The Nickel Report

After over two weeks of conferencing, the 26th Conference of the Parties to the United Nations Framework on Climate Change (COP26) concluded with the finalization of the Glasgow Climate Pact (the “Glasgow Pact”) listing the accomplishments of the summit. The Glasgow Pact reaffirms the long-term global goals (including those in the Paris Agreement) to hold the increase in the global average temperature to “well below 2°C” above pre-industrial levels and to pursue efforts to limit temperature increase to 1.5°C above pre-industrial levels. It also states that limiting global warming to 1.5°C requires “rapid, deep, and sustained reductions in global greenhouse gas (GHG) emissions, including reducing global carbon dioxide emissions by 45 per cent by 2030 relative to the 2010 level and to net zero around mid-century, as well as deep reductions in other greenhouse gases.”

Carbon markets are tools that aim to cost-effectively reduce the emission of carbon dioxide (CO₂) and other greenhouse gases (GHG). The Paris Agreement sets a goal to keep the global average temperature from rising by 1.5°C (2.7°F) above preindustrial levels and, failing that, prevent it from rising 2°C (3.6°F). Carbon markets are viewed as the primary market-based vehicle to drive reduction in GHG emissions to meet the ambitious Paris Agreement goal.

On Earth Day, as expected, the Biden-Harris Administration continued its efforts to fulfill campaign commitments on climate change.  The big announcement came on what is called the “Nationally Determined Contribution” or NDC.  The Administration announced that the United States will aim to cut its greenhouse gas emissions from 2005 levels by 50% by 2030.  This reflects an increased commitment from the United States’ prior commitment of cutting emissions by 25% from 2005 levels by 2025.