Although COP27 made clear progress, most notably in the commitment to establish a loss and damage fund to help pay for climate related damage suffered by vulnerable countries, it also felt like a missed opportunity to advance other key agenda items and strive for even greater ambition in climate policy.
Heading into COP27 we identified loss and damage, increased ambition, climate finance, adaptation, and food security as key monitoring points for the conference.
We expected loss and damage to be a major agenda item at COP27 and, whilst it took until the final few hours, a historic commitment to establish a new loss and damage fund to help pay for climate related damage suffered by vulnerable countries was secured. Although key details such as how much money will be committed and by whom are still to be determined, countries agreed that the fund should be established before COP28 begins next year.
If progress on loss and damage was a clear positive, the lack of increased ambition was a source of frustration. A number of countries supported a proposal to phase down the use of all fossil fuels, but after lengthy discussions the agreement reached did not go further than the COP26 pledge to phase down coal and phase out inefficient fossil fuel subsidies. It has been reported that oil and gas producing countries led by Saudi Arabia staved off the demands for bolder action on fossil fuels. There was also no reference to global greenhouse gas emissions peaking by 2025, which would have been an ambitious advance on the 2030 target.
Meanwhile, more pressure was placed on the World Bank and other multilateral development banks (MDBs) to change their approach to climate finance. The conference text called for “reform in practices and priorities” for MDBs and to “increase climate ambition using policy and financial instruments for greater results.” On the continued failure to deliver a promised $100bn per year in climate related assistance, the language was changed from “deep regret” at COP26 to “grave concern”, but no suggestions were proffered on how to close this funding shortfall.The conference saw some progress on adaptation, with new pledges totalling over $230mn made to the Adaptation Fund at COP27. Governments also made incremental progress on the Global Goal on Adaptation (GGA), where the framework will be considered and adopted at COP28 in 2023. The ongoing GGA work programme aims to help parties understand how the goal could work in practice, including what kind of methodologies, indicators and metrics could be used to track progress towards achieving it.
On food security, a deal was reached that will see agriculture integrated into the UN’s climate action body. The UNFCCC will now incorporate “work on implementation of climate action on agriculture and food security.” Although it was encouraging to see agriculture taking a more prominent role in climate discussions, issues such as food waste and loss, nutrition, sustainable diets, and resilient supply chains continue to be excluded from the UN climate agreement.
While COP27 was billed as the ‘implementation’ conference, it will be remembered as the conference where significant progress was made on the issue of loss and damage. However, it also feels like a missed opportunity to advance other key agenda items and strive for even greater ambition in climate policy.
Ultimately COP27 provided further recognition of the scale of the challenge facing the international community, with the final text highlighting that a global transition to a low carbon economy is expected to require $4-6 trillion a year. Of course, a challenge of this scale also provides an enviable opportunity for many of the environmental solution providers within our strategy’s investable universe.
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