Key Take-Aways from COP27
February 24, 2023
By: Danielle Barrs
The 2022 Conference of Parties – better known as COP27 – was inauspicious, to say the least. With a mere 26 out of 193 countries tightening pledges in the year since Glasgow, expectations were poignantly low going into the week.
On November 28, civil society activists, businesses, consultancies, scientists, environmental groups, foundations and sub-national government representatives all gathered in the Egyptian city of Sharm el-Sheikh as a key step toward the next stage of climate action.
Methane pledges are up, carbon markets are down.
COP27 saw little to no concrete action on the state of voluntary carbon markets, with governments deferring to the next conference to focus on improving the transparency of carbon trades. Double-counting concerns have spurred whispers of a supervisory body tasked with revisiting the mandating of governments and corporations to disclose details on emission reduction trades.
Methane pledges, on the other hand, are gaining momentum. Methane (a hydrocarbon and primary component of natural gas) is responsible for 30% of global warming. With five more countries joining the Global Methane Pledge at COP27, total Party endorsements have now reached 151 signatories. The United States, for its part, has introduced a tax on methane leakage as part of the 2022 Inflation Reduction Act.
Financing the transition took center stage.
COP27 reiterated how crucial finance is for a stable global economy. The transition to a global low-carbon economy is expected to require investments of at least USD $4-6 trillion per year. The UN Climate Change Standing Committee on Finance is set to prepare a series of considerations for doubling adaptation finance in time for COP28, which will take place late in 2023. Whether that will be enough to propel the transition is yet to be seen. As the goal of developed country COP members to mobilize a joint USD $100 billion per year by 2020 has not yet been met, many people are exhibiting considerable concern.
Pledges for developing robust solutions to vulnerable communities totaled USD $230 million, but truly mobilizing climate finance requires inclusive and deliberate collaboration between governments, central banks, commercial banks, institutional investors and other financial actors alike.
Vulnerable countries are getting help.
Vulnerable countries have called for financial support to help them cope with the most severe impacts of climate change will now get what they’ve been asking for. The long-awaited breakthrough included a dedicated fund for loss and damage. Additionally, G7 and V20 countries have banded together to form the Global Shield against Climate Risks, providing these vulnerable communities with provisions to protect themselves from increasingly extreme weather brought on by climate change. Additionally, the Adaptation Fund received nearly USD $243 million to “to build resilience and make a tangible difference on the ground through tangible projects and programs that are tailored to local adaptation needs.”
It’s time for a true-up.
One thing COP27 did see significant progress on was adaptation. Governments agreed to a path forward for the Global Goal on Adaptation, with plans to finalize it at COP28 and inform the first Global Stocktake. The Global Stocktake (“GST”) of the Paris Agreement is the process for taking stock of the implementation of the Paris Agreement, with the goal of assessing collective progress toward achieving the purpose of the agreement and its long-term goals.
Preparing for COP28
Dubai – you’re up!
The GST is crucial because the international community has yet to live up to its commitments and climate action has yet to reflect deep transformations needed across all sectors to build a resilient future. The GST is a two-year process that happens every five years. That means Dubai is on deck in 2023 for COP28.
Swing or a miss?
The Paris Agreement requires each Party to prepare, communicate and maintain successive nationally determined contributions (“NDCs”) that it intends to achieve. These NDCs are at the heart of the agreement and are key to addressing opportunities for enhanced action and support towards global progress.
COP28 will air out each Party’s climate-related dirty laundry, so to speak. It’s crunch time. Can the conditions for an effective Global Stocktake be met in time, or will the world see a repeat of Sharm el-Sheikh?