Investment needed to drive ‘era of implementation’

Introduction

Countries went beyond the usual calls for scaled-up climate finance on the first day of COP27, with some calling for a fundamental reshaping of the global financial system and more equitable access to debt finance.

The Prime Minister of Barbados, Mia Mottley, described by Ngozi Okonjo-Iweala in Time Magazine as ‘an embodiment of our conscience’,¹ highlighted that the Global North can access debt finance at much lower interest rates than the Global South.

Al Gore, former Vice President of the United States, made an impassioned plea for countries to ‘revamp the Bretton Woods system’.

While ‘implementation’ is the official priority of this COP, delegates are stressing that urgently scaling up climate finance and investment are key to unlocking implementation, particularly in the Global South.

Director of the London School of Economics, Baroness Shafik compared past agricultural and industrial revolutions with the transition we need to make in this century. Shafik said “we need a green Industrial Revolution in the 21st century that makes our economies more sustainable. This will take a great deal of investment, investment on the scale of 4-6 trillion per year globally.”

By locating COP27 in Africa, it has focused discussions on what wealthy countries are doing to invest in climate action in developing countries, particularly in Africa, that stand to bear some of the worst impacts from climate change.

Welcome to our COP27 blog

We have a presence on the ground in Sharm El-Sheikh and we look forward to sharing our unique insights from COP27. In this blog we will cover key themes and outcomes across the full spectrum of COP27, from the formal negotiations and major announcements from world leaders through to stakeholder workshops and events.

As with previous COP events, COP27 will be divided between a ‘Blue Zone’ for formal negotiations, and a ‘Green Zone’ where stakeholders including from business, academia, civil and indigenous societies can participate in official side events.

The ‘implementation’ COP?

The Egyptian Presidency of COP27 has stated that the priority of COP27 is to ‘move from negotiations and planning to implementation’.

Remarks at the official opening ceremonies focussed on ambition and implementation with the COP27 President Sameh Shoukry referring to recent extreme climate events as a ‘wake-up call’ to scale up ambition according to countries’ differing national circumstances.

The theme of implementation is present in the goals announced for COP27 by the Presidency which relate to collaboration², mitigation³, adaptation⁴ and finance⁵.

Collaboration appeared challenging from Day 1, with Parties taking over 48 hours to agree on the COP27 agenda.

Nevertheless, off the back of the approved agenda, there will be official discussion of funding arrangements for loss and damage in developing countries tor the first time, a topic previously blocked by developed countries at COP26.

In its opening statement, Pakistan for the ‘Group of 77 and China’ negotiating block (which represents 134 developing countries) stressed that such funding arrangements are ‘not charity; it is climate justice’. 

The opening statement of negotiating blocks indicated that progress on the Global Goal for Adaptation is also a key priority for many, including the Group of 77, the African Group and the Like-Minded Group of Developing Countries.

‘Keeping 1.5°C alive’ was a key focus for developed country groupings including the EU and the Umbrella Group, as well as for the Alliance of Small Island States.

As noted above, climate finance was addressed by all negotiating blocks, with a focus on delivering the USD 100 billion commitment and reaching agreement on a new collective quantified climate finance goal.

Points of interest you may have missed

• Agreement was reached on a ‘general’ set of recommendations for the UN’s Article 6.4 crediting mechanism under the Paris Agreement. Consensus was not reached on the wider methodological framework which bodes poorly for the end-of-2023 target for the first credits being issued.
• Reliance on fossil fuels in developing countries is an emerging hot topic. The US will announce a plan to help developing countries cut their use of fossil fuels. Meanwhile, Africa-based NGOs have criticised European leaders for their ‘dash for gas’ amid energy security crises caused by the war in Ukraine.
• Australia will bid to host COP31 in 2026 in collaboration with Pacific Island Countries.
• The International Monetary Fund stated that the price per tonne of carbon needs to average at least $75 by 2030 to create incentives for businesses and consumers to shift such that climate goals can be achieved.
• For those attending on the ground, the price and availability of accommodation is prohibitive which may disproportionately impact civil society and youth delegates.

Lookout for tomorrow’s post, which will provide some key takeaways from the Sharm El-Sheikh Climate Implementation Summit which is taking place yesterday and today.

This post was written by Sebastian Withers and Sophie Whitehead. The authors would also like to acknowledge Charlie Bevis for his ‘on the ground’ insights.