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COP27: What were the key outcomes?

Overview

As COP27 drew to a close on the afternoon of Friday 18 November, following two weeks of the conference in Sharm el-Sheikh, the first drafts of the COP27 agreement were published, but getting the deal finalised looked to be a difficult task.

Similarly to last year's COP26 in Glasgow, countries negotiated up to and beyond the end of the conference, reflecting fundamental differences in views on what to prioritise in relation to climate change efforts.  By Sunday morning, a large number of final texts emerged, representing the results of 45,000 people from 196 countries coming together to tackle the climate crisis. This briefing summarises some key takeaways from the key text, the Sharm el-Sheikh Implementation Plan (the "Implementation Plan").

1. Temperature rises and the 1.5 degree goal

The Implementation Plan reaffirmed the resolution to pursue a limit of 1.5 °C rise in temperature above pre-industrial levels, as found in the Glasgow Climate Pact. This resolution was viewed as one of the biggest achievements of COP26; given the scientific evidence on the effects of warming above 1.5 °C and the IPCC's warnings that the path to 1.5 °C was already becoming unclear, it was hoped that this commitment could even be strengthened at COP27.

Decision -/CMA.4 on a "New collection quantified goal on climate finance", reiterates the Paris Agreement's goal of limiting global temperature rises to well below 2 °C, and the Implementation Plan commits the parties to "pursue further efforts to limit the temperature increase to 1.5 °C."

While positive in not allowing countries to backslide on their COP26 commitments, many at COP27 were disappointed that there was equally no strengthening of those commitments by making 1.5 °C a binding target. Similarly, references to emissions peaking in 2025 did not make it into the final text. Alok Sharma, President of COP26, said that the 1.5 °C target had a weak pulse at the conclusion of COP26, and "remained on life support" following COP27.

2. Loss and Damage Funding

The provision of loss and damage funding has been one of the central issues of the COP27, with the inclusion of this as an agenda item being widely welcomed as a strong move towards addressing climate justice between developed, high emitting countries and developing, poorer nations often bearing the most severe consequences of climate change.

The eventual agreement to establish a dedicated fund to support poorer nations most affected by climate disaster is probably the biggest achievement to come out of COP27. Potential recipient countries emphasised that they have called for such a fund for 30 years.

Many developed nations have traditionally, and continued to do so at COP27, pushed back against the establishment of a specific fund for loss and damage; including former Prime Minister, Boris Johnson, who said Britain did not have the financial resources to make payments to low-income countries as "some kind of reparations".

While current Prime Minister, Rishi Sunak, said that the UK would triple funding for climate adaptation in developing countries, according to some commentators, this pledge did not involve extra money, but rather described the plan for slicing up existing financial commitments of £11.6 billion.

The European Union eventually came out in support of loss and damage, proposing to set up a fund for loss and damage in the most vulnerable countries but from a 'broad donor base.' This would aim to extend the responsibility for loss and damage funding past those countries who are historically viewed as responsible for global warming and increase funding from newer economies, primarily China.

The EU, despite its traditional role as leader in climate-related matters, initially expressed reluctance about the fund due to the time it can take for it to be established and subsequently filled. EU negotiator, Franz Timmermans, instead pointed to existing instruments which could have been used to provide this funding faster. The EU's U-turn was widely criticised as ploy to divide the G7 countries which led to many developing nations siding with China. It is not yet known how the fund will be financed and private capital may have a role to play. The decision on loss and damage envisages that the mechanics of the fund will be worked out in advance of COP28.

The loss and damage fund will work in conjunction with other finance mechanisms, in particular the Global Shield Financing Facility, which aims to supply capital for rapid deployment in the event of climate-related damage. In relation to the USD 100 billion of funding promised by developed countries, the outcome does little more than to reemphasise that these countries need to continue working to meet this existing commitment and that a wide variety of sources should be drawn on to reach the total, including "public and private, bilateral and multilateral, including alternative sources".

UN Secretary-General, Antonio Guterres, was keen to stress the need for 'clarity' on the delivery of this funding, whilst also highlighting that adaptation needs were likely to rise to USD300 billion per year by 2030.

3. Phasing Down v Phasing Out

The use of fossil fuels has been another controversial topic during COP27, against the backdrop of rising energy prices and supply crises following Russia's invasion of Ukraine. The Implementation Plan does no more than to repeat the goal of last year's Glasgow Climate Pact, "accelerating measures towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies." References to "the importance of a clean energy mix… as part of diversifying energy mixes and systems" are perhaps deliberately ambiguous. This is despite calls from India and numerous countries within the European Union for references to 'coal-power' to be broadened to include all fossil fuels.

The International Energy Agency recently warned that global coal use must be reduced by 90% by 2050 if the world is to limit global heating to 1.5C. Recent energy challenges have already threatened to slow, if not halt, existing progress towards coal phase-down, with countries like Germany claiming to have little choice but to return to coal to keep the lights on, in view of gas shortages.

Unfortunately, it is not therefore considered surprising that the Implementation Plan does not move forward the reduction in fossil fuel use.  This point was underlined by Yeb Sano, Greenpeace International's COP27 head of delegation, who described the draft text as "an abdication of responsibility to capture the urgency expressed by many countries to see all oil and gas added to coal for at least a phase down."

What next?

COP28 will be held in the United Arab Emirates from 30 November to 12 December 2024. The host of COP29 has yet to be decided, but will be an Eastern European country. COP30's host is also as yet unknown, but will be a Latin American country, and Brazilian President Elect Lula da Silva has already expressed his wish that it be hosted in the Amazon.

Lula's election has been met with a renewed optimism for an end to the rapid deforestation of the Amazon that occurred under Jair Bolsanaro. Biodiversity was overshadowed by finance issues at COP27, and it will be interesting to see whether it is the real focus for attention in 2025.

Now, as after COP26, countries' representatives return to their home countries with the not-insignificant task of implementing their newly signed international commitments. The difficulty is that domestic circumstances are in many cases, including the UK, not well aligned with the use of significant sums for international aid when domestic pressures are seen as acute.

Antonio Guterres, who has never been one to mince words, said before COP27 that the world needed to "cooperate or perish", and that it was "on a highway to climate hell with our foot on the accelerator". He suggested that a tax on fossil fuel energy profits, and significant investment in renewables projects rather than more oil and gas were ways in which the shortfall in climate funding could be met.

The Implementation Plan notes that $4 trillion per year needs to be invested in renewables to meet net zero in 2050, and $4 to $6 trillion to achieve "a global transformation to a low-carbon economy". It is clear that these sums cannot be met without additional investment from the private sector. With many governments still appearing to be acting slowly, there may well be a renewed focus on market forces, investor concerns and the fundamental impact of the climate crisis on ordinary people being the primary drivers of change, well-ahead of legislative agendas.

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