COP 27- What Really Happened, What Did Not

Contributed by Robert Lyman © 2022. Robert Lyman’s bio can be read here.

On November 20, 2022, the 27th Conference if the Parties to the UN Framework Agreement on Climate Change concluded in Sharm-el-Sheikh, Egypt. The media reports of the conference and its outcome are dominated by the claims that the conference was of “historic” importance and that it achieved momentous and unprecedented agreement on many of the global climate policy issues.

Cutting through the massive news coverage to determine what actually was done at the conference is not as easy as in the case of COP26 and other previous conferences, as there was no formal communique issued at the end. To understand what really happened, one must read a document issued by the Marrakech Partnership, a sub-group entitled, “Summary of Global Climate Action at COP27” as well as the numerous background papers. The purpose of this article is to distinguish the facts from the claims, and to offer some commentary on what this all means.

In a previous article, I summarized the main agenda topics of COP27, which can generally be divided into three: climate mitigation (i.e. global efforts to reduce greenhouse gas emissions), adaptation to climate change, and financing issues. The main focus of attention at COP27 was on financing issues. These, in turn, were generally in two categories. The first category related to funding by the more developed countries (those listed in Annex II to the Agreement) to aid mitigation efforts by the less developed countries, usually represented by the Group of 77. The second category related to the demands of the developing countries for funding to deal with ”loss and damage” caused by past, present and future weather events that can be attributed to climate change.

Financing Issues

At the climate change conference in 2010, it was agreed that developed countries would provide a broad range of assistance to the developing countries both in terms of financial transfers and technical assistance, with the goal that starting in 2020 and continuing until 2024, the annual financial assistance would total at least $100 billion per year. That funding was to continue in 2025 and beyond at levels to be determined in the post-2000 period. In fact, while there has been much debate as to which funding should and should not count as part of the assistance, the $100 billion target has never been met. The unofficial estimate is that in 2021 the financial assistance provided by Annex II country governments was about $70 billion.

Every recent COP has “noted with concern” the failure to attain the $100 billion per year target. In fact, the UN has been busy establishing and promoting a number of alternative financial transfer mechanisms. These include the Regional Finance Forums, a group that seeks to identify meritorious projects for funding; the Climate Project Pipeline, a compendium of 128 projects in developing countries allegedly in need of $128 billion; the Finance for Action High-level Expert Group, which has released a report on mitigation adaptation and related projects that will allegedly need $2 trillion per year in funding until 2030; the Action Plan for Climate and SDG Investment Mobilization, which makes recommendations on how to integrate climate and development finance; the Private Finance Race to Zero Partners, 550 financial institutions and the Net-Zero Banking Alliance representing 40% of global banking assets; the Glasgow Financial Alliance for Net Zero (GFANNZ) which seeks to align multilateral and financial “architecture”, pricing externalities of climate emissions, creating incentives, and mobilizing capital flows; as well as many other global and regional organizations dedicated to the same goals. In short, while successive COPs have failed to raise developed country government funding to the target level committed in 2013, they have moved along parallel paths with private sector organizations to pursue the same goals by other means.

At COP26 in Glasgow, the Group of 77 supported a report from a coalition of African countries calling for developed country payments to support climate mitigation and adaptation to rise to at least $1.3 trillion per year in the 2025 to 2030 period. There was no agreement on this at COP27.

A central goal of the government of Egypt as host of COP27 was to make progress on what has been a decades-long discussion on funding for “loss and damage”. At the heart of this concept are two central ideas. The first is that the richer countries of the world that industrialized over the past two centuries are responsible for the lion’s share of the carbon dioxide concentrations now in the atmosphere. Second, those countries should therefore pay the costs faced by the developing countries related to “extreme weather events” and to “slow onset events” such as sea level rise, ocean acidification, glacier retreat, land and forest degradation, loss of biodiversity, desertification and others. The potential liabilities are virtually limitless, and the science that underlies the claims highly suspect.

After considerable resistance from the United States and European Union to the inclusion of “loss and damages” on the COP27 agenda, this was finally agreed after strong efforts by Germany, Egypt, Pakistan and South Africa, aided by Canada, to address it. Jacob Werksman, the European Commission’s chief advisor for international climate relations, stated to the press that the inclusion of this item on the agenda “was agreed under certain conditions”, including that the COP “would not be discussing this issue of liability and compensation”.

The precise nature of the outcome, moreover, requires a close look at the text. The Parties:

“ 7 Decide to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage, including with a focus on addressing loss and damage by providing and assisting in mobilizing new and additional resources; and that these new arrangements complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement.

8 Also decide, in the context of establishing the new funding arrangements referred to in paragraph 2 above, to establish a fund for responding to loss and damage whose mandate includes a focus on addressing loss and damage.”

The Parties also agreed to establish a transitional committee on the operationalization of the new funding arrangements for responding to loss and damage. The Transitional Committee will hold at least three meetings per year and report back with recommendations at COP28 in 2023.

The proponents of making developed countries pay for the alleged climate-related loss and damages of developing countries can claim three important victories. They obtained the acquiesce of the United States and Europe to the principle that such assistance is justified. They obtained all Parties’ support for a process that will attempt to operationalize the mechanisms by which such assistance will be delivered. Finally, they established this topic as a topic on the agenda of all future COPs.

Against these gains are some important questions and undeniable realities. Fundamentally, there is no agreement on what should count as “loss and damage”; the concept is barely coherent and difficult to define. There is also no agreement on the scope of what should be counted i.e. does it include damage to infrastructure, economic disruption, and natural ecosystems and cultural assets? How would one determine cause and effect? The wealthier countries insisted that any payments from a fund are not to be seen as an admission of liability. Under these circumstances, how would payment obligations be assigned to countries, and to which countries (China has declined to share in the costs). Similarly, how would the benefits of funding be divided by countries? What is the significance of targeting the countries that are ”particularly vulnerable” and what does this mean? The agreement appears to call for funds to come from a variety of existing sources, but which are not identified. The Transitional Committee will face an almost impossible task of sorting out these issues before the topic is debated again at COP29.

A few countries (Denmark, Belgium, Germany, Scotland and Canada) as well as the EU have already made relatively small but symbolic funding commitments. A report by 55 “vulnerable” countries estimated that climate-related losses over the last two decades totaled $525 billion. Or 20 percent of their collective gross domestic product. Canada also increased its commitment to fund climate efforts in other countries, which now stands at $5.3 billion. When expenditures of that magnitude are made in future, the public in developed countries, already struggling with inflation, recession and massive public indebtedness, may be less than sympathetic.

Climate Mitigation

At COP21 in Paris in 2015, the Parties agreed on the objective of reducing GHG emissions so as to avoid an increase in average global temperatures by more than two degrees Celsius over pre-industrial levels by the end of the century. They also expressed the aspirational goal of restraining the rise in temperatures to less than 1.5 drees C. Each country submits plans every five years as to how it will reduce emissions to meet these goals. This has not prevented the Intergovernmental Panel on Climate Change or the United Nations from constantly demanding that countries increase the stringency of their existing targets. Among 196 countries, however, only 29 came forward before COP 27 with revised action plans.

In fact, global emissions rose by 1% in 2021 and are on course for a 10% increase this decade. Early in the conferences, there was an effort by some countries to recognize this reality by downplaying the 1.5 degree C. goal. Through an impressive media campaign and the determination of the Egyptian chair, “keep 1.5 alive” became a mantra of the conference.

There was a major effort by some countries to encourage a universal commitment to “end oil”, meaning of course to end the financing needed for oil exploration and development, while ignoring that 80% of the GHG emissions from oil occur at the final combustion (i.e. consumption) end of the fuel cycle. Apart from some general anti-fossil fuel references in the preamble of the Summary of Climate Action at COP27, there was no decision to reduce oil use. The “elephant in the room”, of course, is the surprising growth in coal consumption, with China now consuming 50% of the world’s thermal coal and India close to 20%.

As in almost all other topics, COP27 included an endorsement of endless process. A “mitigation work program” will start immediately following the conference and continue until 2030,with at least two global conferences held each year. In substantive terms, there was no “progress” on mitigation at COP27.

Climate Adaptation

Adaptation has long been the weak sister to mitigation in climate policy, and there was an effort during COP27 to raise its importance. A Group called the High-level Champions and the Marrakech Partnership announced a “collaboration” to develop a global plan aimed at achieving 30 Adaptation Outcomes by 2030. These outcomes are intended to occur under the headings of food and agriculture; water and nature; oceans and coastal; and human settlements and infrastructure systems. The same group “called for” governments to mobilize US $149 billion to US $300 billion by 2030, and for private insurers to implement an approach to promote adaptation and resilience. Finally, the group launched the Action on Water Adaptation and Resilience Initiative (AWARe).

It will be up to each country’s government to decide what, if anything, they intend to do to fulfill the intent of these initiatives. At COP26, developed countries agreed to double their financial commitments to pay for adaptation in “vulnerable communities”, a pledge that would cost about $40 billion per year. It seems unrealistic to expect that they will soon increase adaptation funding to the levels called for by the High-Level Champions.

The Process

The provisional list of registered participants at COP27 included 33,500 names of government and major organization representatives and the total attendance, including non-governmental organizations and youth groups was over 45,000. The COPs are major diplomatic events but they more closely resemble large trade shows and extraordinary media events. Canada’s delegation, as usual one of the largest, included 377 people. It is grand theatre.

When one lists the various processes that precede and follow each COP, one cannot help but be struck by the tens of thousands, and perhaps hundreds of thousands, of people who are employed in the governments of the world and in the industries that benefit from climate finance. The “climate industrial complex” is immense and extraordinarily well funded. Like any other successful bureaucratic organization, it thrives by constant growth.

Ultimately, however, the success of any institutional undertaking must be assessed in terms of whether it is achieving its central goals. The COP conferences have served to provide intellectual and political cover for several OECD governments to institute changes in their energy systems so as to increase the scarcity of hydrocarbon fuels and raise their costs, thus in many cases driving down emissions. However, according to the BP Statistical Review of Work Energy 2021, two-thirds of all GHG emissions now occur in the non-OECD countries, as does virtually all of the growth. Overall, GHG emissions have grown by 60% since 1990 and continue to grow now.

Bottom Line

COP27 continued and expanded a vast bureaucratic process that engages many thousands of people around the world on climate-related programs and expenditures. It is unlikely that it will result in increased emissions reductions beyond those already targeted in Parties’ national plans or indeed in reducing global emissions overall, which are driven by the efforts of the developing countries to increase their incomes and standards of living. It may cause some increased attention of climate adaptation, but it is doubtful that this will include more funding than was already committed at COP26. On the highly controversial issue of “loss and damages”, the developing countries achieved a propaganda victory, but the barriers to operationalizing the concept appear almost impossible to overcome.