Financial market needs to accelerate implementation of climate agreement

Financial market needs to accelerate implementation of climate agreement

COP26 political agreements to mitigate climate change did not quickly translate into action, analysts point out.

As a result, the forecast of limiting the increase in global temperature to 1.5ºC should not be reached. In this wake, the financial market is highlighted as an accelerator of the commitments adopted at the conference, held last year in Glasgow.

The topic was discussed at the first table of the seminar Brazil and the World After COP26, on Wednesday (6). The event was organized by Folha, with the support of the Open Society Foundations. The moderation was by journalists Marcelo Leite, columnist for Folha, and Cristiane Fontes.

Carlos Nobre, a Brazilian scientist who is a member of the Royal Society, warned of a study by the British meteorology service that points to a 48% risk of the planet warming 1.5ºC by 2026.

The study, released in May, links warming to an eventual El Niño in the coming years. The phenomenon raises the temperatures of the planet’s waters.

Although the projections by the British body do not come to pass, Nobre estimates that the limit set for global warming will be reached at the beginning of the next decade. “Countries made promises at COP26, but none of this is going in that direction. We have to assume that this limit will be exceeded in less than 12 years,” he says.

The IPCC (Intergovernmental Panel on Climate Change) estimates that, to limit global warming to 1.5°C, carbon emissions cannot exceed 400 billion tons. The emission of gas today is 40 billion per year.

Watch the first below seminar table:

Among other measures, the text of COP26 regulated the carbon market and recognized the need to reduce emissions by 45% by 2030. Brazil’s goal was greater: to reduce pollutant gas emissions by 50% by the end of the decade and neutralize the emission of carbon until 2050. The Brazilian objective, however, does not exceed the stipulated in 2015, in the Paris Agreement.

Nick Bridge, special representative for climate change at the UK Foreign Office, admits that the Glasgow accords were not enough.

One of the disappointments is linked to the conquest of China and India to exchange the term “elimination” for “reduction” of coal, the burning of which releases CO2.

With the Ukrainian War, Europe increased the burning of coal to offset the sanctions on fuel coming from Russia. In the same vein, the US loosened economic blockades against Venezuela, a major oil producer.

According to Bridge, the main objective of the conference was to attract the financial market. “Sustainable agriculture is at the heart of the COP26 presidency. It is a demand that comes from consuming countries and not just from those who offer.”

Graham Stock, strategist at Bluebay Asset Management for sovereign bonds in emerging markets, is also wary of fulfilling the promises of nations – including Brazil.

“There is no way to get emissions to zero without reducing deforestation, and the number of fires and deforestation in the country has increased in recent months,” he says.

The Amazon had the second largest deforestation recorded in a month of May since 2016, according to Inpe (National Institute for Space Research). 899.64 km² of forest were cut down. The worst numbers were those of last year. Today, the Amazon emits more CO2 than it absorbs, according to research published in the journal Nature last year.

For Stock, one of the ways to accelerate the conference’s commitments lies in the transparency of financial institutions. According to him, the funds must present the amount of carbon emissions from their investment portfolios and favor green companies.

Developing countries charge richer nations a fund of US$ 100 billion (about R$ 534 billion) for investments in sustainable actions. The discussion has been on the agenda since 2009 and the amount should have been made available by 2020. At COP26, an agreement was reached that the deadline will be extended until next year.

“Africa, for example, is a continent not only impacted by climate change, but also the continent that has the fewest resources to deal with this crisis. The main impact today is food insecurity”, says Elizabeth Wathuti, an activist for Kenya and founder of the Green Generation Initiative.

She is one of the advocates of funding from rich countries to less developed ones. “At every summit, we see the same thing: a pattern of commitments that are made but not kept.”

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