Commendable COP27 loss and damage progress
Little was achieved at COP27 in Egypt to dispel criticism that policymakers globally are not going far enough, fast enough to address climate change.
There remains a lack of clarity on the concept of low-emissions and renewable energy, while the recalibration of the global financial system to align with the need for investment in clean technologies remains incomplete.
Arguably the most significant announcement was the new deal on loss and damage, which could see communities most affected by climate change receive billions of dollars in support from developed countries.
Developing countries, vulnerable to the effects of climate change but with little responsibility for contributing to it, have long campaigned for the establishment of a fund to compensate them for the damage caused by climate events. However, the introduction of a fund had been resisted by both the EU and US as part of a reluctance to accept any liability or responsibility for their own contribution to climate change.
A “Transitional Committee” will be established and be responsible for setting out how this political commitment will be delivered and how the fund will operate. It will make recommendations for consideration and adoption at COP28 in Dubai in 2023.
The Sharm el-sheikh implementation plan extends the calls for countries to accelerate “efforts towards the phasedown of unabated coal power and the phase-out of inefficient fossil fuel subsidies”.
However, critics were concerned that the call to increase “low-emission and renewable energy” as part of the energy transition did not do enough to define what technology this included, leaving the door open for the use of natural gas.
Delivering on net zero and low-carbon economies will require vast sums of money
if net zero emissions is to be achieved by 2050, with global transformation to a lowcarbon economy expected to require investment of at least $4-6 trillion per year.
There was a clear emphasis on the need for a transformation of the financial system and its structures to support this investment, and that governments, central banks, commercial banks and institutional investors had to work together to deliver this transformation.
The final agreement also calls on multilateral development banks to contribute to increasing climate ambition by using their policy and financial instruments for greater results and to ensure higher financial efficiency.
The progress made at COP27 on loss and damage is commendable and, in the context of it being a central issue heading into the conference, it should be celebrated.
However, the perceived opening of the door to the increased use of gas will leave critics viewing the Sharm el-sheikh implementation plan as a missed opportunity to build on the momentum gained in Glasgow last year.
While the formal outcome of COP27 didn’t progress the fight to keep global warming below 1.5 degrees increase compared to pre-industrial levels, we can find more progress perhaps is the lesser-documented parts of the final COP27 agreement, such as the declaration that “safeguarding food security and ending hunger” is a fundamental priority, and that better conservation of water systems can help protect against the effects of climate change.
Mark Ferguson, Head of Reputation, Crisis, and Client Operations, Pinsent Masons