Ten things to watch for at COP27

COP26 saw governments accept that climate change action has to be frontloaded if targets for 2050 are to be met. Much of the heavy lifting needs to be done by 2030 or even sooner.

According to the Intergovernmental Panel on Climate Change, greenhouse gas emissions must peak before 2025 and then fall by 43% by 2030, if the global temperature rise is to be kept to 1.5°C. Even limiting the rise to 2°C would require emissions to peak before 2025, although their decline afterwards could be – while still very challenging to achieve – somewhat slower. This harsh reality colours everything else that’s under discussion at COP27.

Much has changed since COP26. Increasing global inflation, the threat of recession, energy supply issues and the Russian invasion of Ukraine are among the factors that are making the world seem a less stable and certain place. In the words of Egypt’s prime minister, this is a “polycrisis era”.

COP27 will bring many reminders that the world needs governments – and civil society and businesses – to prioritise the fight against climate change, whatever other crises also demand action. There may also be a heightened focus on issues that the past year has brought into sharper relief, such as food and energy security.

At COP26, governments agreed that to reassess and strengthen their emissions targets. But In October the UN warned that current pledges to cut emissions would still see a temperature rise of 2.8°C above pre-industrial levels by 2100. It characterised recent progress as "woefully inadequate”, with only a few nations delivering tougher post-COP26 commitments.

Some states have promised action that would be contingent on international financial and technical support – but even were these conditional pledges to be implemented fully, a rise of 2.4°C by 2100 would be likely.

COP27 will see a strenuous and concerted campaign to persuade the many nations that have not toughened up their 2030 climate targets and NDCs to do so.

COP27 is happening midway through the first Global Stocktake, the process of assessing the world’s progress towards achieving the purpose of the Paris Agreement and its long-term goals. The stocktake kicked off at COP26 in Glasgow and will conclude next year at COP28 in the UAE. The UN hopes it will help governments see what has been achieved so far, identify what still needs to be done and highlight opportunities for more ambitious climate action.

The stocktake’s first technical dialogue was held at the Bonn Climate Change Conference in June, and COP27 will see another round of discussions that will be an important step in moving the stocktake forward. Some campaign groups and developing nations are devoting a lot of attention to the stocktake, with the aim of ensuring that it gathers enough compelling evidence to be a genuine boost to action on climate change.

The Egyptian presidency has been keen to highlight a ‘just transition’ to a net zero economy as an important COP27 theme. But ensuring a just and equitable transition everywhere, with no-one ‘left behind’, poses daunting problems. A just transition for coal mining regions in Eastern Europe will look quite different from a just transition for the citizens of a small island nation whose very existence is threatened by rising sea levels.

In all cases, though, any just transition needs both goodwill and finance. It also needs governments to ensure that just transition requirements – including developed nation support for developing nations – are built in to their net zero pathways. And it is not an issue for governments and financial institutions alone: we should expect to see growing demands for corporates to help fund transitions for which they are felt to have some responsibility.

Developing nations still feel that the developed world is not delivering on climate finance. Amid pressure at COP26, some developed nations including the US and Japan increased their commitments, raising hopes that the $100bn a year promised for 2023-2025 will be achieved (after developed nations collectively failed to meet their pre-2020 commitments by quite some margin).

The $100bn is meant to be split between climate change mitigation and adaptation – something which highlights the fact that, in the context of global climate change and the need to fund so many different initiatives, $100bn is not in fact a very great deal of money. COP27 will be a forum for negotiations around the post-2025 finance goal, which developing nations will want to push significantly beyond $100bn. However, there will also be increasingly urgent discussions on how to tap other sources of climate finance, with developing nations pressing for a higher ratio of grants to loans but probably having to accept a compromise, including e.g. more hybrid payment and investment instruments. 

COP26 saw more emphasis than ever on adaptation, and the damage wrought by this year’s extreme weather events has been another grim reminder of the importance of this topic. The Paris Agreement provided for the establishment of a Global Goal on Adaptation, but this is still a work in progress. Some campaigners complain that, with the requirements for adaptation varying so much around the world, a global goal is always going to be a chimera.

Incontestably, however, extensive adaptation funding is urgently required, and this requirement will continue to grow. Arguably, the less successful other initiatives are, the more support for adaptation is needed.  At COP26, developed countries agreed to double their annual adaptation funding to $40bn, but this figure hasn’t been reached yet. In the meantime, adaptation costs in developing nations are rising, and are expected to top $300bn a year by 2030. This adaptation gap is a significant part of the overall finance gap mentioned earlier.

Familiar arguments against focusing on adaptation – that it diverts attention from the need to cut emissions, or provides cover for governments that don’t want to cut emissions – look increasingly hollow as it becomes clear that we are already living through a destabilising period of climate change. It is also ever clearer that supporting adaptation is a more cost-effective option than stepping back and waiting to pay for the inevitable loss and damage caused by climate change. Speaking of which…

This remains a highly contentious issue, with developing nations arguing that more industrialised countries have a moral obligation to provide loss and damage finance to reflect the harm that climate change – caused primarily by their economic activities – is inflicting on the developing world.

At COP26 many developing nations pressed strongly for the establishment of a dedicated loss and damage finance facility, and were disappointed when the conference ended with a compromise that instead created the Glasgow Dialogue as a forum to discuss possible loss and damage funding.

The Glasgow Dialogue is scheduled to run until June 2024, but there are clear signs that developing nations will try to advance the topic again in the COP27 agenda, despite resistance from other parties including the US and the EU. Indeed, one target of the Egyptian presidency is “action to clarify support for loss and damage” in the hope of finding a “balanced solution” to the funding question. While related issues such as the Santiago Network for Loss and Damage will also be discussed, the hardest bargaining will again be around the potential creation of a dedicated facility. 

COP26 made important and long overdue progress on finalising the so-called Paris Agreement rulebook, a framework for the carbon credit market mechanisms envisaged by Article 6 of the Paris Agreement. But while this was a major achievement, it left many important aspects to be discussed in future negotiations, including the rules and requirements for the infrastructure that Article 6 mechanisms will need. Progress in resolving these issues at COP27 would be another important step on the journey towards establishing a global carbon credit market.

Most African countries have relatively small carbon footprints. Africa as a whole is responsible for less than 4% of global greenhouse gas emissions. But African nations are among those most at risk from global warming, and the potential costs to the continent are jaw-dropping. Estimates suggest that adaptation alone will cost between $259bn and $407bn during the 2020s. The impact of loss and damage could be even higher, at up to $440bn over the decade.

The Egyptian COP27 presidency has indicated a strong wish to address the issues that matter most to African nations – some of which, such as the climate finance gap and adaptation, are mentioned above. And while COP27 won’t resolve all these issues, it may still serve an important function in highlighting them. Sameh Shoukry, Egypt’s foreign minister and the COP27 president-designate, recently noted how the presidency has “worked with our sisters and brothers in Africa to provide for the broadest possible participation of African and Egyptian NGOs, bringing the grassroot voices of the global south closer to the climate process and its parties.”