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Day 1: Climate matters and so does COP27
Expectations may be low for the COP27 UN Climate Conference but, as the 2022 SEC Newgate ESG Global Monitor has found, the public still expect their governments to act to lower carbon emissions around the world. Global finance has to do more to direct investment to the developing world.
Change is difficult at the best of times. These are not the best of times. A year on from the last such gathering in Glasgow there’s a host of reasons why expectations of making progress in the battle to lower global carbon emissions are low. A war in Europe, a global energy crisis and increased tensions between China and US are just a few of the most obvious issues.
If the politicians need reminding as to why they are travelling to Sharm El-Sheikh the recent SEC Newgate ESG Global Monitor Survey for 2022 makes for essential reading. It measures global sentiment on environmental, social and governance issues for a cross-section of a dozen countries around the world.
Despite the economic and geopolitical shocks of the past 12 months it’s clear that ESG is a global priority that is here to stay. Nearly half of those surveyed (46%) cited environmental concerns as the single most important issue. We want action but there is a lack of trust. National Governments were rated the lowest globally.
SEC Newgate UK has developed a Guide to COP27, detailing the agenda, key issues to watch and our views on the opportunities and stumbling blocks.
A focus on the climate needs of developing countries is certain to form a critical part of the debate at COP27. 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.
While the Global North has the vast majority of the climate finance investment to make, it is in the Global South that the greatest opportunities exist to bring about a real difference to lowering global emissions. According to the OECD the development finance system only mobilises around $40 billion in private capital annually, a mere 1% of the total investment needed.
There are no facets of our lives left untouched by Climate Change. It’s a fact that the trade-offs between financial institutions, government, industry and civil society which can resolve the complex challenges we all face, may be out of reach in the next fortnight.
Yet the global energy crisis is a reminder that the transition to a net zero world isn’t just an empty slogan. We need a faster transition to a cleaner, more affordable and secure energy system right now. Let’s be optimistic that, as the US civil rights campaigner Martin Luther King used to say, the “fierce urgency of now” helps make that a reality.
Day 2: Loss, damage and activism
Day two at COP27 has been dominated by two very different themes: Loss and damage, and activism.
Both have their roots wrapped in geopolitics.
On loss and damage, COP27 will be the first COP to put it onto the agenda as a topic for diplomatic discussion. Africa’s COP looks set to deliver the anticipated focus on how the global north compensates the global south for the cost and impact of global warming that has largely been created by richer nations’ industrial activities and consumption patterns but who’s impact will be most acutely felt by developing nations.
This was always set to be a crunch issue in Egypt, as the promised $100 billion a year that the G7 pledged to help developing nations adapt to and mitigate the impact of climate change has never been delivered, despite being originally made in 2009 at the COP15.
That failure prompted fury at COP26, it looked set to be a dividing line at COP27 and indeed it will be.
With a new ‘Cold War’ raging between China, Russia and NATO climate adaption finance is now a valuable diplomatic tool as well as a decarbonisation imperative and China has pledged to continue providing assistance to developing nations. Further movement from the G7 on reparation payments and support is arguably more likely given the need to secure influence. It’s one to watch during the next two-weeks at COP27.
Activism is the other elephant in the room with geopolitical roots. Greta Thunberg’s decision not to attend COP due to Egypt’s human rights record and also her belief that the Conference is a platform for greenwashing set the tone for a COP that has so far been marked by a lack of activism.
Alleged detentions of environmental activists and the high profile hunger strike of Alaa Abdel-Fattah, which has now escalated with him refusing water, is shining a light on Egypt’s human rights records and also the role of civic society in driving pressure on diplomats and politicians.
COP27’s aim to be the ‘implementation COP’ will be closely scrutinized by activists regardless of whether they are on the ground, on line or dispersed around the world. How they decide to act and make their voices heard is also something to watch for over the next two weeks, because they have certainly not gone away.
Today also started with warnings from the World Meteorological Organization that the past eight years have been the warmest on record and from the UN Environment Programme that without sustained progress on carbon reduction the world is on course for more than 2.4C of warming.
All this sets the scenes for a COP that will be fiery and unavoidably mired in geopolitical tension despite the need for collective action and the desire of the Egyptian Presidency for a focus on delivery and ‘implementation’.
One interesting developing story was revealed this morning by the Financial Times which ran an exclusive on US Special Presidential Envoy for Climate, John Kerry, who is alleged to be trying to build support for a framework that would see carbon credits offered to business to offset emissions with the credits earned by developing nations through switching energy production from fossil fuels to renewables. If delivered that would be potentially valuable tool in helping channel carbon reduction finance and projects to developing nations.
Day 3: Loss, anger and greenwash
Day three at COP27 and loss and damage – and reparation – continued to be a strong theme. Yet, so too was the lack of action taken by richer nations and business in driving decarbonisation efforts.
Tomorrow is finance day so we can expect that drive for financial support from the Global North to the Global South to continue to be a key theme as delegates look for ways to drive renewed action and progress to keep the 1.5C Paris pledge on track.
After a year of extreme weather, an energy crisis and huge geopolitical tensions, the abiding tone that has emerged so far from COP27 is anger. Directed at richer nations for their pledges to cut greenhouse gas emissions which have yet to go far enough and anger at the ongoing greenwashing that is used to cleanse reputations without cleaning the environment.
Today saw emotive speeches, including that of Mia Mottley, Prime Minister of Barbados, who lambasted rich nations for failing to act fast enough on climate change and to provide funding for adaption and mitigation infrastructure, and projects in poorer nations. She also suggested a tax on fossil fuel companies ahead of COP28.
Shehbaz Sharif, prime minister of Pakistan, said his country had become a victim of something which it had nothing to do with and called for funding from richer countries saying that Pakistan faced a ‘debt trap’ from the cost of adaption and the £30 billion cost of the recent devastating floods in the country that occurred ‘despite [Pakistan’s] low carbon footprint.
For business, COP27 has, unlike COP26, so far been relatively low on positive sentiment and the opportunity for business to play a role – although we can expect that to change as the agenda moves forward to the themed days, starting with Finance Day tomorrow.
One notable development for business from today’s proceedings was the launch of the punchily titled ‘The High Level Expert Group on Net Zero Emissions Commitments of Non-State Entities’ report which set out recommendations for business in developing net zero pledges in order to avoid accusations of greenwashing.
The report could mark a step-change in businesses being called out for greenwashing and certainly UN Secretary General Antonio Guterres made his views clear.
In the report he states that “We urgently need every business, investor, city, state and region to walk the talk on their net zero promises. We cannot afford slow movers, fake movers or any form of greenwashing.”
At the launch event for the report, he went further, accusing fossil fuel companies of ‘rank deception’ in making net zero pledges while at the same time expanding their operations.
Other key developments included:
- Norway has pledged to increase carbon tax to Euro 200 per tonne by 2030
- President Macron of France continuing to play a high profile role at COP27, saying that the war in Ukraine would not cause France to backslide on commitments to tackle climate change
- Ukrainian President Volodymyr Zelenskyy gave a recorded speech in which he warned that ‘many’ do not take the climate agenda seriously and he said that there cannot be any ‘effective climate policy without peace’. Adding that five million acres of woodland in Ukraine have been destroyed by the fire and reflected on the energy crisis that has led some nations to ‘resume coal-fired power generation’
After a relatively slow start, the pace at COP27 should start to ramp up as we move into the themed days and the diplomatic guts of trying to get pledges and agreements ratified. Many world leaders have either already departed or will be departing over the next couple of days leaving their negotiating teams to do the long hours and hard graft of negotiation.
The global news agenda is also being captured by many competing stories, including the US Mid Term elections. COP27 will have to drive significant progress and work hard to gain attention as it moves into next week. The lack of activists at the conference robs it of the energy that they would provide in keeping the world’s eyes on Sharm El Sheikh