COP27: A Flawed Though Still Consequential Climate Summit

The United Nations annual climate change conference—officially known as the 27th Conference of the Parties to the UN Framework Convention on Climate Change (“UNFCCC”), or COP27 for short—held in Sharm el Sheik, Egypt, finally concluded early Sunday morning, more than 24 hours late.

COP27 was held amidst the ongoing Russian war in Ukraine and the consequent economic turmoil, including Europe’s scramble to secure non-Russian gas. It was previewed by a UNFCCC report which concluded that on its current trajectory the world faced warming of between 2.5 and 2.9 degrees Celsius by the end of the century, and accompanied by a new report from the International Energy Agency’s 2022 World Energy Outlook, which concluded that the world needed to spend at least $4 trillion annually to tackle climate change from now until 2030.

Against this challenging backdrop, COP27 was never going to be straightforward. But those difficulties were compounded by divisions between the developing and developed world over the priorities that should form the focus for COP27. Those divisions manifested themselves most clearly in tensions before, during, and at the conclusion of the Conference over the issue of “loss and damage.” This acrimony overshadowed almost all other aspects of the COP, which will nonetheless be viewed as historic for being the first COP to not only place the loss and damage issue on the official agenda, but for its creation of a separate fund to compensate countries most impacted by climate change. But loss and damage aside, the broader picture that emerged from COP27 was one of lost opportunities to adopt more ambitious and accelerated climate mitigation commitments in response to the dire scientific warnings about the impact of rapid global warming on the planet. In particular, efforts calling for a phase down of all fossil fuels were ultimately unsuccessful in the Summit’s final agreement and highlighted the mismatch between the pace of global emissions reduction commitments and that which is needed to avoid the most disruptive climate impacts.

COP27—A Recap

COP21 resulted in the historic Paris Agreement in 2015, which established that every country would submit a national action plan to reduce emissions, known as their Nationally Determined Contributions (“NDCs”). The NDCs in aggregate were to keep the world on track to avoid the worst impacts of climate change, and to do so were to be reviewed every five years. That review period was to act as a ratchet, forcing every country to come back to the COP with more ambitious NDCs. We missed a COP in 2020 due to Covid, so last year’s COP26 in Glasgow  became the first five-year review point to assess emissions reduction progress after adoption of the Paris Agreement. The Glasgow COP was also important due to U.S. reengagement on climate issues on the world stage, and the authoritative scientific assessments issued by the Intergovernmental Panel on Climate Change, setting out the increasingly dire impact of emissions trajectories, clearly demonstrating that this is the decisive decade for the world to lower its emissions to avoid catastrophic global warming impacts.

While Glasgow delivered dozens of bold governmental and private sector emissions reduction commitments, the conclusion of last year’s COP left the Chair near tears because the aggregate of the NDCs barely kept alive the science-based Paris goal of restricting temperature rises to a 1.5 degree Celsius rise over pre-industrial levels. Every tenth of a degree rise over that 1.5 goal will have cataclysmic weather implications for the planet, yet key agreements to better achieve that goal have proved elusive.

The UNFCCC assessed that countries had not made enough progress towards the 1.5 degree Celsius target and asked all member countries to return to COP27 with improved goals. The focus of COP27 was therefore on “implementation” of prior agreements—encapsulated by the Conference rubric of “Together for Implementation” —not an expectation that major new climate change texts would be negotiated. Yet despite the effort to use COP27 to hold feet to fire, out of the nearly 195 countries present, only 29 came with improved NDCs.

According to the United Nations, in addition to the national delegations at COP27, there were also nearly 2,000 official observer organizations—comprising a total of some 33,500 delegates. At any one time, usually scheduled on an hourly basis, there were dozens of official UN negotiations of subparts of the global agreement occurring simultaneously, alongside hundreds of separate official, country, business, and NGO-sponsored events, not to mention the myriad unofficial meetings, negotiations, and conversations. This broad-based participation exuded a messy creativity at COP27, which took place at a sprawling compound set up by the UN and the Egyptian government.

So What Happened?

Any supposition that global climate negotiations have now pivoted to an easier glide path of pure implementation was dashed at COP27. These negotiations demonstrated that “implementation” still must grapple with difficult questions of the sufficiency and pace of emissions reductions, as well as profound equity issues around who bears the impacts and burdens of climate disruptions versus the benefits of economic development. Although this year saw extraordinary droughts in Europe and China, it is lesser-developed countries that have for some time been increasingly bearing the brunt of climate-related natural disasters, as the historic flooding in Pakistan and Nigeria demonstrate. In recognition of this inequality and the importance of developing world countries attached to addressing it, in addition to Egypt’s role as host, COP27 had been billed as an “African COP.”

Historically, the global response to climate change could be broadly categorized as falling into either “mitigation” (emissions reduction) or “adaptation” (preparation for the future changes that climate change will bring—for example, reinforced sea walls or improved protection for critical national infrastructure). This COP added another official category—“loss and damage”—which, while closer to adaptation in that it deals with the effects of climate change, is focused on the current economic adverse effects of climate change, and those which a country can’t recover from through resiliency efforts.

The priority of many developing countries was the creation of some form of fund to address the damage that their societies and economies are suffering. However, developed countries were more focused on mitigation, on the basis that failure to do so now will create even more damage and be even more expensive to address in the future. Thus, COP27 was always destined to lead to tensions between competing views of the desired outcome.

Those tensions led the UN Secretary General to comment that “trust has broken down between global north and global south” as he rushed back from the G20 meeting in Bali to try and breathe new life and hope into the ailing talks in Egypt. The critical negotiations in the final 48 hours were further hampered by the physical absence of U.S. Climate Envoy Secretary John Kerry—a key deal-maker and experienced negotiator—who was confined to his room with Covid and had to resort to energetic telephone diplomacy.

Eventually, in the small hours of Sunday, November 20, a deal was reached. The EU’s last-minute offer to establish a fund to help vulnerable countries cope with the impact of climate change—and John Kerry’s support for the plan once it was established that no legal liability would be included—was key to unlocking the agreement. The Alliance of Small Island States, a negotiating bloc at the talks, hailed the fund as “a win for our entire world.”

However, critical details of how the fund will work, including who pays, how much, and how it will operate, were left to be worked out at future talks. That is important, since it may be politically challenging for the U.S. to obtain additional climate appropriations for a loss and damage fund from Congress and there may be challenging questions around the need for Senate ratification of any such agreement. Other key developed countries may also have funding challenges, faced with record inflation and a widespread cost-of-living crisis triggered by Russia’s invasion of Ukraine. And there remain unanswered questions about the role of other key emitters—most notably China—in contributing to such a fund.

Not Everyone Was Happy...

Although the developing world achieved its long-time goal of creating a loss and damage fund, COP27 failed in its objective to force countries to improve their NDCs. The negotiations also failed to secure an agreement to start a phase-out of all fossil fuels—language which at one point had seemed to have made its way into the text, only to be withdrawn and replaced by the Glasgow language of “phasing down” coal and “phasing out inefficient fossil fuel subsidies” after objections from Saudi Arabia, Iran, and Russia.

Although an attempt to remove the 1.5 degree Celsius goal from the Declaration in favor of the Paris Agreement’s upper limit of 2 degrees failed, there was no mention of the requirement for global emissions to peak by 2025, which scientists see as critical if the world is to meet the 1.5 degree Celsius target. And the focus on reducing emissions appeared to be undermined by the last minute insertion by Egypt of a call to increase “low-emission” energy (as Russia’s invasion of Ukraine and the subsequent sanctions on Russian hydrocarbon companies have triggered a demand for non-Russian gas).

The EU and the UK expressed disappointment that the final outcome did not improve the commitments to cutting emissions, which were made at COP26. The Commission Vice President said countries had “fallen short” adding: “We should have done much more ... and we are disappointed we didn’t achieve this.” That disappointment was echoed by the UK’s Alok Sharma—the COP26 President—who noted the omission of a commitment to phase-out fossil fuel and any language requiring emissions to peak by 2025. Debate and controversy about the role of gas as a transitional fuel was heightened by an enhanced scientific understanding of the short-term climate impact of methane leakage from natural gas production and the concept of locking-in higher emissions trajectories than with a pure renewables play. Sharma concluded that, “I said in Glasgow that the pulse of 1.5 degrees was weak. Unfortunately, it remains on life support.”

An important part of the recognition of the business role in providing climate solutions which emerged at COP27 was a heightened focus on integrity and transparency—ensuring that the numerous private sector and subnational commitments announced in Glasgow will result in real emissions reductions, with far greater attention being given to the concept of corporate net zero plans. The centrality of this theme was underlined by a report from the UNSG’s high level group, setting out principles of transparency and consistency for those plans and backing up a new standard for accounting on and reporting net zero emissions plans, issued by the International Standards Organization (ISO), with new efforts also focused on the integrity of voluntary carbon market emissions reductions. Key elements of these plans are the inclusion of science-based targets; a need for aggressive short-term emissions reductions; and a new call for consistency between climate advocacy positions by companies and the trade associations of which they are members. Companies can expect enhanced scrutiny of their net zero plans based upon these clearer standards and expectations.

Finally, the re-engagement of the U.S. over the last year on climate change issues was showcased by the presence of President Biden, a host of Cabinet Secretaries, and an active Congressional Delegation in Sharm El Sheik to highlight U.S. investment in addressing climate change—in particular the largest legislative climate package in U.S. history (the Investment Reduction Act or “IRA”), which will be instrumental in helping the U.S. operationalize its own NDC commitment and highlights clean energy and advanced technology economic opportunities.

Comment

Despite these bright spots, COP27 was characterized by disorganized negotiations and a failure to make progress on improving mitigation actions. The weak final text has led a number of commentators to conclude that limiting climate change to 1.5 degrees Celsius may no longer be realistic: given the damage caused by droughts and flooding that have afflicted so many parts of the world this year, as a result of just 1.1 degrees Celsius of warming, that is a bleak future. Other commentators are now openly questioning the workability and usefulness of the COP process, requiring as it does unanimity for all its decision. But, since COP is the best we have by way of a global system for managing climate change, it is a process that will have to be made to work.

One other important lesson which should be taken away from the heated debate over differing priorities at COP27 is the difficulty in neatly categorizing and separating “implementation” from the issues of emissions reduction, global ambition, equity, integrity, and transparency that underlie a solution to addressing climate change.

In terms of what we should expect from next year’s COP28, there will be a focus on how to operationalize the loss and damage fund, as well as a continued focus on the Global Goal on Adaptation, the New Collective Quantified Goal on climate finance, and perhaps most important for continued mitigation, the first Global Stocktake assessing progress on the NDCs of individual countries and the on-going role of private sector emissions reduction commitments.

But achieving these tangible outcomes will require a sustained effort to rebuild trust and confidence between the Global North and Global South.

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