COP27: Issues and Expected Storylines

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COP27 Context

Egypt will host the 27th UN Climate Change Conference of the Parties (COP27) in Sharm el-Sheikh between November 6-18 2022. Last year’s meeting in Glasgow led to countries setting ambitious goals, and at this meeting, billed as the “implementation COP”, countries are expected to work to figure out how to accomplish commitments, raise ambition, and prevent backsliding as a result of current geopolitical crises. COP27 is also being billed as the ‘African COP’ –  with a focus on providing solutions for people across a continent disproportionately affected by climate change despite contributing very little to the crisis. 

At its core, COP27 will be a showdown over money and responsibility between developed and developing nations – as issues of climate finance and loss and damage escalate. 

Global context

The latest report from the Intergovernmental Panel on Climate Change (IPCC) – the world’s foremost scientific body – concluded that emissions “unequivocally caused by human activities” have already pushed the average global temperatures up 1.1˚C. 

Every continent has been impacted by catastrophic extreme weather events this year, causing about $65 billion in total losses in the first half of 2022 alone. Record-breaking heat waves have struck South Asia, Europe, China, and the Middle-East. Historic rains and flooding have ravaged Pakistan, Nigeria, Afghanistan, Spain, Australia, and South Korea, displacing millions. Africa, China, and Europe endured epic droughts. Tropical cyclones wreaked havoc across Asia and the Caribbean. 

Closer to home, the United States has seen historic flooding in Mississippi and Kentucky, Hurricanes Fiona and Ian devastated Puerto Rico and Florida, ongoing historic drought across Western U.S. have reduced the water supplies tapped by tens of millions, and 15 climate disaster events have caused losses exceeding $1 billion each to 2022 thus far. 

As the recent IPCC Working Group II report established, the decade ahead is a crucial time if we are to limit warming to 1.5°C,.According to the IPCC, global emissions must be cut in half by 2030. Limits to climate adaptation are already being reached and widespread irreversible impacts will occur if warming significantly overshoots 1.5°C.  

At the same time, an ongoing, uneven recovery from the pandemic, further complicated by Russia’s invasion of Ukraine, spiraling inflation, an emerging debt crisis, and the prospect of a global recession, have necessitated short-term fixes for the global energy crisis. These have included new investment in gas and other fossil fuels that will either have to be retired prematurely or will make the climate crisis that much worse. These concurrent geopolitical crises may lead countries to backslide on their climate commitments. 

The facts remain stark:

  • Global CO2 emissions rose by 4.8% in 2021 
  • Global atmospheric methane concentrations had the highest year-on-year increase on record in 2021, jumping to an annual mean of 1895.32 parts per billion, the highest levels on record.
  • Country pledges to date would only reduce global carbon pollution 5-10% by 2030, far less than the nearly 45% reduction – compared with current policy projections – needed to limit warming to 1.5°C
  • The USD 750 billion spent on clean energy technologies and efficiency worldwide in 2021 was one third of the level required to limit warming to 1.5°C
  • Clean energy is now often cheaper than fossil fuels, according to the International Energy Agency (IEA) and the IPCC.

What to watch at COP27

Implementation: Last year the Paris rulebook, the rules underpinning the Paris Agreement, was finalized. Countries also decided on the rules to implement carbon trading with further negotiations expected at COP27. While this year is not necessarily a “milestone COP” due to not being tied to a significant outcome, it is projected to be the COP of implementation. Buoyed by the passage of the Inflation Reduction Act – the first ever significant federal climate bill, the United States will push other major emitters to increase their ambition. Developing nations, particularly those among the least developed countries, will ask for more assurance, and follow through, on key issues such as finance.

Loss and Damage: The loss and damage debate – over how much financial support rich countries will provide to developing nations for activities to avert, reduce and address the acute and long-term losses and damages resulting from climate change – will be the litmus test for COP27. Without progress on the issue, negotiations are likely to fall apart and the legitimacy of the UN process will likely be challenged by countries experiencing acute climate impacts. Current loss and damage finance is completely inadequate relative to the scale of the problem – currently in the low millions of dollars – meanwhile climate impacts are already creating mounting losses.

Talks will focus on establishing a dedicated finance funding for loss and damage, with funding that is seperate from adaptation finance. The Alliance of Small Island States (AOSIS) recently proposed a “Loss and Damage Response Fund” that would allow for voluntary funds from government donors. This would build on small existing commitments made by Scotland, Wallonia, philanthropies, and most recently the first wealthy federal government, Denmark. The United States, and other developed nations have signaled willingness to discuss the issue but remain firmly against a dedicated fund.

Negotiators will also seek to operationalize the Santiago Network on Loss and Damage, created in 2019 to provide countries with technical information and assistance to address loss and damage.

Strengthened NDCs: Last year, countries agreed to the Glasgow Climate Pact that included commitments to revisit and strengthen their national emissions reductions plans or Nationally Determined Contributions (NDCs) to help get the world closer to 1.5C emissions trajectory, with a deadline of the end of 2022, but only a small number of countries have done so

Mitigation Work Programme: Building on efforts to keep ‘1.5 alive’, expectations at COP27 are high for countries to deliver clear signals of progress on cutting greenhouse gasses – or mitigation implementation and ambition in UN speak. The Ministerial Roundtable (MRT) and Mitigation Work Programme (MWP) will aim to encourage countries to cut these gasses faster. 

Global Stocktake: The 2015 Paris Agreement also established a Global Stocktake – a process held every 5 years that assesses progress collectively towards the Agreement’s long-term goals. The first Stocktake began at COP26 and will conclude next year. 

Finance: Climate finance will take center stage during COP27, as rich countries will be urged to spend much more money in the developing world on building clean energy, helping countries adapt, and loss and damage, and follow through on unfulfilled promises

Developed countries will be under pressure to finally fulfill their commitment to provide $100bn per year in financing to developing countries made in 2009, agree on a post-2025 climate finance arrangement, and increase global funding for adaptation projects. Increased public and private sector mobilization, loss and damage compensation, as well as debt considerations, will also be key points of discussion. For more, please see our detailed COP27 finance backgrounder here.

Adaptation: COP26 concluded with a commitment from rich nations to double adaptation finance from 2019 levels by 2025 – providing low- and middle-income countries (LMICs) with $40bn annually as part of a commitment by developed countries to provide $100bn annually in climate finance to developing countries. This funding is dedicated to help protect communities against impacts of climate stress, such as destruction of homes and livelihoods. 

Yet, developing countries aren’t getting the adaptation assistance promised. Only 20-25% of committed concessional finance across all sources is earmarked for adaptation, with adaptation finance only reaching $28.6bn in 2020 – an increase from $20.3bn in 2019. About 65% of the $356mn that was pledged to the Adaptation Fund at COP26 is still outstanding. And only $21.8 billion total adaptation finance is expected by 2025, according to the International Institute for Environment and Development (IIED)

A successful COP27 adaptation finance outcome would include a transparent implementation plan for the 2025 doubling adaptation finance, as well as a signal that adaptation grant-based finance will increase. 

Other storylines and issues to watch 

US Midterm Elections: The United States is coming to COP armed with a historic climate legislation – the Inflation Reduction Act – along with other bills including CHIPS and Science Act and the Infrastructure Investment and Jobs Act. While this helps bolster its credibility on the international stage, its ability to deliver on both its internal climate plans and external climate finance will be heavily influenced by the results of midterm elections that fall on the second day of COP (November 8). Current forecasts suggest Democrats losing at least one chamber of congress, profoundly shaping the Biden administration’s ability to legislate and the country’s capacity to make climate progress on local, state, and federal levels.

Human rights: Egypt is home to roughly 60,000 political prisoners. One of the nation’s most prominent imprisoned dissidents, Alaa Abd El-Fattah, has been on hunger strike since April. But as the calls for abused Egyptian political prisoners to be released grow louder, COP Civic Space has a petition to release those arbitrarily detained, and locally some are calling for protests on 11/11 during COP27. Amr Magdi of Human Rights Watch has tweeted that calls for protest “have been marginal” and “not adopted by any large” local organizations with “the ability to mobilize in any significant way.”

African energy: A common African position on energy seems to pave the way for further fossil fuel investment, citing an absence of serious support for clean energy solutions. At the talks, African leaders are expected to declare they need access to massive new investment in fossil fuels and an expansion of production – despite having the highest solar energy potential of any continent and being the most vulnerable to climate impacts

Economy: Overlapping energy, food, and affordability crises across huge parts of the world will shape conversation at COP. Climate advocates will continue to make the case that further investment in clean energy provides a path out of the crisis, but expect governments to be more cautious about making climate commitments with more politically pressing economic and social problems at home. 

JETP: In 2021, South Africa announced a partnership (JETP) with Germany, the UK, the EU, the US, and France to mobilize $8.5 bn to support a transition to a low emissions economy and away from coal. An investment plan is expected to be released by COP27, but has been bogged down in negotiations with richer nations about how the funds would be spent. Additional JETP announcements are also expected on plans for Vietnam and Indonesia. 

Methane: The Global Methane Pledge, jointly launched at COP26 by the United States and the European Union, was the first major commitment by the global community that focused on methane. More than 120 countries signed on in Glasgow and in the months that followed, agreeing to take voluntary actions to contribute to a collective effort to reduce global methane emissions at least 30% from 2020 levels by 2030. COP27 will be a key opportunity to take stock of the progress made on the Pledge, and where greater ambition is required. For more, please see our detailed COP27 methane backgrounder here.

Greenwashing: News that Coca-Cola is sponsoring COP27 is causing outrage – as the climate community rejects the greenwashing of the world’s biggest plastic polluter. Additionally, Egypt hired PR firm Hill+Knowlton – who worked with Big Tobacco and currently runs the “Oil & Gas Climate Initiative,” an industry front group. Finally, the exclusive consulting partner for the conference is Boston Consulting Group, a firm that consults for the oil and gas industry. Oil and gas lobbyists are also expected to flood the talks as part of a wider, global push to expand production.

COP26 Initiatives: Many initiatives were launched last year and will be monitored for any signs of progress at COP27, including the Glasgow Leaders Declaration on Forests and Land Use, the Global Methane Pledge, the Cities Race to Zero, and the Glasgow Financial Alliance for Net Zero

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