The COP climate conference is horribly flawed (and we have thoughts about that), but some real stuff was accomplished. Don’t write it off entirely.
The easy interpretation of the recently concluded COP27 in the Sharm El Sheik Egyptian resort was that it was a debacle. It was marred by overflowing raw sewage, abysmal treatment of protesters, failure to protect women attendees, and a vast overrepresentation of fossil fuel interests at the event. “We cannot afford to have another climate summit like this one,” says Manuel Pulgar-Vidal, climate and energy lead for the World Wide Fund for Nature and a former COP president.
However, COP27’s biggest problem is time. It’s running out. Yet, COP organizers insist on a laborious consensus approach requiring widely disparate nations to agree on everything.
Still, the annual COP, however imperfect, remains a critical convening vehicle. Headlines aside, delegates doggedly worked away at an increasingly difficult climate puzzle. At Climate & Capital, we refuse to write it off. Now that the dust has settled after COP27, here’s a wrap-up of the important things that happened.
U.S. caves on Loss and Damage payment for climate damage, but…
COP’s most significant accomplishment was to set up an international mechanism to help poorer countries recover and adapt to climate-related disasters. It represents a shift in mindset — with wealthier nations acknowledging their crucial role in causing global warming and its disproportionate impact on the poorer countries, especially in the global South. Surprising many, the U.S. did an about-face in the last hour and stopped blocking the proposal.
For a decade, the U.S. and the EU have failed to live up to a $100 billion per year pledge to help poorer countries shift to clean energy. Can we expect anything different now?
“At the beginning of these talks, loss and damage were not even on the agenda, and now we are making history,” says Mohamed Adow, executive director of Power Shift Africa. The loss and damage fund, he said, is something “vulnerable countries have been calling for since the 1992 Rio Earth Summit.”
But, as Adow noted, establishing a fund is one thing. Finding the money for it is another. “What we have is an empty bucket. Now we need to fill it so that support can flow to the most impacted people suffering at the hands of the climate crisis. ”
Hashing out the details — who will give, when, and who will receive — will be devilish. China and India are resisting. Conservatives in the U.S. show little interest. “Sending U.S. taxpayer dollars to an UN-sponsored green slush fund is completely misguided,” Sen. John Barrasso (R-WY) said. Adds Paul Bledsoe, a climate adviser under President Bill Clinton, climate reparations to distant nations will be “an absolute political domestic disaster” and “cripple” President Joe Biden’s 2024 re-election chances.
The U.S. and the EU won an agreement that additional donors could include China and Saudi Arabia. But for now, the UN continues to classify China as a developing country, and China fiercely resists moving into the developed category. That exempts the world’s second-largest economy — and currently the biggest emitter of greenhouse gasses — from having to provide climate aid,
From now on, the UN estimates that increased funding needed to help vulnerable nations adapt to the climate emergency will be between $160 billion to $340 billion by the end of the decade and up to $565 billion by 2050.
Our take:
- There is no guarantee that wealthy countries will pay. For a decade, the U.S. and the EU have failed to live up to a $100 billion per year pledge to help poorer countries shift to clean energy. Can we expect anything different now? “America is culturally incapable of meaningful reparations,” says Bledsoe. “Having not made them to Native Americans or African Americans, there is little to no chance they will be seriously considered. It’s a complete non-starter in our domestic politics.”
- China also cannot continue to have its way: The world’s largest emitter of carbon needs to join the Northern Hemisphere in supporting developing countries.
$3.1 billion on Climate Early-Warning System
In a closely related development, COP27 committed to $3.1 billion in providing universal early warning systems to prevent developing countries from being blindsided by climate-related disasters. Half the countries in the world lack advanced warnings of climate violence. Filling the gap by 2027 is “low-hanging fruit,” says the World Meteorological Organization. It’s a promising investment — spending $800 million on prevention through early warning could save $3 billion to $16 billion per year, according to the Global Commission on Adaptation.
Our take:
- This is a perfect public-private partnership opportunity with governments and philanthropic giants like Bezos’ Earth Fund.
A key political figure re-engages
An old friend returns to COP. Brazilian climate champion Lula da Silva is back after voters dumped Trump clone President Jair Bolsanaro for Lula. Like Australia’s new Labor government headed by Anthony Albanese, Lula has pledged to reverse the anti-climate policies of his predecessor. First on his list is halting runaway Amazon deforestation. If the world is to meet a 2050 goal to keep global warming below a 2.0-degree rise, preserving the world’s largest forests is essential. “If the Brazilian election would have gone the other way, then I think we would definitely be beyond a tipping point, and we would not have a chance for 1.5,” says Leila Salazar-Lopez, the executive director of Amazon Watch, a nonprofit organization. “There is an opportunity to protect the Amazon rainforest, which is critical for protecting our global climate.”
At COP, the three countries home to more than half of the world’s tropical rainforests — Brazil, Indonesia, and the Democratic Republic of Congo — pledged to work together to establish a “funding mechanism” to preserve the forests, which help regulate the Earth’s climate. The three countries said they would cooperate on sustainable management and conservation, restoring critical ecosystems, and creating economies that would ensure the health of both the people and the forests.
Just as we need to get off fossil fuels, we need a plan to aggressively transition to sustainable food oil and more sustainable wood alternatives.
Our take:
Having Lula back is key. But commercial development of rainforests will continue until there is a sustainable and lucrative alternative to curb demand from voracious global consumers:
- Palm oil sales reached $50.6 billion in 2021 and are expected to rise to $65.5 billion by 2027. The expansion of palm oil plantations is a primary reason forests are being destroyed in many parts of the world.
- Between 2001 and 2015, the global beef industry turned 45 million hectares of rainforest into cattle pasture — a rate that is five times higher than for any other analyzed products.
- Soybeans, widely produced as animal feed, destroyed another 8.2 million hectares of forests in that same period.
- Tropical rainforest wood remains immensely popular with American homeowners and other global markets. Between 2017 and 2021, 469,613 m³ of Ipe timber was exported from Bolivia, Brazil, Paraguay, and Peru to meet the insatiable demand in the U.S. for wooden decks and home exteriors. Last year, COVID-driven home remodeling caused demand for Ipe to grow more than 80%.
The latest deal will do little to curb this demand and has no financial backing. There can be no solution to rainforest destruction until there are legitimate and sustainable alternatives to palm oil and rainforest wood. Just as we need to get off fossil fuels, we need a plan to aggressively transition to sustainable food oil and more sustainable wood alternatives.
Surging public-private partnerships
At Sharm El Sheik, one thousand feet from the formal UN delegate negotiating ‘Blue Zone,’ was the Climate Action Innovation Zone. Here cross-sector public-private partnership discussions were in full swing. Despite suffering from COVID, U.S. Climate Czar John Kerry, with the World Economic Forum, also announced the expansion of the First Movers Coalition. This group of 65 companies with a collective market value of approximately $8 trillion — with $12 billion by 2030 on green technologies to decarbonize the cement and concrete industry and other hard-to-abate sectors. “This unprecedented $12 billion demand signal will bring competitive technologies to market this decade that are needed to decarbonize so-called ‘hard-to-abate’ sectors of the global economy,” Kerry said.
The talk in the Zone was also about another Kerry deal: The blockbuster $20 billion agreement negotiated in Bali by the U.S. and European counterparts to finance Indonesia’s transition from coal.
Our take:
Private capital smells opportunity in climate adaptation, and it’s moving faster than COP delegates to engage. To use Wall Street jargon,” blended finance can bridge the investment gap by enhancing the risk-return profiles.” Translation: If governments can cushion private capital from risk, it’s ready to invest.
Critical to success will be the next president of the World Bank. The World Bank is the largest global provider of financing for climate projects, spending some $31 billion, according to the Organization for Economic Cooperation and Development. However, the OECD estimates that $6.9 trillion annually is required up to 2030 to meet global climate and development objectives.
The World Bank’s global balance sheet and Special Drawing Rights, or the ability to create money, will be critical to future public-private deals. However, the problem is its leader David Malpass, a Trump appointee and climate skeptic. During his tenure, the World Bank has spent $14.8 billion supporting fossil fuel projects. His appointment ends in 2024.
Unless substantial changes are made to achieve a more diverse leadership and less fossil fuel influencing, then cancel COP28
What next?
COP27 was no stellar example of climate action, but there were significant outcomes, and more will come of it as nations return home and work on what they’ve committed. That said, we can’t help but ask, as the dust settles on COP27 and UN organizers begin planning for — you guessed it — COP28 next November in the United Arab Emirates, is this the best vehicle for climate progress? We return to our earlier story by editor Blair Palese, “Memo to UN Sec. Gen. António Guterres re: COP: It’s time to shake it up!”
Among our ten recommendations for how to make global climate talks work are the following:
- Unless substantial changes are made to achieve a more diverse leadership and less fossil fuel influencing, then cancel COP28. Skip a year, save millions in costs and tons in carbon air miles, and spend two years getting things happening virtually. If COVID taught us one important lesson, you could meet in person to work together and make progress.
- Take a page out of Kim Stanley Robinson’s book and create a real Ministry For the Future with absolute authority and funding to get climate action happening fast. Establish it with a standing committee with natural powers and a war room mentality commensurate with the scale of the global climate challenge we’re facing. At a minimum, make climate action a standing agenda item for the G-20.
- Stop all commercial sponsorships of COPs and ban all paid lobbyists from all global climate talks and meetings. It’s a no-brainer!
Now’s the time to rethink how to ramp up global climate action. Let’s start by agreeing the business-as-usual approach the UN and global member states are currently working under is not the answer. Chop chop planet earth; the climate clock keeps ticking!
NOTE: A special thanks to Ed King of the Global Strategic Communications Council for his excellent daily updates from COP27 that we found invaluable in allowing us to follow the critical issues without burning carbon miles to fly to Egypt and go on to research the outcomes.
