The Baker McKenzie Global Climate Change practice expects 2020 to bring both scaled up developments and new challenges in a broad-based response to climate change.
Given widespread coverage of the shortcomings of last December's climate negotiations in Madrid, it may seem counterintuitive to anticipate positive movement on climate action this year.
Yet, in our view, there are several reasons why 2020 promises to be a milestone year for climate action and for increased confidence that 2020 will see enhanced flows of sustainable finance and mainstreaming of climate change into all aspects of public and private decision-making.
1 - First, while it is true that negotiators in Madrid failed to agree on operationalising the new market mechanisms under Article 6 of the Paris Agreement, the talks did produce some concrete results that will likely pave the way for agreement in the future, possibly later this year.
2 - Second, the meeting cemented the role of the private sector as a key driving force for climate action. Rapid uptake of climate policies and targets by some of the world's largest companies and investors is likely to be a key driving force behind what we expect to see this year, in terms of flow of funds towards investments with good climate credentials, and away from those with unacceptable climate risk.
3 - Third, an emerging focus on "nature-based" solutions, like forest protection and restoration projects, holds promise for communities, ecosystems, climate results, as well as investment outcomes. The Madrid meeting showcased "blue" carbon projects— efforts to use the oceans, rivers and wetlands to absorb and retain carbon dioxide.
4 - Fourth, popular concern about the impacts of climate change has never been higher. Greta Thunberg led a march of 500,000 people demanding climate action during the climate negotiations in Madrid, and only days later was made Time's Person of the Year for mobilising millions in the global School Strike for Climate Movement. Extinction Rebellion's civil disobedience campaigns have brought London to a standstill on a number of occasions. The ongoing bushfire crisis in Australia has galvanised alarm for the devastating social, environmental and economic impacts of climate change, and support for stronger climate policies.
While the negotiated outcomes in Madrid did not produce the level of ambition that civil society and many countries and business groups demanded, the halls of the conference venue were filled with countries and companies targeting net zero emissions. Increasingly, we are seeing a shared understanding that in order reach the long-term goals of the Paris Agreement, and limit global heating to 1.5 to 2 degrees, a clear pathway to net zero emissions by 2050 is necessary.
Finally, this year, we expect to see forceful and ambitious leadership from the United Kingdom and Italy, the hosts of this year's United Nations climate talks in November. With high levels of support from governments, the private sector, and civil society, we think it is possible that negotiators will finalise the rules for new market mechanisms under the Paris Agreement by the end of this year.
Beginning with an overview of December's meeting of the Conference of the Parties to the United Nations Framework Convention on Climate Change—known as COP 25—this report provides a guide for what we believe will be the key trends and developments in 2020.
Notably, one of the trends is the "mainstreaming" of climate change into all aspects of decision-making, both in the public and private contexts. Climate policy and action is now relevant to decision-makers in all areas of government and business. We consider key trends in relation to:
- New climate change laws around the world;
- Commitments to reach net zero emissions by 2050;
- Carbon markets;
- Climate disclosures;
- Technologies to watch; and
- Climate adaptation, including building and financing resilient, low carbon infrastructure.
Please do not hesitate to contact us if you have any questions, concerns or would like any further information in relation to climate change law, policy and market practice and developments.