Glasgow Delivers — But Delivers What?
COP26 concluded on 13 November 2021 in Glasgow, one day behind schedule, with the adoption of the Glasgow Climate Pact. UK COP President Alok Sharma, visibly emotional, described the outcome as reflecting "the mood in the room." That mood was a mixture of relief at reaching agreement and frustration that the agreement fell short of what the climate emergency demands.
For the GCC, COP26 produced three categories of outcomes: those that create immediate obligations or opportunities, those that signal the direction of future policy, and those that remain unresolved despite six years of negotiation since Paris.
The Glasgow Climate Pact: Key Provisions
Fossil Fuel Language — A Historic First
For the first time in the 26-year history of the UNFCCC COP process, the final decision text explicitly references fossil fuels. The Glasgow Climate Pact calls for "accelerating efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies."
Two linguistic details are significant:
- "Phase-down" not "phase-out": The original draft text called for the "phase-out" of unabated coal power. India, supported by China, insisted on changing "phase-out" to "phase-down" in the final hours of negotiation. This weakened the commitment but still established the principle that fossil fuel reduction is part of the COP lexicon.
- "Unabated" qualifier: The qualification "unabated" means that coal power with CCS is excluded from the phase-down call. This is significant for GCC states promoting CCS as a pathway to continued fossil fuel use.
The reference to "inefficient fossil fuel subsidies" is also carefully circumscribed. The qualifier "inefficient" provides substantial room for GCC states to argue that their energy subsidies serve legitimate social and economic purposes and are therefore not "inefficient."
Strengthened NDC Cycle
The Glasgow Climate Pact requests Parties to "revisit and strengthen" their 2030 NDC targets by the end of 2022, rather than waiting for the standard five-year cycle. This creates pressure on all countries, including GCC states, to increase near-term ambition. For Qatar, which submitted its NDC targeting a 25% GHG intensity reduction by 2030, this may prompt consideration of whether the target is sufficient.
Methane
While the Global Methane Pledge (30% reduction by 2030 from 2020 levels) was launched at COP26, it is a voluntary initiative outside the formal UNFCCC framework. Over 100 countries signed, but notably Saudi Arabia, Qatar, and other major gas-producing nations did not. The methane pledge is nonetheless significant because it signals accelerating international attention on methane as a potent short-lived climate forcer.
For Qatar, the world's largest LNG exporter, methane emissions from gas production and liquefaction are a material concern. QatarEnergy has invested in reducing flaring and fugitive emissions, but the absence from the Global Methane Pledge leaves Qatar exposed to criticism and potential market disadvantage as buyers increasingly scrutinise the lifecycle carbon intensity of LNG.
Article 6: The Carbon Market Rulebook
Perhaps the most consequential COP26 outcome for the GCC is the adoption of rules for Article 6 of the Paris Agreement, which governs international carbon market mechanisms. After six years of negotiation, the three sub-articles are now operational:
Article 6.2: Cooperative Approaches and ITMOs
Article 6.2 establishes the framework for bilateral or multilateral carbon credit trading between countries through Internationally Transferred Mitigation Outcomes (ITMOs). Key features include:
- Corresponding adjustments: Countries that transfer ITMOs must apply corresponding adjustments to their national emissions inventories to avoid double-counting. If Qatar sells carbon credits to Japan, Qatar must add those emissions to its own tally (or subtract them from its claimed reductions).
- Authorisation: Countries retain sovereign discretion over whether to authorise the transfer of mitigation outcomes. There is no obligation to participate.
- No centralised oversight: Article 6.2 is a decentralised mechanism with limited UNFCCC oversight, relying on transparency and reporting requirements.
Article 6.4: The New Carbon Credit Mechanism
Article 6.4 establishes a new centralised carbon crediting mechanism, succeeding the Clean Development Mechanism (CDM) from the Kyoto Protocol. Key decisions include:
- Supervisory Body: A new Supervisory Body will govern the mechanism, develop methodologies, and approve projects.
- Transition of CDM credits: Existing CDM credits from projects registered after 1 January 2013 can transition to the Article 6.4 mechanism, subject to conditions. This was contentious, with concerns about flooding the market with legacy credits.
- Share of proceeds for adaptation: A 5% levy on Article 6.4 credits will fund the Adaptation Fund, and a 2% cancellation for "overall mitigation in global emissions" (OMGE) is required.
Article 6.8: Non-Market Approaches
Article 6.8 establishes a framework for non-market approaches to sustainable development, including technology transfer and capacity building.
Implications for the GCC
Carbon Credit Opportunities
The operationalisation of Article 6 creates opportunities for GCC states to participate in international carbon markets:
| Opportunity | Mechanism | GCC Relevance |
|---|---|---|
| CCS credit generation | Article 6.4 (if methodology approved) | High — GCC has CCS projects and geological storage |
| Bilateral carbon credit agreements | Article 6.2 ITMOs | High — Japan, South Korea, Switzerland seeking credits |
| Blue carbon (mangroves, seagrass) | Article 6.4 or voluntary markets | Moderate — Gulf coastal ecosystems |
| Renewable energy credits | Article 6.4 | High — large-scale solar deployment underway |
| Hydrogen export with embedded credits | Article 6.2 | Emerging — depends on methodology |
Corresponding Adjustment Implications
The corresponding adjustment requirement creates a strategic tension for GCC states. Selling carbon credits internationally is commercially attractive, but the seller must adjust its own emissions inventory upward. For countries with NDC targets to meet, selling credits makes it harder to demonstrate domestic progress. GCC states will need to carefully balance revenue from credit sales against their own NDC compliance.
Voluntary Carbon Market Interaction
The Article 6 rules interact with the rapidly growing voluntary carbon market (VCM). Companies purchasing voluntary credits for corporate net zero claims will increasingly demand credits with corresponding adjustments to ensure environmental integrity. This could channel VCM demand toward Article 6-compliant credits, benefiting GCC projects that meet the standard but potentially disadvantaging projects that do not.
What Was Not Resolved
Despite progress, COP26 left significant unfinished business:
- 1.5°C gap: Even with updated NDCs, the world is on track for approximately 2.4°C of warming by 2100. The Glasgow Pact acknowledges this gap but does not close it.
- Climate finance: The $100 billion per year commitment from developed countries remains unmet. A new, higher climate finance goal is to be set by 2024.
- Loss and damage: Developing countries' demands for a dedicated loss and damage finance facility were not met, though the topic was included in COP decision text for the first time.
- Adaptation: While the Glasgow-Sharm el-Sheikh work programme on the global goal on adaptation was established, concrete adaptation finance commitments remain inadequate.
Practical Steps for GCC Organisations
COP26's outcomes create actionable implications for organisations in Qatar and the wider GCC:
- Monitor Article 6 implementation: The Supervisory Body's methodological work will determine which project types generate tradeable credits. Organisations with potential carbon credit projects should engage early.
- Assess methane exposure: Even without signing the Global Methane Pledge, GCC companies will face increasing buyer and investor scrutiny of methane emissions. Measurement and reduction programmes should be prioritised.
- Prepare for strengthened NDCs: The Glasgow request to revisit 2030 targets by end of 2022 may result in more ambitious national targets that cascade to corporate requirements.
- Engage with fossil fuel subsidy reform discussions: While the Glasgow language is weak, the trend toward subsidy reform is clear and will accelerate.
- Develop robust GHG inventories: Participation in carbon markets, whether compliance or voluntary, requires verified emissions data. Building measurement and reporting capacity is the foundational step.
GSustain is building the technical capacity to support Qatar-based organisations in GHG quantification, climate strategy development, and preparation for participation in emerging carbon market mechanisms. The post-Glasgow landscape creates both urgency and opportunity for this work.