COP27: Climate Negotiations Amid Global Uncertainty

Strategic Insights -

COP27, the 27th Conference of the Parties of the United Nations Framework Convention on Climate Change, has opened in Sharm El-Sheikh, Egypt, amidst a backdrop of rising energy prices, inflation, and interest rate hikes. The conference is crucial in addressing the pressing issue of climate change, particularly in developing countries. A recent report by economist Nicholas Stern highlights the need for $2 trillion per year by 2030 to help developing countries cut their greenhouse gas emissions and cope with climate breakdown.

Key Takeaways:

  • The conference is likely to focus on addressing loss and damage, a contentious area for climate negotiations, with developing countries pushing for a loss and damage finance facility.
  • The Paris Agreement defines "loss and damage" as the actual and/or potential manifestation of impacts associated with climate change in developing countries.
  • Developed countries have long argued against "reparations" for climate damage, while many developing countries are pushing for the creation of a loss and damage finance facility.
  • Market mechanisms under the Paris Agreement require further steps to be taken, including the rules applicable to the use of Internationally Transferred Mitigation Outcomes (ITMOs) in emissions reductions.
  • The Integrity Council for Voluntary Carbon Markets has been working to improve the quality of voluntary carbon credits, and its work will sit alongside COP27 discussions.
  • The US climate envoy John Kerry is trying to garner support for a new framework for carbon credits, which would generate money for investment in low-carbon energy projects.
  • The Glasgow Financial Alliance for Net Zero (GFANZ) announced significant private sector initiatives to reduce emissions, including a commitment to net-zero by 2050 and interim targets for 2030.

Statistics:

  • 15,000 people killed in heatwaves in Europe in 2022.
  • Nearly 1,700 died as a result of flooding in Pakistan.
  • $2 trillion per year needed by 2030 to help developing countries cut their greenhouse gas emissions and cope with climate breakdown.
  • 1.7 million deaths expected worldwide by 2050 due to air pollution.
  • 550 firms belonging to seven sector-specific net-zero alliances from across the global financial sector are members of the Glasgow Financial Alliance for Net Zero (GFANZ).

Sources:

  • Stern, N. (2022). "The economic impact of climate change". The Guardian.
  • Report from the Intergovernmental Panel on Climate Change (IPCC).
  • Article by John Kerry, US climate envoy, on the development of a new framework for carbon credits.
  • Glasgow Financial Alliance for Net Zero (GFANZ) announcement.
  • United Nations Framework Convention on Climate Change (UNFCCC) Paris Agreement.