COP27, and what to expect in another year of climate interventions

The host nation of any COP event has an impact on the issues discussed, and COP27 was no exception. Host nation Egypt has a relatively poor record of decarbonisation, and this year, much of the debate surrounded the terms of a new “loss and damages” fund.

This fund will see wealthier nations contribute to a fund helping poorer nations absorb the financial cost of climate change-related disasters, and has been vaguely discussed for years, remaining unpopular but not unthinkable among those who would pay. At COP27, the G77 group of developing nations through its rarely-united weight behind the concept, bringing it to the centre of discussions.

The Prime Minister of Pakistan Shehbaz Sharif spoke passionately to delegates about flooding in his country earlier this year. He described the floods, which killed more than 1,700 people and affected more than 33 million, as a vital sign of the consequences of unchallenged climate change.

“This COP rings an alarm bell for humanity,” he said. “It is the forum where we as vulnerable countries take our case to the rich and the resourced to build a road map to crucial policy resets needed in a world that is burning up faster than our capacity for recovery.

“We struggled on with raging torrents [which] ripped out more than 8,000km of metal roads, damaged more than 3,000km of railway track and washed away standing crops on four million acres. An estimate of damage and loss has exceeded $30bn and this all happened despite our low carbon footprints and yet we became a victim of something with which we had nothing to do."

From an energy industry perspective, this fund may mitigate climate-related risk in less-developed nations. Terminal facilities, offshore oil and gas extraction, and offshore wind power can all contribute to environmental damage, while all parts of the energy industry face massive disruption from the displacement of workforces.

The exact administration of this fund remains undecided, set for future, more detailed negotiations. Pragmatically, as in any disaster, receiving funds will likely rely on making a solid political case for a project. This means not putting projects in harm’s way, and being able to demonstrate the immediate benefit of restoring a damaged project.

In a climate-related disaster, any fund administrator will need to balance distribution between prevention, humanitarian relief and restoring infrastructure. The popularity of a project, among government officials or the general population, will likely play a significant role in claiming funds.

At the same time, while some obvious assumptions can be made, details as to who will be paying, and who will receive payment, remain indefinite. For some time, negotiators wrangled over which side of this divide would seat developing economic powerhouses, such as India and China. This remains unclear, but for those almost certain to pay, such as the EU and US, funding may come through general or targeted taxes on the energy generation industry, given its historic role in pollution.

At last year’s conference, the use of coal proved to be a key point of contention. In the final minutes of the conference, China and India led an effort to prevent a potential agreement mentioning the “phase out” of coal, instead speaking of its “phase down”. At the time, Future Power Technology suggested that the issue of phasing out coal would return at COP27.

This year, this came about in muted tones. Some delegates sought more direct action to reduce carbon emissions and increase the sustainability of the global economy. They were met with resistance, confusion, and powerlessness to act.

At COP26, Russia’s invasion of Ukraine was only a growing possibility. This year, the destabilisation of energy supplies in Europe has caused many to reconsider their coal phase-out timelines. Generally, the continent remains committed to its phase-out, but the financial ramification on the continent and beyond makes this battle harder than before.

At the same time, delegates criticised the relatively opaque process of discussing agreements, which hampered discussions, and contributed to a feeling of a lack of progress that has stretched between two summits now. In previous conferences, all delegates would contribute to agreements published as draft texts, available for all to see and discuss. Parties would then negotiate, suggest and alter the document before a new publication, repeating until all reached satisfaction.

This year, hosts invited national delegates to see draft texts individually, without allowing them to copy documents or immediately communicate them to other parties. This led to a feeling of distrust from some, who feared that not all delegates had seen the same document.

The conference stretched on for two days after the planned close of the COP. This itself is not uncommon, but this left little time for decarbonisation negotiations with loss and damages at stake, and contributed to an air of frustration at the conference.

In closing session of COP27, COP26 president Alok Sharma said of negotiations that: “Those of us who came to Egypt to keep [the target of] 1.5 degrees [of global temperature increase] alive, and to respect what every single one of us agreed to in Glasgow, have had to fight relentlessly to hold the line.”

That is not to say that the last year has been entirely wasted. In 2022, 29 countries have submitted new NDC documents, and recent elections in Australia have delivered a new government, which made the largest single new NDC commitment of the year.

However, this was arguably the only NDC submission of note. While several other countries submitted new NDC targets, including COP27 host Egypt, meeting most of these would require little or no change from industry and government. In the case of Egypt, this target actually exceeded current emissions growth rates, allowing for it to become more polluting, faster, before 2050.

UN secretary general Antonio Guterres summarised the feeling of frustration following the conference: “We need to drastically reduce emissions now, and this is an issue this COP did not address. A fund for loss and damage is essential, but it's not an answer if the climate crisis washes a small island state off the map, or turns an entire African country to desert. The world still needs a giant leap on climate ambition.”

The next COP will take place in the United Arab Emirates in November 2023. As a major oil exporter, the UAE has massive scope three emissions that it does not address in its most recent NDC, from September 2022.

However, this document came in response to calls from COP26, and contains a target of 31% emissions reductions by 2030, compared to no abatement. The UAE Government has also committed to net-zero emissions by 2050, and plans to submit a more developed NDC before COP28, so there is not a complete ignorance of climate-related needs.

Yet ultimately, progress remains behind the levels necessary for maintaining a liveable climate. To break new ground for climate action, those pushing against decarbonisation would need to change their minds. This has happened before, with Indonesia moving from climate action opponent to advocate, but the cause requires more support.

The economic case for fossil fuels is worsening, although perhaps not enough to change the business case some saw at COP26. At that conference, some found the moral authority of wealthier nations insufficient to sway those in poorer nations. This COP has restored some of that leverage, but without specific clarity over the loss and damages fund, the weight of this remains unknown.

Recent COPs have made notable progress in encouraging international negotiations, but this was not the case at COP27. At COP28, expect a renewed emphasis on reaching agreements, and decarbonisation to return to the agenda, and to see an almighty fight between what is needed and what is convenient.

// Main image: Protestors in Belgium. Credit: Alexandros Michailidis via Shutterstock