Day 4: Finance Day – funding gaps, carbon credits and the missing $100 billion
There’s been a focus on the trillion-dollar funding investment gap facing poorer countries and details of a new US global carbon credit trading initiative to funnel private capital to the developing world.
Climate finance is firmly in the spotlight at COP27, but Sharm El-Sheikh has not seen much of the Wall Street titans who attended last year’s event in Glasgow. A political backlash in the United States, coupled with navigating the issues of energy security and affordability has made this year’s event a far more complex and difficult challenge for the CEOs of the world’s biggest financial institutions.
Yet attention has been firmly focused on the role of banks, investors, and insurers, and how their money can make a difference in scaling up solutions to the global climate change agenda. Today, the US climate envoy John Kerry has been advocating his latest solution; a new framework, to be called the Energy Transition Accelerator, provides carbon credits to scale up private capital investment in the renewable energy sector of developing countries. This plan already has the backing of large US corporates and philanthropic organisations such as the Bezos Earth Fund and the Rockefeller Foundation, though the reaction of environmental groups has been mixed.
The United Nations has published a list of projects in the developing world worth a total of $120 billion that investors are able to fund right now. A report commissioned by the UK and Egyptian governments, as former and current COP hosts, says that by the end of the decade developing countries need to secure an additional $1 trillion in external financing for climate action. The charity Christian Aid is warning that climate change could cut Africa’s economic growth by two thirds by the end of the century.
It’s been revealed that there have been informal talks between the world’s two biggest economies, the USA and China, at COP27 despite the political tensions between the two countries. China may be willing to contribute to a compensation scheme for developing nations which have suffered “loss and damage” due to the climate crisis, according to the Chinese official Xie Zhenhua. However, China has also stated that peak emissions for building materials such as concrete, cement and steel will not now be reached until 2030, rather than the previously stated date of 2025.
The day began with a LinkedIn Live discussion chaired by SEC Newgate’s Naomi Kerbel at the Bankers for Net Zero pavilion. It featured a discussion between David Marriage, Head of Disruption and Innovation for Sustainability at PwC, and Rob Gardner, Director of Investment at St James’s Place and Rewired.earth board member.
Rob Gardner sought to highlight the need for a common language for sustainability and the importance of a standardised way in which to interpret financial data. It is only then that the public and the politicians can understand the trade-offs and complexity which lie at the heart of the climate change agenda. The UN has already argued that continued fossil fuel investment is incompatible with the net zero agenda.
David Marriage also emphasized the need for transparency, and how Rewired.earth data can help banks and SMEs to understand their own carbon footprint and the impact of emissions throughout their supply chain.
Noticeable on Finance Day by its absence, was any reference to the repeated failure by the world’s wealthiest nations to live up to the $100bn climate investment promise which was such a source of controversy and debate at the COP26 climate summit in Glasgow. The pledge from rich nations made over a decade ago to provide $100 billion in annual investment to the rest of the world has still not been met.
Day 5: Science and Youth & Future Generations Day
Passing the baton, or managing up?
By Emily Church
If you assumed that stakeholders representing the voice of future generations – in other words children, adolescents, very young adults and those who have not yet been born – were already well represented at COP events, you would be wrong. Despite regular theme days focused on Youth & Future Generations, COP27 is the first time this important demographic – who will bear a disproportionate amount of the most drastic consequences of climate change – have been given their own official, dedicated forum at the event in which to discuss key issues and policy demands that matter to them. As the continent with the youngest population globally, Africa was certainly a fitting location for this inaugural event giving global youth a voice of their own in the climate fight.
It hasn’t come a moment too soon. Despite the commendable efforts of youth activists such as Greta Thunberg gaining traction in the hearts and minds of the public in recent years, youth and future generation stakeholders have struggled to assert their influence in a manner that results in clear action, instead looking on in frustration as well-funded corporate bodies run by ‘the grown ups’, responsible for this mess in the first place, continue to dominate the flow of conversation regarding priorities in the climate crisis and solutions – the industry talks a good talk but very few actually offer financial backing to youth-lead entities.
Key topics discussed in the Youth Pavilion today were intergenerational policy on adaptation, resilience, mitigation, loss & damage and a just transition. ‘Passing the baton’ was an overarching theme symbolising the mission being handed down the generations, but with an impressive array of ideas and strategies discussed to help ensure climate pledges are honoured by those with the broadest shoulders coming out of Youth Day, the underlying feeling resulted in one of youth delegates ‘managing up’ to their older COP peers. And long may it continue – unencumbered by worries about shareholder value or economic policy, younger generations possess a clarity of vision which is vital if we are to develop transformative solutions in the fight against climate change.
Meanwhile, Nancy Pelosi, Speaker of the US House, made an appearance at COP27 today. Despite voicing that it is “hard to speak” about the midterm elections in the US, Pelosi added, “We can’t have political disagreements over this or let the fossil fuel industry cramp our style. The need is great enough and the urgency is clear enough.”
A number of UK politicians have also been active in Sharm-el-Sheikh. Chris Skidmore, Chair of Net Zero Review; BEIS secretary, Grant Shapps; and COP26 President Alok Sharma have made their rounds today, joining discussions across a number of panels.
By Millie Beale
Scientific expertise and credible data are needed more than ever, and today’s discussions in Sharm-el-Sheikh have seen a call for scientific research to be injected into all aspects of environmental policy and business action to create the scaffolding for climate progress.
The start of the day focused on the landmark science reports that have been produced in 2022, including those from IPCC and UNEP. It also saw the release of new insights report from Future Earth, The Earth League and WCRP. The report touches on topics such as vulnerability hotspots, health threats, sustainable finance, and the phrase that continues to be a talking point, “loss and damage”.
Climate Action Tracker has also published a COP27 global update, claiming that the government’s focus on the energy crisis has overshadowed their progress on climate action. The report threatens that proposed, approved and under construction LNG projects globally will seriously compromise meeting the 1.5°C limit.
This research coincides with reports that a record number of lobbyist from the oil and gas industries are attending the COP conference this year, up 25% from last year’s figure.
However, some climate positive news comes from Norway, with the announcement that it will be halting plans for its large new oilfield, which was previously expected to be a $10bn project.
An appropriate entre to tomorrow’s themed day which is ‘Decarbonisation’.
Day 6: Decarbonisation Day – the decarbonisation challenge
By Sara Price
Highlights from today at COP27 included President Joe Biden dropping by, an attempt to rebrand fossil fuel and of course, protest.
Joe Biden was the star attraction during a whistle stop visit to Sharm El-Sheikh as he makes his way to Cambodia for the annual U.S.-ASEAN summit and the East Asia Summit, then on to Indonesia for a G20 summit. In his address to delegates he stated he wants to “build on global climate progress. The science is devastatingly clear, we need to make vital progress by the end of this decade.”
Riding high following the better-than-expected results in the US midterms earlier this week, he wasn’t met with open arms by climate activists. American grassroots campaigners at COP27 have called on Biden to declare a climate emergency and listen to their concerns on domestic challenges.
However, Biden has put the US back on the positive climate track. When he was elected to office in 2020, he re-joined the Paris Agreement and has since passed a $369bn package of climate investments that could cut US greenhouse gas emissions by 40%.
Meanwhile, Speaker of the US House of Representatives, Nancy Pelosi – part of the Congressional delegation – said during a debate that the fight against climate change should be about more than just survival. She praised the Inflation Reduction Act (IRA) as “ground-breaking” and Joe Biden for making climate change “part of his agenda”.
While today is decarbonisation day, those representing the fossil fuel industry have had their say on the future of climate change, positioning natural gas as a transition fuel.
Vicki Hollub, CEO of Occidental Petroleum, (one of the US’s largest oil and gas producers and a major producer in the prolific Permian oil basin) stated at an event: “People who run round saying ‘oil and gas needs to go away’ have no clue what that would mean. I’m saying the world is responsible … Don’t ask me about oil and gas without taking some responsibility yourself and helping others understand.” Interestingly, Occidental Petroleum was ranked 55th in a Carbon Majors Report, listing the top 100 companies responsible for 71% of global emissions between 1988 and 2015.
Meanwhile, analysis from Global Witness found that over 636 fossil fuel lobbyists are at COP27. That’s an increase of more than 25% from COP26 in Glasgow. If you are wondering where they have come from, 29 countries brought 200 fossil fuel lobbyists as part of official delegations. Hollub had complained earlier in the year that oil and gas companies were not allowed into COP26 negotiations and stated that she sees a place for these companies in future COP negotiations.
Protestors are an important aspect of COP and the climate agenda. Decarbonisation Day saw activists speak out against investment in fossil fuels. They also reiterated calls for harmful emitters to pay more to address the impacts of climate change in poorer countries in Africa. To put it into peresective, Africa is vulnerable to the consequences of climate change but is only responsible for 4% of worldwide emissions.
Progress has been made during Decarbonisation Day. Alok Sharma, COP26 President, celebrated the one-year launch anniversary of the Breakthrough Agenda. It was aimed at reducing emissions across five key sectors – Power, Road Transport, Steel, Agriculture and Hydrogen. Signatories include the G7, China and India.
Meanwhile, President Biden launched a new initiative to support the Egyptian Government in achieving 10GW of new wind and solar energy. Additionally, the US and European Union have a joint agreement (US-EU methane deal) to reduce emissions of methane from the fossil fuel sector and are hoping other nations will sign up.
Tomorrow is Adaption and Agriculture day with a break on Sunday and Gender Day starting the second week of COP27 on Monday next week.