A Guide to Glasgow: How to avoid losing your mind over COP26

The world's great and the good have gathered in Glasgow, accompanied by tens of thousands of earnest activists, curious onlookers and showponies, and that means there's going to be lot of media attention. Reporters are going to be hunting for angles, and the most obvious one is WILL THEY SAVE THE WORLD? Spoiler alert: they won't, but that's not really why they're all there. We thought we'd save you the anguish, with a quick guide to what really matters.

The most important thing to understand is that this is not actually a planet-saving meeting, but instead a hefty 'click' in a climate ratchet mechanism that's already well underway. When the Paris Agreement was signed in 2015, it started a clock that meant every five years, countries have to raise their ambitions on cutting emissions. That's because there's still a huge gap between what countries have committed to do what's ultimately needed.

In the leadup to COP26, we've heard a lot about how big that gap is. What you probably haven't is that it's a lot narrower than it used to be. Don't buy into the doomism. In the intervening years there's been a ton of progress. Before Paris we were on track for 4°C. Current policies now have us on track for 3°C and the newly announced pledges get us to 2.4°C. That's still too hot. But it shows the ratchet mechanism is working. Countries representing over 80% of global GDP and 70% of global emissions have now pledged net zero by 2050 or, in the case of China, Saudi Arabia and a few others, 2060.

Most takes you're going to see in the next few weeks are going to be about how it's all so difficult and who's winning and who's losing and what's going wrong and eventually, how COP26 was a failure and a stain on the human race. In one way, they will be right. We should have started this 20 years ago, not five. We've left things too late to avoid some pretty bad impacts, and it looks like 1.5°C is now out of reach. But the failure narrative obscures a very important point: 2°C is definitely achievable now, and every 0.1°C we can squeeze in underneath that is a victory.

For COP26, look out for the specifics. Pay particular attention to anything about rules for a global carbon market. Any progress on that front, and on who gets to count what carbon reductions where, unlocks enormous amounts of finance. Extra commitments in finance for developing countries are important too; rich countries have stumped up around $80 billion so far, which is not far off the $100 billion agreed at Paris, but we're going to need more. Oh, and watch out for any announcements on methane, and the creation of a ratchet-style mechanism that could place more pressure on the gas industry.

In terms of new commitments on emissions reductions, you can pretty safely ignore everyone except for China, India, the US and Europe. Where they go, others will follow. China in particular has an outsized importance - it emits the same amount of carbon as the US, Russia and Japan combined. Keep that in mind when everyone is doing their handwringing. Petrochina’s emissions alone are estimated to exceed that of Vietnam and South Korea combined, and one of Sinopec’s units spews more CO2 than all of Canada. If China makes even the tiniest commitment or shifts its position by a fraction, that's very, very good news.

Don't forget too, that the battle to wind down the fossil fuel industry proceeds on two tracks: the political and the financial. Follow the money! The pace of innovation in technology, the underlying rate of cost reductions in clean solutions, and the awakening of the global financial sector to climate finance are just as important as individual country pledges. Global capital markets have already put an effective carbon tax of around $80-$100 per tonne on gas, oil and coal projects by increasing the cost of capital - and those prices are going to feel like the good old days for fossil fuels executives even a year from now.

On this front, keep an eye out for any more announcements by large institutional investors. They all now see very clearly that fossil fuels are a bad bet, and they want out. As the financial tides recede, the whales of the old economy will be left stranded on the beach, and it's going to happen far sooner than anyone realises. Divestment is an essential building block of financial logic that opens the door for a decarbonized economy, and it's arguably the best climate news story out there right now. There's a reason so many finance ministers are coming to Glasgow. Watch what they say.

Last but not least, ignore anything said by the Australian delegation.?Their promises have the same strength as a wet paper bag.

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