Glasgow's COP26 was an unusual COP (Conference of Parties) in a number of ways. First of all, it was held a year later than scheduled due to the coronavirus pandemic. Beyond that, governments negotiated in an economic environment characterised mostly by climate-focused reconstruction programmes and rapid economic recovery.

The new multilateral capacity to discuss the gradual phase-out of coal is a political achievement of COP26. In addition, new carbon footprint and transparency rules improve the measurability and comparability of global climate protection. Spelling out Article 6 of the Paris Agreement is providing the impetus for the global carbon market.

Much to the displeasure of many emerging and developing countries, key questions relating to climate finance, adapting to climate change and the issues around damage and losses remain largely unanswered. COP is emerging as the global platform for climate change initiatives with growing involvement from the business community. Among them are the Global Methane Pledge, the Green Grids Initiative - One Sun One World One Grid, the Agreement to End Deforestation by 2030, and the Glasgow Financial Alliance for Net Zero.

The agreement between the EU and the USA to lift tariffs in the steel and aluminium sector and the intended cooperation of common sustainability standards in this area could be an indication of the emergence of a climate club. The trade policy consequences of this could have a mitigating effect on the EU’s Carbon Border Adjustment Mechanism.

Read the entire Sustainability Monitor "COP26: A small step forward for climate protection" here as PDF.