-border adjustment mechanism.
Members of the European Parliament expressed concern that the national targets announced in Paris in 2015 would result in warming well above three degrees by 2100, compared to the pre-industrial levels. Thus, to accelerate the pace of climate action, members of the European Parliament want European Union to replace the current ten-year plan with a five-year timeframe for all countries. They also say that all direct and indirect fossil fuel subsidies should be phased out in the EU by 2025 and call on all other countries to take similar measures. Members of the European Parliament say that developed countries must deliver on their promise to raise at least USD 100 billion in climate finance per year for developing countries, increasing that amount from 2025, when emerging economies should also start to contribute. A roadmap outlining each developed country’s fair contribution to this financing plan should be agreed. They also want to ensure that all developing countries can participate in COP26 despite COVID-19 restrictions. Additionally, G20 nations should show global leadership and commit to achieving climate neutrality at the latest by 2050, according to the members of the Parliament.
The Members of the European Parliament also welcomed the return of the U.S. to the Paris Agreement and President Biden’s commitment to cut U.S. greenhouse gas emissions in half by 2030 compared to 2005. The Parliament members expect concrete policy measures and financing to meet this goal. While they acknowledge China’s willingness to be a constructive partner in global climate negotiations, they are concerned with the country’s dependency on coal. They underline their position that China should increase its ambition and that its climate targets should cover all greenhouse gas emissions and not only carbon-dioxide emissions. Given the delays and difficulties caused by the COVID-19 pandemic and taking into account uncertainties about how much progress can be made in Glasgow, it will be critical that climate change stays high up on the political agenda in 2022 and that governments and civil society work on new and ambitious solutions in response to the increasing risks and impact associated with climate change.
Keywords: Europe, EU, Banking, Insurance, Securities, Climate Change Risk, COP 26, ESG, G20, China, US, Low-Carbon Economy, European Parliament
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous ArticleBIS to Launch Asian Green Bond Fund Early Next Year
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.