Rodolfo Lacy on what needs to be achieved in the lead up to COP26

To mark the 5th anniversary of COP21 and the Paris Agreement, Climate Action caught up with Rodolfo Lacy, Director, Environment Directorate at OECD, to discuss what needs to be achieved in the lead up to COP26.

In your view, what is the single best thing that has been achieved since COP21 in Paris in 2015?

With the adoption of the Paris Agreement countries committed to submit Nationally Determined Contributions outlining their domestic climate commitment; to renew these commitments every five years; and to increase the level of ambition over time. This focus on country ownership and leadership was welcomed by countries as reflected by the fact that 190 Parties had submitted their INDCs ahead of the signature of the Paris Agreement in April 2016.
While the initial set of NDCs put us on a path well above the 2°C target, recent announcements by major emitters on their net zero commitments suggest that countries are upping their game. But there is no scope for complacency. Urgent action is needed.

What achievement or project have you been most proud of being part of since COP21?

As a major contribution to COP21 in 2015, the OECD produced the first assessment of progress made by developed countries towards the goal of mobilising USD 100 billion per year by 2020 in climate finance for developing countries. We knew this would be difficult and politically contentious and it was. The COP Presidencies asked us because they saw it as an essential contribution to making an Agreement at COP21 possible.

Over the years the OECD has established itself as the reference point on this issue. Even if some countries do not agree on the definitions, it is still helpful to shed light on how much money is committed, to whom, on what terms and for what purposes.

• In November 2020, we published the third such assessment based on a transparent and consistent accounting framework.
• In our most recent assessment we  deepened out analysis of the underlying characteristics of the finance, critical in informing ongoing discussions on the post-2020 finance target.
• This sort of rigorous and transparent analysis is needed to build the trust needed to make progress on climate.  

Beyond the focus on the USD 100 billion, the OECD has also over the years been calling for the greening of the broader financial system and here I am particularly proud of our annual Forum on Green Finance and Investment which, since 2014, has played an important role in taking this agenda forward.

The OECD-IEA Climate Change Experts Group has been supporting the climate negotiations for over 25 years, in different configurations. It provides a valuable neutral space in which negotiators from different groupings can explore politically important technical issues based on high quality analytical papers.

Outcomes of COP21 placed particular focus on:

• Ensuring increased transparency in the measuring and reporting of greenhouse gas emissions
• The provision of financial resources and technology from developed to developing countries
• The importance of conservation and enhancement of forests and other biological carbon reservoirs

What topic would you like to see focused on at COP26 and why?

Clearly, COP26 has the challenge of finalising the negotiations on the enhanced transparency framework needed to underpin the effectiveness of the Paris Agreement over time.
Beyond that, the UK Presidency’s priorities are very timely: a major focus on adaptation and Nature based Solutions; a focus on finance; on the links between climate change and biodiversity; and on specific options for reaching net zero such as electric vehicles and seizing the opportunities presented by cheaper renewables and storage.

What are you most excited about in regards to COP26?

I am encouraged by the emphasis the COP26 Presidency is placing on both adaptation and nature. The Paris Agreement gave for the first time equal political priority to adaptation and mitigation. This was a major step forward in recognising the severe, and in some cases existential threats posed by climate change for large parts of the world’s population. Yet the donor community is still catching up with this new reality. The OECD’s update on developed country progress in providing and  mobilising climate finance for climate action in developing countries showed that despite steady progress at an aggregate level in 2018, totalling USD 78.9 billion, too little of this money was for the poorest and most vulnerable with over 70 percent spent on mitigation, rather than adaptation.

Mark Carneys role in the finance agenda is also very exciting. This has sent a hugely important signal to the financial community that climate change is for real and they had better take it seriously. The OECD has been a pioneer in this area, and I like to think that our annual Global Forums on Green Finance and Investment have made a significant contribution to pushing this agenda to the level it is today. The OECD was also involved in the EU Technical Expert Group that developed the taxonomy and is a member of its International Platform on Sustainable Finance as well as being represented in several other relevant initiatives, such as the Network of Central Banks and Supervisors for Greening the Financial System.  

2020 has been described as the beginning of the ‘decade of change’. However, the Climate Clock suggests we have just over 7 years. Clearly it is Time to Act. But what are your thoughts? Do we have a decade to deliver or is it in fact 7 years?

What is becoming increasingly clear is that time is running out and the time for action is now. Every year we set new temperature records and we are increasingly witnessing the potentially devastating impacts of climate change, many of which we do not yet understand the full implications (e.g. the release of that frozen methane deposits in the Arctic Ocean, forest fires in Siberia). Achieving a 1.5°C target looks extremely challenging but we should try to get as close to that as we possibly can. The IPCC report on Global Warming of 1.5 degrees made clear that even tenths of a degree make a huge difference in terms of the expected severity of climate impacts.

What are the three things you think we should prioritise in the next 12 months to ensure we have a chance of meeting 2030 emission reduction targets?

It is imperative that we seize the opportunity to use the unprecedented scale of public stimulus packages being prepared around the world is a one-off opportunity to accelerate the transition towards net-zero emissions and address wider socio-economic goals in an integrated way.

Our tracking of recovery measures points to some exciting and potentially game-changing investments in a green economy. But the overall balance is not encouraging, with governments channelling the lion’s share of support to incumbent fossil industries.

The transition must leave no-one behind. As part of this, climate policies, including carbon pricing, need to be both ambitious and progressive – i.e. protecting the most vulnerable.
Political commitment must be complemented by implementation on the ground. Targeted climate initiatives have a role to play. As called for by the Paris Agreement, all investments and financing need to become aligned with climate objectives, across both the real economy and financial markets. This requires robust and transparent assessment methods. The EU has been leading the way on this with its taxonomy but we are seeing similar developments around the world. Importantly, such developments need to tackle the sensitive issues of misaligned and transition finance.

The world has come so far in the last decade and the next 10 years are a fantastic opportunity to achieve great things. But we must act now and the world must come together in order to meet targets set out in the Paris Agreement. In what ways do you think the world/our day to day life will look different in 2030?

The COVID-19 pandemic and the associated restrictions on the way of life for large segments of the populations has highlighted how vulnerable we as a society are to risks and how drastically our ways of life can change. We have at the same time seen how individuals, communities and sectors have taken innovative approaches to adjust to the new circumstances. I imagine we will see some of these behavioural changes persist but I also expect that the innovative and entrepreneurial approach to addressing the current crises will benefit climate action in the future.  

What is the one most important thing in your eyes, that needs to be achieved by 2030?

Progress towards net-zero transition  =45% to 70% reduction in GHG emissions relative to 2010 levels.