by Fiona Clouder, Senior Advisor
COP26, Aspirations and Action
As COP27 is underway in Sharm-el-Sheikh, Egypt, what does this mean for the world of mining? What does this mean for a Net Zero world? Can the sector deliver in time and in quantity to meet the global demand for the energy transition?
COP stands for Conference of the Parties and is part of the UN (United Nations) system to bring the world together. Pivotal moments in the series of COPs under the UNFCCC (United Nations Framework Convention on Climate Change) include the Paris Agreement, adopted at COP21 in 2015 and the Glasgow Climate Pact agreed at COP26 in November 2021.
COP26 was held under the UK Presidency and nearly 200 countries came together to forge the Glasgow Climate Pact. The approach focussed on 4 overarching goals:
- Mitigation: reducing emissions
- Adaptation and Loss and Damage: helping those impacted by climate change
- Finance: enabling countries to deliver on their climate goals
- Collaboration: working together to deliver greater action
The commitments made kept the prospect alive of limiting global temperature rises below 1.5 degrees, compared to pre-industrial levels.
The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21 in Paris, on 12 December 2015 and entered into force on 4 November 2016.
Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.
To achieve this long-term temperature goal, countries aim to reach global peaking of greenhouse gas emissions as soon as possible to achieve a climate neutral world by mid-century.
The Paris Agreement is a landmark in the multilateral climate change process because, for the first time, a binding agreement brings all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects.
COP26 outcomes at a glance
|Mitigation||Adaption, loss and damage||Finance||Collaboration|
As well as the traditional core of specialist negotiations, the UK approach also embedded the approach in the real economy, linking with not only governments, but also business and civil society, including through the Race to Zero and Race to Resilience campaigns. Race to Zero now has over 11,000 entities from over 100 countries committed, through partner initiatives including: 52 regions, 1,136 cities, 8,307 companies, 595 financial institutions, 1,125 educational institutions and 65 healthcare institutions.
Commitments were made to accelerate the energy transition, halt and reverse forest loss, speed up the switch to electric vehicles and reduce methane emissions. Progress was also made on the urgent need for adaption and action on loss and damage, particularly for the most vulnerable and developing countries. This is also a big theme of COP27.
The global shift to net zero requires trillions of dollars of investment and COP26 sought to mobilise both public finance and public-private models. Under GFANZ (the Glasgow Financial Alliance on Net Zero) encompassing 550 institutions with over US$150 trillion of assets under management, private financial institutions and central banks have agreed to realign investments towards Net Zero.
As defined by the UN, Net Zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere, e.g. by oceans and forests.
Net zero commitments must be backed by credible action
What is net zero?
Put simply, net zero means cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere, by oceans and forests for instance.
Why is net zero important?
The science shows clearly that in order to avert the worst impacts of climate change and preserve a livable planet, global temperature increase needs to be limited to 1.5°C above pre-industrial levels. Currently, the Earth is already about 1.1°C warmer than it was in the late 1800s, and emissions continue to rise. To keep global warming to no more than 1.5°C – as called for in the Paris Agreement – emissions need to be reduced by 45% by 2030 and reach net zero by 2050.
How can net zero be achieved?
Transitioning to a net-zero world is one of the greatest challenges humankind has faced. It calls for nothing less than a complete transformation of how we produce, consume, and move about. The energy sector is the source of around three-quarters of greenhouse gas emissions today and holds the key to averting the worst effects of climate change. Replacing polluting coal, gas and oil-fired power with energy from renewable sources, such as wind or solar, would dramatically reduce carbon emissions.
Is there a global effort to reach net zero?
Yes, a growing coalition of countries, cities, businesses and other institutions are pledging to get to net-zero emissions. More than 70 countries, including the biggest polluters – China, the United States, and the European Union – have set a net-zero target, covering about 76% of global emissions. More than 3,000 businesses and financial institutions are working with the Science-Based Targets Initiative to reduce their emissions in line with climate science. And more than 1000 cities, over 1000 educational institutions, and over 400 financial institutions have joined the Race to Zero, pledging to take rigorous, immediate action to halve global emissions by 2030.
Source: United Nations
Over 90 percent of the global economy is now covered by a Net Zero target, up from less than 30 percent when the UK took on the COP26 role. The biggest companies and financial institutions in the world have committed to Net Zero. Jobs and new businesses are being created through the transition to a Net Zero world.
At the COP26 World Leaders Summit, 45 countries accounting for over 70% of global GDP endorsed the Breakthrough Agenda, committing to work together to make clean and sustainable solutions the most affordable, accessible and attractive option in each of the top emitting sectors before the end of this decade. The Glasgow Breakthroughs focus on Power, Road Transport, Steel, Hydrogen and Agriculture – collectively sectors responsible for more than 50 percent of global emissions. Addressing these could support the creation of more than 20 million jobs by 2030; increase world GDP by 4% more than would otherwise be the case; save approximately 2 million lives worldwide.
The 2030 Breakthroughs are the first set of global leader-led common targets under The Breakthrough Agenda.
The commitments set ambitious goals for 2030 to dramatically accelerate the innovation and deployment of clean technologies in five key sectors of the economy: Power, Road Transport, Steel, Hydrogen and Agriculture.
The 2030 Breakthroughs aim to make:
As well as transformation to get to Net Zero, the reality is that climate change is happening and already affecting millions of people. Action and investment is needed to help people adapt to the impacts of climate change and future climate shocks and this is a big theme of COP27. Around half of the world’s population is ‘highly vulnerable’ to the impacts of climate change, with those in highly vulnerable regions 15 times more likely to die due to floods, droughts, and storms compared to regions with very low vulnerability.
The Adaptation and Resilience Breakthrough 2030 Outcome Targets 1 include: increasing yields and reducing emissions through climate resilient, sustainable agriculture; halving the share of food production lost; conserving land and inland water whilst securing indigenous & local communities rights; by 2025 financial institutions eliminate commodity-driven deforestation from portfolios; 1 billion people to have better design, construction and access to finance to live in decent, safe homes; smart & early warning systems to reach 3 billion people; securing the future of 15 million hectares of mangroves globally by 2030; a diverse set of energy generation sources to enable affordable access to electricity for 679 million unconnected people and higher quality access for 1 billion underserved people through climate resilient energy systems; 2.2 billion people to have access low-cost, clean vehicles and mobility solutions through the expansion of affordable public and private transport services; 10,000 cities to have evidence-based, actionable adaptation plans.
Action at COP27
Discussions in COP27 take place in Sharm el-Sheikh, Egypt from 6-18 November 2022, with the key aim of ensuring full implementation of the Paris Agreement. The context has shifted. The Egyptian COP27 Presidency wants to focus the world’s attention on key elements that address some of the most fundamental needs of people everywhere, including water security, food security, health and energy security.
A report published by UN Climate Change ahead of COP27 showed that whilst countries are bending the curve of global greenhouse gas emissions downward, efforts remain insufficient to limit global temperature rise to 1.5 degrees Celsius by the end of the century 2. Many places are already living the reality of climate change, contending with increased devastation from floods and storms, severe droughts, and unprecedented heatwaves. Crises in energy, food, water and the cost of living confront millions, against a backdrop of geopolitical conflicts and tensions.
The transition to Net Zero needs to happen faster to avoid the worst impacts of climate change. The UN Secretary General, António Guterres has said:
In his opening address at COP27, the UN Climate Change Executive Secretary, Simon Stiell asked Governments to focus on three critical areas:
- A transformational shift to implementation of the Paris Agreement and putting negotiations into concrete actions
- Cementing progress on the critical workstreams of mitigation, adaptation, finance and loss and damage, while stepping up finance to tackle the impacts of climate change
- Enhancing the delivery of the principles of transparency and accountability throughout the UN Climate Change process
From Aspiration to Action to Reality
Progress is being made in moving and aligning the world to take action to address climate change, both by reducing emissions and by adapting and developing resilience to climate impacts. Whether progress is being made fast enough is another question. There are stark warnings in the latest reports from the UN 3, the IPCC 4, the World Meteorological Organisation.5
What climate change really means
There is a serious reality gap of the degree and rate of action against previous commitments and aspirations. As part of COP27 there will be a ‘Global Stocktake’ – mechanism to assess the world’s collective progress towards fulfilling the Paris Agreement. It will assess progress on mitigation, adaptation, and means of implementation and support. It will also consider the social and economic consequences of measures taken and efforts to address loss and damage – the last likely to be a big theme at COP27. Outcomes from the Global Stocktake will inform the negotiations, future national planning and international co-operation to increase the rate of action and implementation.
A further reality gap is even if action is taken in line with aspirations and commitments, whether in particular the mining sector can supply the rising global demand for minerals in the timescale available. Also how this can be done in a way commensurate with nature, biodiversity and local communities. Discussion is needed urgently between the environmental world, the mining world and the finance world.
As shown in this graphic from the UN Synthesis report 6, in their planning for NDCs, showing reduction of greenhouse gas emissions, countries are focussing on energy supply, transport, building and agriculture measures. To address those sectors needs minerals. Minerals used in power distribution, electricity production, transportation fuels, battery technology, cars and aircraft, construction, buildings, infrastructure and fertilisers.
Priority areas for mitigation actions in countries nationally determined contributions
Source: UNFCC Synthesis Report – Nationally Determined Contributions Under the Paris Agreement
Mining itself is a sector that is making progress in decarbonisation. This can reduce the cost of capital, help companies in their profile to investors and customers and open up access to ESG funding. The ICMM (International Council on Mining and Metals) which brings together a third of the global metals and mining industry, set out a commitment, on behalf of its members to Net Zero by 2050 or sooner:
Net zero commitment
The ICMM also highlights that the ‘green’ version of anything means more metals, but promotes mining with principles, setting out strategic priorities on climate and environmental resilience, social performance, governance and transparency and innovation for sustainability.7
The World Bank has also developed an approach to encourage ‘Climate-Smart Mining’:
In 2017 the World Bank report The Growing Role of Minerals and Metals for a Low-Carbon Future8 flagged that a low-carbon future will be significantly more mineral intensive than a business as usual scenario. It stated “Global demand for “strategic minerals” such as lithium, graphite and nickel will skyrocket by 965%, 383% and 108% respectively by 2050. While the growing demand for minerals and metals offers an opportunity for mineral-rich developing countries, it also represents a challenge: without climate-smart mining practices, the negative impacts from mining activities will increase, affecting vulnerable communities and environment.“ The predictions were based on a 2 degree scenario. For a 1.5 degree goal the demand is even greater.
The 2020 World Bank Group report, Minerals for Climate Action: The Mineral Intensity of the Clean Energy Transition 9 stated that the production of minerals, such as graphite, lithium and cobalt, could increase by nearly 500% by 2050, to meet the growing demand for clean energy technologies. It estimates that over 3 billion tons of minerals and metals will be needed to deploy wind, solar and geothermal power, as well as energy storage, required for achieving a below 2°C future.
In moving to a Net Zero world in 2022 Wood Mackenzie set out predictions for demand in base metals – a doubling in demand for copper and nickel and tripling in demand for aluminium.
Gains to base metals consumption under an accelerated energy transition (AET-1.5) scenario
To meet battery demand for electric vehicles and energy storage by 2035, Benchmark Intelligence estimates more than 300 new mines could be needed in the next decade. Mines and mining operations have a long leadtime – finance, environmental permits, community consultation, as well as construction, before operations and production can start.
How many mines do we need
Source: Benchmark Minerals Intelligence
Fundamentally, who is thinking about the reality of the gap between aspiration and action? Are governments and investors thinking about the collective opportunity in a strategy way? How can policy makers, the mining industry, the energy producers, the climate negotiators, the finance world, the nature and biodiversity experts, and civil society organizations address these issues together?
Cooperation, collaboration, partnership
Some key questions
- Policy – How can an integrated approach be encouraged between policymakers on environment and energy issues with the mining sector and how do we close the gap in time?
- Supply – How does global planning to address climate change take into account supply of metals and critical minerals?
- Finance – What is the phasing of supply and demand to help the sector plan ahead and the finance to be in place, taking account of long leadtimes for mining operations? How can more innovative financing mechanisms be put in place?
- Skills – Are the right skills available in sufficient quantity in the labour force?
- Science – How can innovation, science and technology help advance this agenda?
- Planning – How are national governments ensuring both rigour and speed in environmental permits and community engagement?
”The energy transition requires a vast increase in mineral production - both base metals and critical minerals. Are we looking at the equation of what is needed versus the capacity of the mining industry to produce?Fiona ClouderQuestion to COP26 President at last keynote event before COP27, Wilson Centre, Washington, 14 October 2022
This is the opportunity of a generation. For emission-heavy business to decarbonise. For the industry to show this can be done in a way to safeguard the environment, conserve biodiversity and benefit communities. For the sector to meet the needs of a Net Zero world. Let’s do it together.
3. https://unfccc.int/documents/619180, https://unfccc.int/documents/619179
8. Arrobas,Daniele La Porta; Hund,Kirsten Lori; Mccormick,Michael Stephen; Ningthoujam,Jagabanta; Drexhage,John Richard. The Growing Role of Minerals and Metals for a Low Carbon Future (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/207371500386458722/The-Growing-Role-of-Minerals-and-Metals-for-a-Low-Carbon-Future