CRU: COP26: Genuine Progress or Hot Air?

By CRU Economist Frank Eich and Sustainability Analyst Huan Chang, Nov. 22

The COP26 was heralded as a “moment of truth” in the race against climate change. In addition to the expected announcements, such as those on finance, there were also some unexpected ones, such as the pledges from the Indian government to address climate change. The latest pledges, if implemented in full, will bring us closer to reaching the important 1.5 °C pathway – but more needs to be done. While COP26 did not deliver any major breakthroughs, it helped entrench the so-called ratchet mechanism, which will require countries to return with more ambitious climate-change targets in the future. This is a good platform for further progress, starting with COP27 in Egypt in 2022. For the commodity markets, this means the pace of change is set to accelerate as policy, as well as financial, customer and community demands, respond to the growing need for action.