COP26: A Crisis, Coal and Corporate Law

Contuining our COP26, ClientEarth Conversation Series, we heard again from postgraduate research student David McKeown talking to James Thornton, CEO of ClientEarth and an Honorary Professor of Law – about the climate crisis, the impact of coal and how corporate law can and has influenced decision making in this area.

China and coal

David: This year has been and is going to be very important in terms of global meetings between certain multilateral legal agreements regarding the environment.

Firstly, what do you hope for and expect from the COP26?

James: What is more and more apparent to everybody is that the planet is in a crisis – a climate crisis is well described in the news most days as we see the fires and the floods and the droughts – and there’s also, less often in the news but equally important a biodiversity crisis or a nature crisis. We’re in the sixth grade extinction and we’re losing species very rapidly so the world needs to pay a lot of attention to these things.

“It may be the most important meeting that will happen for the planet in our lifetimes.”

In that the Paris agreement, which was concluded five years ago now was a global agreement where 197 countries, came together and agree that there was a climate crisis and agreed that a series of steps that they would take to meet it. Now, five years later, what this meeting is about is to try and take far further steps.

So the Paris agreement is a set of guidelines. People went back to their own countries, came up with their own plans. Those plans aren’t yet nearly enough to meet the goals of the Paris agreement, which is keeping climate within 1 degree, 1.5 degrees centigrade of where it was in pre-industrial times.

“So that 1.5 degree rise is already dangerous for civilisation. Unless much more is done, than has been done, unless much more is committed and then done, than has been committed and has been done, we go way beyond 1.5 degrees. If we do go way beyond 1.5 degrees, then the consequences are extremely severe for our society. And at a certain point, maybe 4 degrees or so, civilisation itself will begin to fray and potentially rupture.”

We can do very well in terms of meeting the Paris agreement, but to get back to your question, that takes a lot more commitment, and then following through on the commitments. The time to commit is in this meeting in COP26 meeting in Glasgow.

So what do I want from it? I want countries to agree to further cuts. In order to meet the 1.5 degree target, basically you have to have every country saying we’re going to reduce our emissions by 50 percent by 2030 and then all the way down to zero emissions by 2050.

That’s far from where the commitments are right now. And we need those we need those greater commitments.

David: I suppose in the context of something like COP26, this is where legal activism can really flourish in a sense, because the discussions that we’re having, sort of agreements that we’re trying to broker are ones that can be strengthened through a legal dynamic.

James Thornton and David McKeown

Going into Glasgow, is there any one thing in particular that you’re looking out for, or is it more across the spectrum?

Going into Glasgow what you really want to see is those countries really commit to reducing their emissions, much more than they have now. Commit as part of that to stopping the use of coal. They haven’t agreed to do that. And then the wealthy countries to agree to transfer quite a lot of money, well over 100 billion a year, to the developing world.

Now, will that happen? One is very hopeful. One can only be hopeful. There are some good signs. Let me say that there are some discouraging signs. The G7 countries got together in Cornwall this summer and one of the things they tried to do was to reach an agreement to stop the use of coal, even among themselves, those large economies and they couldn’t agree to do that. That was disappointing. It’s not final and nothing is ever final.

The hope is that there’s been a lot of energy put into it since, which there has, and we may see an agreement to have at least the top countries get over the use of coal.

A very important and positive thing happened last week. President Xi of China announced that there would be no more investment by China in building coal plants outside China. That was an enormous shift because one of the things that we, at ClientEarth have been most worried about and working on very hard is preventing the building of new coal plants and then shutting down existing coal plants through legal tools.

Inside China where we work, we were making the argument that coal is a bad investment as well. That’s an argument, a kind of corporate law investment argument that has worked in cases in courtrooms in Europe and in boardrooms in Japan.

We were making a similar argument to China saying there are all these climate reasons why you shouldn’t do it, but it’s also simply about investment. We actually wrote an economics memo with the Ministry of Environment on that point in or around January of this year.

It went all the way up to the top of the hierarchy. We received that a moratorium on building coal was placed outsdie China. Then in September, President Xi announced no new coal outside of China, so that’s hundreds potentially of coal plants that have been stopped – and going into the COP, that’s a very exciting signal.

One hopes that the developed countries will say, OK, China is building no coal outside so, over time, we’re going to commit to getting off coal ourselves. Unless the world gets out of coal, it’s going to be very hard to meet the Paris Agreement targets.

David: That example with China is a very good case study, almost in pragmatics and how you might approach it from one perspective, but also seeing the type of argument that’s going to work best for the context. In a way, that’s a real testament to a type of legal activism where you have to be pragmatic to try and get the best result. In this instance, it’s the best result for the planet. To see China make that sort of commitment is also really encouraging. I’m sure, for you that must have been a real victory.

James: Yes, it was very exciting. Just yesterday I was giving a speech in a meeting in Beijing, with Chinese officials and Westerners, and everyone was celebrating this victory. There is a Chinese government organisation called Greening the Belt and Road Coalition, and I’m part of that. There was a meeting where we were celebrating this big change in policy as a hugely dramatic step in the right direction.

We’ve needed some really big steps in the right direction, and this is one – and will encourage others, I hope it should do.

Find out more about our ClientEarth Conversation Series online where you can also book your place on the Environment and Energy Law Society roundtable to discuss the issues raised in the series with fellow staff and students.