COP27 Final Negotiations and Round-up

COP27 came to its conclusion in Sharm El-Sheikh, Egypt, in the early hours of Sunday morning, ending two weeks’ worth of hectic negotiations which at times appeared to be heading in the wrong direction from the progress made at COP26 last year.

From the hecticness, a historic dedicated fund was agreed to help vulnerable nations hit by climate disasters, a breakthrough moment in the fight against climate change. Despite this celebrated breakthrough which came at the eleventh hour, some questions remain about the efforts to tackle the underlying causes of climate disasters, with countries reaffirming promises made at previous COP’s it awaits to be seen if promise will turn into action.

Loss and Damage Fund

Loss and Damage refers to developing nations seeking compensation from developed countries who are often cited as the perpetrators of historic climate change. Developed countries acknowledge they have an obligation to help but liability risks have, until now, prevented any agreement on the matter.

COP27 negotiations ended with success on Sunday morning with over 200 countries agreeing to set up a fund to help vulnerable countries with ‘Loss and Damage’ suffered because of climate disasters. Spearheaded by The Group of 77 and China, the fund will provide financial assistance for loss and damage that “particularly vulnerable” nations are suffering from climate change. Details on who and how the fund will be finance are yet to be agreed.

A ‘transitional committee’ is expected to make recommendations on how operate and finance the fund prior to COP28 which is being held in Abu Dhabi in November 2023.

Institutional arrangements of the ‘Santiago Network for Loss and Damage’ were agreed which is expected to speed up technical assistance to developing countries that are “particularly vulnerable” to the adverse effects of climate change.

Antigua and Barbuda's Molwyn Joseph, chair of the organisation of small island states, described the agreement as a "win for our entire world".

Key Takeaways from the COP27 Agreement – ‘1.5?c’ on “life support”

The 2015 Paris Agreement contained two temperature goals – to keep the rise “well below 2?c” above pre-industrial levels, and “pursuing efforts” to keep the increase to 1.5?c.

Parties at COP27 reaffirmed commitments to limiting global temperatures to ‘1.5?c’ above pre-industrial levels.  Although this commitments and other successes like the Loss and Damage agreement were celebrated, ultimately the underlying actions needed to realise ‘1.5?c’ were lacking.

A key determinate of the likelihood of ‘1.5?c’ is said to be emissions peaking by 2025. Alok Sharma, the Cop26 president stated: “Emissions peaking before 2025, as the science tells us is necessary [is] not in this text”. He has also reiterated that 1.5C is “on life support”, after negotiators secured a last-minute deal at Cop27 in Egypt.

NO agreement on fossil fuels

The COP27 agreement places no obligation on countries to phase out fossil fuels which was an ambition by many going into the conference. The Financial Times reported: “many of the world’s biggest fossil fuel producers succeeded in staving off the demands for bolder action on climate change”.

Governments were however requested to revisit and strengthen the 2030 targets in their national climate plans by the end of 2023, as well as accelerate efforts to phasedown unabated coal power and phase-out inefficient fossil fuel subsidies.

Warning to ‘big banks’ over $100bn target

The goal of 100 billion USD per year by 2020 has not been met. Shareholders of multilateral development banks and international financial institutions have been warned that a swift and comprehensive transformation of the financial system and its structures and processes is required.

The final agreement from Glasgow expressed “deep regret” for missing the 100 billion USD target. The COP27 agreement “expresses serious concern” that it has not yet been met and “urges developed country Parties to meet the goal”.

First global stocktake

Delegates at COP27 wrapped up the second technical dialogue of the first global stocktake, a mechanism to raise ambition under the Paris Agreement. The UN Secretary-General will convene a ‘climate ambition summit’ in 2023, ahead of the conclusion of the stocktake at COP28 next year.

Mitigation

A mitigation work programme was launched at COP27, aimed at urgently scaling up mitigation ambition and implementation. The work programme will start immediately following COP27 and continue until 2030, with at least two global dialogues held each year.

Other highlights from COP27

Countries today launch a package of 25 new collaborative actions to be delivered by COP28 to speed up the decarbonisation under five key breakthroughs of power, road transport, steel, hydrogen and agriculture

$3.1 billion plan to achieve early warning systems for all by 2027

The UN Secretary-General’s “High Level Expert Group on Net-Zero” published a report at COP27, serving as a how-to guide to ensure credible, accountable net-zero pledges by industry, financial institutions, cities and regions.

A G7-led plan called the Global Shield Financing Facility was launched to provide funding to countries suffering climate disasters. 

USD 105.6 million in new funding as Denmark, Finland, Germany, Ireland, Slovenia, Sweden, Switzerland, and the Walloon Region of Belgium, stressed the need for even more support for the Global Environment Facility funds targeting the immediate climate adaptation needs of low-lying and low-income states.

The new Indonesia Just Energy Transition Partnership, announced at the G20 Summit held in parallel with COP27, will mobilize USD 20 billion over the next three to five years to accelerate a just energy transition.

The launch of the Forest and Climate Leaders’ Partnership, which aims to unite action by governments, businesses and community leaders to halt forest loss and land degradation by 2030.