After two exhausting weeks during which emotions oscillated between deep frustration and glimmers of hope, COP27 ended in the early hours of Sunday, Nov 20th with the adoption of the Sharm el-Sheikh Implementation Plan.
As exhausted delegates and observers head home, each is satisfied on some counts and disappointed on several others. This is the nature of international negotiations.
The breakthrough agreement
The key success was the agreement to establish a fund for “Loss and Damage” experienced by vulnerable countries hit hard by climate disasters. After discussing three very different options, agreement was reached to create a Transition Committee that will make recommendations in a year’s time, at COP28, on how this new funding mechanism should be implemented. The committee is expected to establish institutional arrangements and modalities for the Loss and Damage Fund; identify and expand funding sources; and ensure coordination and complementarity with existing funding arrangements.
The demand to acknowledge, recognize and compensate countries that have contributed the least to climate change but are suffering major economic and non-economic losses as a result, goes back more than three decades. In recent years, global heating has led to more frequent and intense extreme events, both slow and rapid onset, across the world. The UN Intergovernmental Panel on Climate Change, IPCC’s 6th Assessment report, of which I was a Lead Author, documents losses and damages in almost all regions and sectors, while recognizing data and information gaps.
At our side event during the first week of the COP, Helvetas created a space for many voices from our partner countries to share and highlight their experiences. In this way we documented the completely different frequency, intensity and scale of extreme weather events experienced in recent years, and the huge scale of loss and damage, which is beyond the capacity of communities and national governments to address.
A video from Pakistan enabled delegates to see the extent of this year’s flooding, the role of climate drivers and the continuing impacts in the form of human displacement, disease, and hunger. The combined efforts of the government, humanitarian and development actors such as Helvetas, are completely inadequate to redress the estimated loses of USD 30 billion.
Slow onset disasters such as the deepening drought in the Horn of Africa are not so immediately visible but are pushing millions of people into a deeper poverty trap, denying them their basic human rights. For this largely pastoral community, a functioning livestock market that allows them to sell animals at a fair price during periods of distress and drought, and restock when conditions improve, is vital for survival. Helvetas is one of the few actors working with cattle traders, incentivizing them to continue their operations as market intermediaries. However, such innovations need addition funding to scale up.
In Bangladesh, life for people in the coastal regions is becoming increasingly precarious with rising sea levels. Migration is an important adaptation strategy but much of it is unplanned, under distress, leading to further impoverishment and the erosion of basic rights. Working with the CJRF, Helvetas is helping people to make informed migration decisions, including through peer coaching.
In the Andean region, home to vitally important agro-biodiversity for major food and cash crops such as potato, maize and cocoa, climate change impacts are acutely felt. The IPCC 6th Assessment Report found that about 84% of endemic species in mountainous regions are threatened with extinction due to global heating. Local communities have managed and conserved this biodiversity over generations through their indigenous knowledge. Not only is this invaluable resource for future adaptative capacity now at risk, but also many associated cultural practices. This is an example of non-economic losses and damages due to climate change.
Climate-vulnerable countries need urgent support
What emerged from the COP27 discussions was that many climate-vulnerable countries need immediate assistance. Allocation of this money should be agile to reach the affected communities rapidly, without bureaucratic delays. There are gaps in the international finance landscape with few resources for disaster preparedness or for recovery. Furthermore, investments in recovery need to take an inter-generational perspective, reducing long term vulnerability and exposure and building adaptive capacities, such as training youth in new skills. While there are synergies with development, humanitarian and adaptation actions, there are also clear gaps. Recognition of the need for a specific Loss and Damage Fund after 30 years of struggle is certainly an achievement, but how it will be implemented is crucial.
There are important lessons to be learned from experience with the Green Climate Fund, the creation of which generated much hope and optimism. Access to it has proved to be highly bureaucratic and time consuming, making it beyond the reach of most developing countries and civil society organizations. The Adaptation Fund, on the other hand pioneered a simpler direct access mechanism but is chronically under-financed. Even rather humble financial commitments by large donors such as the USA and EU remaining unfulfilled from last year. Although the creation of the Loss and Damage Fund is a big step, it is currently an empty pot.
Ahead of and in the early days of the COP, various EU Member States including Austria, Belgium, Denmark, France, Germany, Ireland as well as the European Commission made loss and damage finance pledges. Although most of this money is not new or additional, this signal of support helped build momentum towards the establishment of the fund. Donors such as Switzerland which use their international cooperation budget for climate finance need to identify new and additional sources of funding. With the lost referendum on the CO2 law last year, Switzerland’s national policies remain caught in a pre-Paris Agreement era, constraining its role at the global level.
Ambitious mitigation actions are closely linked to loss and damage. Immediate actions that limit global warming to 1.5°C would substantially reduce projected losses and damages related to climate change. However, the heavy presence of fossil fuel interests at the COP ensured that this goal was barely discussed. The final text allows for development of gas and nuclear energy under the nomenclature of ‘enhancing a clean energy mix, including low-emission’. Africa’s gas resources were very much at the center stage in a context of European scrambling for alternative energy sources.
The issue of doubling adaptation finance, as agreed at Glasgow, was not addressed and will be on the agenda of COP28. Although a global goal on adaptation has been defined in the Paris Agreement, the bottom up process of identifying adaptation needs, measures to address them and estimate related costs, are challenging as they are essentially context specific. Developing countries still struggle to prepare their National Adaptation Plans (NAPs) and communications. A structured approach was agreed, with a possibility for a common framework, although it is not clear if this will address the real issues.
The magnitude of investment needed
It is estimated that a global transformation to a low-carbon economy will require investments of at least USD 4–6 trillion per year of which about USD 4 trillion per year need to be invested in renewable energy until 2030 to be able to reach net zero emissions by 2050. The global climate finance flows to developing countries in 2019–2020 is estimated to be USD 803 billion, about 30% of the annual investment needed. Shareholders of multilateral development banks and international financial institutions were asked to reform their practices and priorities, to align and scale up funding, ensuring simplified access and mobilization of climate finance from various sources. They were called upon to ‘define a new vision and commensurate operational model, channels and instruments that are fit for the purpose of adequately addressing the global climate emergency including deploying a full suite of instruments, from grants to guarantees and non-debt instruments, taking into account debt burdens, and to address risk appetite, with a view to substantially increasing climate finance’.
There are welcome references to biodiversity, food systems, water and forests. Respect for human rights was also included in the final text, at odds with the policies and actions of the host government towards its own citizens and some COP delegates. Many CSOs and activists at the COP reported constant and overwhelming surveillance.
Why participate in a COP?
With such mixed outcomes, does it make sense to engage and participate in a COP? While there are many reasons to be critical, including the huge carbon footprint, the COP is a uniquely democratic forum. In fact, there are at least three large parallel processes at a COP – the formal negotiations; thematic and advocacy presentations (side events) which are valuable for learning and networking; and a gathering of finance and businesspeople during which many deals are made. Everyone has an agenda and has the space to work towards it. The topics addressed are also expanding – on the one hand towards the inclusion of marginalized groups and regions, and on the other in addressing larger agendas such as the reform of global financial systems. Citizens of repressive regimes can find a safe space and build alliances. COPs are also a space where advocacy works - the creation of the Loss and Damage Fund being the latest example.