Geopolitical tensions, economic pressures and accelerating climate impacts are competing for political attention, at times pushing climate down the list of immediate priorities. Yet beneath this volatility, important shifts are underway: governments in Europe are doubling down on multilateral cooperation, ambitious transition plans are emerging elsewhere, and subnational governments are pioneering new ways to finance climate action. These dynamics are shaping the policy debates that will define 2026 and influence what comes next.
The EU’s external carbon tax – formally the Carbon Border Adjustment Mechanism (CBAM) – moved one step further towards implementation on 1 January 2026, when imports of industrial products began requiring CBAM certificates to cover their carbon emissions.
This is a major milestone – for the first time ever, the carbon impacts of goods will become a financial liability on imported products. But alongside the positive momentum behind the concept of carbon border adjustments (Australia recently began laying the groundwork for a CBAM, we also hear the UK is looking into this) the EU is beset by pressure to delay, relax and in some cases exempt goods from carbon pricing. 2026 is an opportunity for the EU to decide how committed it is to industrial decarbonisation.
The combination of ageing assets, outdated technologies, global overcapacity and comparatively high energy costs in critical sectors like steel, automotive and chemicals have led to many businesses calling for delays. While focussing on energy costs makes for convenient politics, the reality is that too many businesses face much bigger challenges. Europe needs to decide how it wants to respond. We will be pushing the bloc to step up and ensure that tools like public procurement and carbon standards are used to provide a long-term solution for the EU’s competitiveness challenge.
COP30 both failed and succeeded, depending on where you look. It failed to include fossil fuel phaseout in the final Global mutirão text, despite mounting pressure from governments, businesses, and frontline communities. Not even President Lula’s personal call to action could sway negotiating parties. One observer famously likened it to “hosting a conference on lung cancer while omitting its biggest driver: smoking.”
Yet COP30 also succeeded. Nearly every headline spotlighted the omission, while attention grew around what was happening on the margins - more than 80 governments demanding a clear transition roadmap. That’s unprecedented.
The first Amazon COP also led to the first-ever fossil fuel transition conference scheduled this spring, so there’s reason to hope that Belém will be remembered as the moment the scales tipped. While some nations are consciously extending the fossil fuel era, others are proving the transition is already here. California, which ran on clean energy for nine out of ten days in 2025, is a case in point.
The war in the Middle East has shown that fossil fuels and its supply chains are still at the heart of the global economy, but they’re also its vulnerability. We've seen how fossil fuel dependency played out following the war in Ukraine. Governments would do well to speed up the transition to an energy system based on renewables, storage and other forms of clean energy. Why? Because it's cheaper, faster, less volatile and ensures energy security.
Methane abatement remains one of climate’s biggest contradictions: while the wins can be fast and relatively cheap, progress to tackle methane emissions has been painfully slow. So why are we still lagging? Well, it’s starting to change. Methane has climbed rapidly up the UN’s agenda, with governments following suit.
Crucially, money is now on the table. New grant mechanisms are emerging, and subnational governments through coalitions like the Subnational Methane Action Coalition - are stepping up with funding to ensure developing regions can join the fight. The science has been clear for years. In 2026, for methane the politics, science and finance are finally catching up.
Let’s be clear: we need finance and at scale. Access to adequate climate finance remains one of the fastest ways to accelerate implementation and sustain momentum. COP30 tripled adaptation finance, marking a significant shift.
Developing regions, often facing the most severe climate impacts with the smallest budgets, will speak with a louder and more unified voice this year. Nowhere is this more evident than in Africa, as the road to Addis 2027 begins. Ethiopia’s power system is already dominated by hydropower, and at the recent African Union Summit, President Ruto pressed for unified climate finance to drive clean energy across the continent.
The UAE has backed this call, committing US $4.5 billion to clean energy projects in Africa. Meanwhile, as the UK cuts climate finance for developing regions by a fifth, leaders like Ruto are stepping forward to insist the transition must be just, others will follow.
For states, regional and devolved governments – they are already ahead with ambitious climate plans with more than 73% of Under2 Coalition members racing to net zero with subnational transition plans. On finance? They’re revolutionising how they access it – through investable climate projects for example. In Brazil, with support from UK PACT – three states delivered projects worth US $1.3 billion in investment value to climate-friendly financiers. This is just the beginning. We’ll see more direct and open dialogues between investors and governments this year.
When negotiations stall, real economy leaders move. On the heels of 2025, 2026 is shaping up to be the year of the coalition of the willing - key economic players prepared to be bold, align on transition roadmaps, and move beyond lowest-common-denominator outcomes.
This shift matters deeply for subnational governments: closest to the people, yet furthest from formal negotiation tables. Is the absence of a formal COP framework for subnational governments pushing more states and cities into the orbit of smaller, influential coalitions? The signs suggests so.
Last year, the co-chairs of the Under2 Coalition called openly for a fossil fuel transition roadmap, while mayors and governors threw their support behind Colombia’s Belém Declaration on a just transition. The EU joined CHAMP, and we’ve seen more promising signs of multilaterism, but power is no longer waiting politely outside the room – the coalition of the willing is already here.
Climate is the defining story of our time, yet climate journalism is shrinking. Media budgets are tightening, geopolitics and Bot farms are distorting coverage, and climate impacts continue to rise regardless.
Still, there’s reason for optimism. Beyond the newsroom, the push for information integrity is gaining ground. Governments, civil society, businesses, and UN agencies are increasingly aligned in countering climate disinformation. For the first time, information integrity was enshrined in the final COP30 text. The Declaration on Information Integrity launched in Belém by Denmark, Germany, and Brazil.
As information risks grow, so too will counternarratives: more credible data, more positive stories of clean energy, and clearer pathways to a just transition. And AI? That’s a chapter of its own but expect serious efforts in 2026 to harness its power for the public good. As early as 2024, more than 24 climate organisations were calling on major tech platforms to stop amplifying climate denial. The work is underway, and it’s accelerating.