COP27 was billed as the Implementation COP, an opportunity to showcase the work needed to bridge the gap between ambition and action. As the dust settles, this intention for COP27 looks unfulfilled. In the final COP agreement, countries repeated their ambition to limit global warming to 1.5 degrees Celsius, but declined to agree on any plans to reduce global reliance on fossil fuels. This is despite the UNFCCC making it clear at the start of COP27 that current commitments are not enough. With current emissions reduction plans, there is “no credible pathway to 1.5°C in place.”
Reflecting on COP27, some have begun to question whether COPs are the right apparatus to drive climate action. Action is happening. In spite of global political gridlock, decarbonization technologies are maturing and finance is shifting toward low-carbon and resilient business and economic development. How might leaders’ approaches to global climate change cooperation evolve in a way that leverages political cooperation to accelerate the actions and solutions already underway? As the focus shifts toward the Global Stocktake at next year’s COP28, perhaps new, nimble mechanisms will emerge to break through global gridlock holding back climate action.
Here are our takeaways from COP27:
1) A new climate loss and damage fund helps to restore trust in global climate negotiations
The big news from COP27 was the announcement of a new Fund for Loss and Damage for the countries most vulnerable to the impacts of climate change. At COP27, Pakistan’s Climate Change Minister Sherry Rehman led the effort to secure consensus for a loss and damage fund–a controversial topic which only made it onto the formal COP agenda this year. Multiple global events in 2022 resulted in damages of more than USD20 billion each: floods in Pakistan, Hurricane Ian in the United States, and heat waves in Europe. The Fund is without a doubt a major feat in climate diplomacy.
Though significant, it should be an outcome that is secured alongside action to address the source of the problem. Without action on mitigation, a loss and damage fund is essentially “a down payment on disaster”. For the most vulnerable countries, there is no way to compensate for their losses. As the Maldives’ Environment Minister put it, “Why are we celebrating loss and damage when we have failed on mitigation and adaptation? We are just a meter above sea level — I want my two-year-old daughter to live in the Maldives.”
Still, the breakthrough on loss and damage was a necessary step to repair the rifts that have deepened between developed, emerging, and developing countries in climate negotiations, which depend on consensus. The details of the loss and damage fund still need to be worked out, with disagreements lingering over the obligation of emerging economies like China, Russia, and Saudi Arabia to contribute to the fund. Perhaps the urgent need for a solution to the loss and damage that has already occurred will bring parties to the table in earnest, clearing the way for the hard work and unprecedented cooperation that will be needed to meet mitigation and adaptation goals.
2) Without new mitigation action, 1.5 degrees Celsius is in jeopardy
At a certain point, maintaining the goal to limit global warming to 1.5 degree Celsius without efforts to reduce emissions starts to lose its credibility. For each fraction of a degree over 1.5 we go, the impacts, uncertainty and financial costs of climate change increase exponentially. The global energy crisis has certainly complicated the situation, but backsliding on climate action at this point is hard to justify under any circumstances. At best, the Sharm el-Sheikh Implementation Plan holds the line on mitigation commitments made last year. COP26 President Alok Sharma shared his frustration following COP27 negotiations:
“Emissions peaking before 2025 as the science tells us is necessary? Not in this text. Clear follow-through on the phase-down of coal? Not in this text. Clear commitment to phase out all fossil fuels? Not in this text. The energy text? Weakened in the final minutes.”
India led an effort at COP27 to expand the COP26 global commitment to phase down unabated coal power to include all fossil fuels. Backed by the European Union and the United States, the proposal was ultimately left out of the final text. The Implementation Plan also makes reference to the need to increase “low-emission and renewable energy” to reduce emissions, justifying more investments in natural gas as an acceptable transition fuel. Prolonged use of fossil fuels will only increase the need to invest in adaptation, including loss and damage.
3) WTF?! “Where’s the Finance?” - No major breakthroughs in climate finance
To build the infrastructure necessary to achieve a Net Zero world, governments and the private sector need to mobilize USD4 trillion annually by 2030 for clean-energy investments, tripling current levels. A major portion of those investments need to flow into developing countries. Right now, governments are struggling to meet the symbolic annual climate finance commitment to developing countries of USD100 billion. Within that climate finance commitment, countries have struggled to channel sufficient funds to climate adaptation. To drive this point home at COP27, some representatives wore buttons that read “#WTF” for “Where’s The Finance?”
At COP27, UN Secretary-General António Guterres announced a USD3.1 billion plan toward early warning systems, a critical and high-impact adaptation intervention. Countries also made new pledges amounting to USD230 million to the Adaptation Fund, though this remains drastically short of the USD340 billion annual need in developing countries by 2030.
However, there were signs at COP27 of structural changes underway within the global financial system to quickly mobilize the necessary finance for the transition to a low-carbon economy.
“Our international financial architecture is built for a different time and different challenges.” As Australia’s climate and energy minister Chris Bowen states.
To start, COP negotiators discussed near term opportunities to reform international financial institutions like the World Bank and the International Monetary Fund. Reforms discussed include lowering climate loan interest rates, updating how ratings agencies assess project risks, increasing windfall taxes on oil and gas company profits, and pausing debt repayments for countries impacted by climate disasters. Advocates of these reforms say they could triple climate finance from IFIs. For now though, major structural barriers to finance remain.
4) We need to update our global architecture for climate cooperation
The lack of progress evident at COP27 cast doubt on the COP process as the best mechanism to drive action on climate goals. There is a growing sentiment that these gatherings–to which tens of thousands of people are invited–aren’t working.
“What is needed is an apparatus that is less cumbersome and more manageable” - Bill McGuire, professor emeritus of geophysical and climate hazards at UCL
McGuire proposes smaller, more agile bodies addressing key issues of the climate crisis that work out of the media limelight and meet multiple times per year. This is already happening organically as communities, organizations, and sectors recognize the need to take action faster than policy is able to drive. Aside from the announcement on loss and damage, many of the most significant outcomes from COP27 emerged outside of formal COP negotiations as a result of collaborative, country-focused strategies. These include Indonesia’s USD20 billion Just Energy Transition Plan and the U.S. government’s plan to boost private sector investment in solar energy development in Angola. Meanwhile, at the less covered G20 Summit in Bali that coincided with COP, the U.S. and China agreed to resume bilateral cooperation on climate. Whether new formal cooperation structures are formed or fresh initiatives emerge, country or issue-specific strategies may become more common as they are proving more conducive to climate action in 2022.
Beyond COP27: Climate intelligence can unlock new partnerships and cooperation
With COP27 failing to deliver on the promises of the Paris Agreement, the conversation is already shifting toward finding alternate pathways for progress on mitigation and adaptation. Organizations have enormous potential to deliver on climate action. Although they have less scope than national governments, they can act faster and with greater ambition, making climate-informed decisions that impact the choices of hundreds to thousands of stakeholders. As new models of cooperation are embraced to drive progress in spite of political inaction, climate intelligence can enable communities, organizations, and sectors to ground their activities in climate science.
Climate science not only provides the data and evidence to understand the impacts of climate change, climate science also needs to underpin all of the solutions and be the foundation of decision-making going forward. We need an accessible layer of evidence-based support that delivers climate data and expertise that decision-makers of all kinds can integrate into their work. Climate-informed decision-making across all sectors and levels, from individuals to multinational companies, from rural farms to our most populated cities, is essential to building low-carbon, climate resilient societies. Climate science is complex, but the solutions don’t have to be.
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