Ten takeaways from COP27

Hopes that delegates might agree action to ensure that greenhouse gas emissions begin to fall after 2025 came to nothing. There was no agreement on phasing down fossil fuel production. And only a few countries increased the ambition of their nationally determined contributions. 

According to New Zealand’s minister for climate change, James Shaw, there are “still parties that are stuck in a state of denial or delusion about the state of the climate crisis.” His complaint was echoed by others, including the German foreign minister Annalena Baerbock, for whom it was “more than frustrating to see overdue steps on mitigation and the phase-out of fossil energies being stonewalled by a number of large emitters and oil producers.”

Anecdotally, an important issue has been the impact of the war in Ukraine, which has seen a number of nations boosting their fossil fuel production and infrastructure projects. Concerns about energy security have made many governments less comfortable about pledging to leave their fossil fuels in the ground, and encouraged some of the biggest fossil fuel producers to push back against demands for rapid decarbonisation.

At one stage it looked as though the COP27 agreement might actually take a step back from positions negotiated at COP26. In the end it did not, leaving some delegates to take comfort from the fact that at least the final deal “does not scale down from Glasgow.”

As the most recent UN climate change report reminded us, the implementation of current national goals would see a  2.5°C rise in global temperatures by the end of the century. If global warming is to be held to 1.5°C, greenhouse gas emissions need to be cut by 45% as soon as 2030. The text agreed at COP27 highlights the uncomfortable truths that:

• an annual $4 trillion needs to be invested in renewable energy during the next few years to reach net zero emissions by 2050;
• global transformation to a low-carbon economy is expected to require investment of at least $4-6 trillion per year; and
• delivering such funding will require a transformation of the structures and processes of the global financial system.

Yet these stark facts, and the need for urgency they suggest, are not reflected in much of the COP27 decision.

COP27 ended with an agreement that developed nations would create a ‘loss and damage’ fund to help developing nations hit by the effects of climate change. Given extra impetus by the summer’s devastating floods in Pakistan, the negotiations overcame a long-standing refusal by developed nations to accept such a fund – partly because of anxieties about any implicit acceptance of liability for climate change. In the words of Pakistan’s climate minister, the establishment of the fund is “a down payment on the longer investment in our joint futures.”

Most developing nations were delighted that the idea of a fund had been accepted, after 30 years of rejection. Ironically, the high-profile and last-minute agreement on the fund somewhat overshadowed their complaints that developed countries have still not met their target of mobilising $100bn a year in climate finance – a goal that was meant to be achieved by 2020.

The COP27 agreement is not the end of the loss and damage debate. The next 12 months will see extensive negotiations, as the details of the fund are established. Developed nations have not yet pledged any contributions (or accepted any liability – it has been emphasised that contributions to the fund will not be reparations). Indeed, the question of where the money might come from has been deliberately left open, with developed countries keen to see backing for the fund from other high-emitting nations such as India and, especially, China. But this lack of firm commitments highlights the risk that the fund could be, in the words of Henry Kokofu, the Ghanaian head of the Climate Vulnerable Forum, “an empty bank account.”

A schedule for launching the fund will also have to be agreed. And few observers believe that whatever nations end up contributing, the fund will ever be large enough to cover much of the loss and damage caused by climate change. The assumption is that it will have to focus mainly on the poorest and most vulnerable nations. Which means it is still massively important to secure other sources of climate funding, and that …

There was a general sense at COP27 that multilateral development banks (MDBs) should do much more to support climate change mitigation and adaptation. This is reflected in the COP27 decision text, which calls for MDBs and international financial institutions to reform their practices and priorities, align and increase funding, and generally improve their response to climate change. Developing nations in particular want to see these institutions deploying a full suite of instruments, from grants to guarantees and non-debt instruments, without exacerbating debt burdens.

Advocates also believe that changes such as increasing the capacity of MDBs to take risk could create hundreds of billions of dollars of extra funding, without obliging them to ask their shareholders for more money.

Week One of COP27 saw the launch of the Sharm-El-Sheikh Adaptation Agenda by the Egyptian presidency, working with the  Marrakech Partnership and UN Climate Change High-Level Champions. 

The Adaptation Agenda aims to mobilise $140-300 billion of public and private funding to support adaptation. (This looks ambitious: the UN Environment Programme says the adaptation finance available to developing countries is currently up to ten times lower than what they need.) The agenda also wants to encourage 2,000 of the world’s largest companies to integrate physical climate risk and develop actionable adaptation plans.

The Adaptation Agenda outlines 30 outcomes that could enhance resilience for 4 billion people living in the most climate-vulnerable communities by 2030. These outcomes are focused on five ‘impact systems’: food and agriculture, water and nature, coastal and oceans, human settlements, and infrastructure.

Each outcome presents global solutions that can be adopted at a local level to respond to local situations and deliver the systems transformation required to protect vulnerable communities. 

The new agenda seems particularly timely, as COP27 also saw the publication of the annual 10 New Insights in Climate Science report, which this year warns that climate adaptation will become increasingly difficult as we approach 1.5°C above pre-industrial temperatures, that existing adaptation efforts are falling short, and that limits to adaptation are already being breached in some parts of the world. 

Expectations for progress on carbon markets were not fulfilled. Some steps forward were taken in drawing up a detailed framework for the functioning of carbon markets, whose broad principles were agreed in an important breakthrough at COP26. But there are widespread concerns that the emerging rules are lax, with climate campaigners arguing that the system will allow ‘secret’ carbon market deals between nations, with minimal transparency. They also contend that a second-tier market for ‘mitigation contributions’ will facilitate the sort of offset double counting that the COP26 agreement had hoped to stop. At any event, the system will not launch for several years – a number of decisions were kicked down the road, and negotiations will continue at COP28. 

Another outcome of COP26 was agreement on a mitigation work programme to “urgently scale up mitigation ambition and implementation in this critical decade”. Its structure was up for discussion at COP27, where delegates were deeply divided on the subject.

Very broadly, both developed and vulnerable countries wanted tough, focused and extended talks, while some other developing nations were in favour of shorter, more general debates. It looks as though the latter view prevailed, with the decision that outcomes will be “non-prescriptive [and] non-punitive,” and “will not impose new targets or goals.”

The programme’s brief to be “respectful of national sovereignty and national circumstances, [and] take into account the nationally determined nature of nationally determined contributions” looks likely to restrict its ability to persuade nations to adopt common standards, or clear targets and plans for emission reduction.

The programme will also run only until 2026, when its future will be reviewed – another disappointment to the nations most committed to climate action, which had been hoping for a guarantee that it would run to 2030.

Was this an ‘African COP’? The loss and damage agreement should help some African nations hit by climate change, assuming COP28 can present progress on its operational details – although it may be that the fund’s initial priority turns out to be the small island states most at risk from rising sea levels.

COP27 also saw many discussions and negotiations around important issues such as building climate resilience and mobilising finance. And some of the issues mentioned for the first time in a COP cover decision, including food and rivers, are highly relevant in Africa – although their inclusion in the decision does not immediately correlate with funding or action from governments. In fact, the most immediately consequential step for African farming may be the $1.4 billion grant that the Bill & Melinda Gates Foundation announced to help smallholder farmers address the impacts of climate change.

Other COP27 outcomes were less positive for Africa. For example, a proposal from the African Group of Negotiators for a decision on the “Special Needs and Special Circumstances of African States” was rejected, as was a request for an agenda item on doubling adaptation finance.

Some campaigners believe the provision in the final decision to boost “low-emissions energy” was specifically designed to include gas (which, although a fossil fuel, has lower emission than coal). This would be appealing to some African nations which hope to exploit their large gas reserves. The president of the African Development Bank, Akinwumi Adesina, was among those arguing that “Africa must have natural gas to complement its renewable energy.” For advocates of African gas, a continent which makes a relatively slight contribution to global warming, and which is home to 600 million people who still have no access to electricity, should not be condemned to “become the museum of poverty in the world” because the carbon emissions of developed countries have caused a climate crisis.

COP27 produced fewer initiatives and announcements than COP26, but there were still some high-profile developments.

A $20bn deal to help Indonesia transition away from coal, using public and private finance, was reminiscent of the plan for South Africa unveiled last year at COP26. (The Indonesian agreement was actually announced at the G20 meeting in Bali, but was taken as a ‘win’ for the COP27 agenda.) A similar agreement for Vietnam is expected.

Other new initiatives include the Forest and Climate Leaders’ Partnership, intended to help deliver the COP26 commitment to halt and reverse forest loss and land degradation while delivering sustainable development, and a five-year work programme to promote climate technology solutions in developing countries.

The disappointments of COP27 will make COP28 – at Expo City Dubai in November 2023 – even more important. Will it offer any hope of keeping climate change on a 1.5 track?

Frans Timmermans, vice-president of the European Commission, had a blunt assessment of progress at COP27. “The EU came here to get strong language agreed and we are disappointed we didn’t achieve this.” The EU and other nations with similar views will inevitably be looking for even stronger language at COP28. Does that mean there will be even more scope for negotiations to be deadlocked?

As COP27 has reminded us, it’s not only the negotiations at the conference but the negotiations before the conference that are important. If there is a strong lead from the COP28 presidency in the next few months, we may start to see a path towards meaningful progress. However, particularly given the present international tensions, significant steps forward can’t be guaranteed.

A new factor at COP28 will be the conclusion of the first Global Stocktake, a two-year assessment of progress made under the Paris Agreement. This is likely to emphasise the urgency of transformational action. Some governments and campaigners hope its conclusions will be alarming enough to jump-start agreement on swifter emissions reduction.

The lack of progress on emissions reduction and the phasing down of fossil fuels was a severe blow to efforts to minimise climate change, and has led to suggestions that the COP structure isn’t fit for purpose. But the negotiations in Sharm El-Sheikh did produce the ground-breaking agreement on a loss and damage fund – something a great many people, including US climate envoy John Kerry, had said before the conference was impossible. It was a reminder that, while COPs may be talking-shops, they can genuinely effect change.

The president of COP26, Alok Sharma, was understandably frustrated by the end of COP27. He told delegates that “those of us who came to Egypt to keep 1.5 degrees alive, and to respect what every single one of us agreed to in Glasgow, have had to fight relentlessly to hold the line … [and] if we do not step up soon, and rise above these minute-to-midnight battles to hold the line, we will all be found wanting.”

Mr Sharma’s view that “1.5 degrees … remains on life support” is contested only by those who think it’s already dead. But as the loss and damage agreement shows, COPs can sometimes surprise us. Billions of people will now be hoping for a truly world-class surprise from COP28.