Next week sees the start of COP25, a two-week long international climate change conference that will attract politicians, policy makers, activists, business people and the odd celebrity from around the globe. This briefing, jointly authored by our climate change experts in Canada and the UK explains the key things that we can expect from COP25.

What Is COP25?

The United Nations Framework Convention of Climate Change's ("UNFCCC") 25th Conference of the Parties ("COP25") is being held in Madrid, Spain. Up to 25,000 representatives from the 197 parties to the UNFCCC are expected to attend COP25.

Up until very recently, COP25 was expected to be held in Santiago, Chile but the location was changed when the Chilean Government withdrew due to the current political unrest. Chile will still hold the presidency of COP25 however and will set the agenda and direction of the conference.

COP25 is intended to "tidy up" and finalise certain loose ends regarding the implementation of the Paris Agreement ahead of 2020, when COP26 is scheduled to take place (see below).

The blue COP

Chile's main focus for this COP is to highlight the role oceans could play in reducing greenhouse gases from the atmosphere. Oceans already absorb a vast amount of the carbon dioxide that enters the atmosphere and the rising sea levels and increasingly melting icebergs show its effect. Chile (which has a total marine estate of over 3.5 million square kilometres of ocean) is keen to show how the ocean can help reduce carbon emissions, by protecting and regenerating coastal ecosystems through marine protected areas and by harnessing the energy from the ocean by the use of tidal power.

What does COP25 mean for business?

Whilst the governments of sovereign nations and members of the UNFCCC will make the big decisions at COP25, the impacts of those decisions will fall significantly upon businesses and citizens. For some time, pressure from stakeholders has driven many businesses and large organisations to review their environmental footprints, pledge to cut their emissions, invest in green technologies and improve their sustainability performance - in each case, often most substantially than regulation has. We expect COP25 will only add to those pressures - consumers will demand deeper cuts, employees will demand faster action, shareholders will want to see more sustainable investments and lenders may shy away from lending to environmentally controversial projects, or 'price' risk more aggressively.

Ambitious targets for small and medium-sized emitters

We expect to see small and medium-sized greenhouse gas emitters working towards more ambitious targets with respect to their Nationally Determined Contributions. NDCs are the greenhouse gas emission reduction targets set by each country in order to reach the goals set out in the Paris Agreement (i.e. holding the increase in global average temperatures to well below 2 degrees Celsius above pre-industrial levels).

During September's 2019 Climate Action Summit, a group of 59 countries called the "Climate Ambition Alliance" expressed their intention to present new and more ambitious Nationally Determined Contributions by 2020. A further 11 countries, including Germany, France, and the United Kingdom, have begun the necessary processes in their national plans and policies to set more ambitious targets by 2020.

What about the carbon markets?

Businesses will have a keen eye on carbon markets during COP25. Article 6 of the Paris Agreement aims at promoting integrated, holistic and balanced approaches to assist governments in implementing their carbon reduction plans through co-operation. It was thought that this could be used to create a global carbon trading market, which would set a global carbon price - with large emitters of greenhouse gases having the decision to either invest in new carbon-reducing technologies, or purchase carbon allowances to surrender. All eyes will be on whether governments can agree a carbon trading scheme this year.

Will the USA be represented?

President Trump has previously declared that he intends to pull the USA out of the Paris Agreement, but that is highly dependent on the results of next year's federal election, as the effective date of withdrawal falls one day after the 2020 election.

Notwithstanding the uncertainty regarding federal involvement, interest in environmental issues remains high at state-level - in fact, Governors of 24 American States have joined together in the "US Climate Alliance" and have committed to implementing policies to advance the goals of the Paris Agreement.

We expect there to be a significant delegation from the USA attending COP25, predominantly from large cities, states, corporations and higher education.

Why is there little fanfare given the importance of COP25?

In previous years, there has been extensive media coverage leading up to UNFCCC conferences, but there appears to have been less hype this time around. This is particularly surprising given the current levels of interest in environmental issues - after all, 2019 has seen large-scale climate protests across major cities around the globe, and in the UK, Parliament has declared a climate emergency and legislated for net zero carbon emissions by 2050.

The relatively muted publicity may be connected with the last-minute change of venue and domestic political agendas - in Canada most of the media and political focus has been on the ongoing challenges to the federal government's Greenhouse Gas Pollution Pricing Act (one of Parliament's flagship laws in its effort to meet Canada's Paris targets) and in the UK, Brexit and the General Election in December are omnipresent.

The Greta phenomenon

For those of you who are not fortunate enough to be attending COP25, and despite the muted coverage so far, we expect high levels of media interest once the conference gets going.

Admittedly, the British press has the General Election and Brexit fighting for coverage, but there will inevitably be a big focus on the climate activist Greta Thunberg, who with the help of Australian "Youtubers", is sailing to Madrid on a solar-powered yacht.

What happens next year?

Although COP25 is just getting under way, there is already talk of next year's COP being the "COP of ambition". Next year's COP (COP26) will be held in Glasgow, Scotland and may be the first large-scale international event that the UK hosts after it has left the European Union.

COP26 is expected to be the largest and most significant COP since COP21 in Paris and will be significant because each nation's Nationally Determined Contributions ("NDCs") are due to be reviewed next year. 68 countries have indicated that they intend to make their NDCs more ambitious, including South Africa (heavily reliant on coal) and Norway (where oil is one of the country's most important commodities). However, most attention will be on the World's largest emitters, who are yet to throw their hat into the ring.

Given the expected significance of COP26, one of the most important things about COP25 will be how effectively it lays the foundations for a year of diplomacy and offline discussion that will culminate in historic announcements at COP26.

The Gowling WLG Environment and Climate Change Group

Environmental, climate change and sustainability issues are at the heart of law and policy, impacting every business sector. Gowling WLG's International Environment and Climate Change Group helps its clients successfully navigate these complex regulatory frameworks by offering established businesses and organisations advice and insight into the new regulatory and stakeholder landscape and advising new businesses keen to grow in the green economy.