Good or Bad COP – What’s at stake and how will it be judged?

Compared with the somewhat more benign backdrop to COP26 and Glasgow 12 months ago, the political conditions underpinning COP27 are rocky.

Above all, Russia’s invasion of Ukraine has had a chilling effect. This is not only in the European neighbourhood, owing to Putin’s weaponisation of gas supplies. War in Europe has also had a destabilising impact on the already tense US-China political relationship, forced nations outside the West to pick sides (and therefore been responsible in part for OPEC+’s recent decision to ignore President Biden’s entreaties to increase oil production), and is disrupting the G20 – where the most contentious issue is Putin’s invitation to the summit in Indonesia on 15/16 November (unhelpfully coinciding with the COP’s second week).

Moreover, the war has forced energy security to the top of the political agenda during 2022 putting – at least for the first half of this year – ambitious climate action on the back-burner. Consequently, few governments have heeded a key element of the COP26 Glasgow Climate Pact: the request for countries to “revisit and strengthen” their climate pledges by the end of 2022. As the UN Emissions Gap Report published last week showed, only 24 (out of 193 parties to the UNFCCC) have submitted new or updated NDCs since Glasgow. Of those, Australia and possibly India represent enhanced ambition; others, like the UK, have just been going through the motions. The UN report spelled it out in grisly detail: the emissions reduction pledges in existing NDCs would go way beyond 1.5C, cumulatively keeping the planet on track for about 2.5C.

This scaled-back ambition in a year that, despite being more of a La Nina than El Nino, has continued to witness proliferating extreme weather events globally.

Reasons To be Cheerful

All that said, the last three months have given some reasons to be cheerful. The bolt from the blue, when many had given up on meaningful US domestic climate action, was August’s passage of the US Inflation Reduction Act (IRA). Early reports are that the measures the IRA is introducing – especially in galvanising investment in clean energy – will be a game-changer in the US and, importantly, enable the Biden administration to look international partners and peers in the eye. The IEA highlighted this as a key development in its 2022 World Energy Outlook published last week; as it also concluded that the RePowerEU plan (Europe’s response to reduce dependence on Russian oil and gas) should actually accelerate decarbonisation in the EU. Maintaining European political unity over the winter will be challenging; but last week’s meeting of EU Environment Ministers went well enough, agreeing a plan for the 2030 Fit for 55 transition package (including a more ambitious 2030 emissions target) to be concluded by year-end. And just this week: Lula’s astonishing return to power in Brazil, demonstrating that the climate-denying populism of leaders like Bolsonaro may have its limits.

While these developments provide some optimism that climate ambition can go back on the front foot in 2023, one other contentious issue will take centre-stage in Sharm el-Sheikh: climate finance, and the widespread view in the developing world that the West has broken its promises in providing insufficient support to combat the effects of climate change. The divide is captured in three overlapping issues:

The failure of the Global North to keep its pledge to provide $100 billion per annum to developing countries in climate finance support, the promise made in the wake of the Copenhagen COP in 2009 which has been a running sore ever since;
Linked to this, that the developing world is not receiving enough in adaptation finance, to help those countries most affected by the physical impacts of climate; and
The Loss and Damage debate. This encapsulates the assertion by many developing countries that the old industrialised world is historically responsible for climate change and should compensate them for the costs. UN Secretary-General Guterres has said that delivering on a loss and damage mechanism at COP27 will be important for rebuilding trust between the developing and developed world.

These issues also risk being conflated with others particularly relevant to this “African COP”. One such is the call from a number of African governments like the Egyptian hosts and Senegal (despite failing to persuade the African Union to agree a common position) that fossil fuels – especially gas as a “transition fuel” – are necessary to support African economic development and access to energy.

Civil society organisations based in Africa are mounting a vigorous campaign against this in the form of Don’t Gas Africa, which argues for a clean energy transition to meet Africa’s economic and development needs; campaigners are also critical of some European countries whom they say haven’t helped by lobbying African producers as an alternative to Russian gas.

What is a Good or Bad Outcome?

Against this unpromising backdrop, the elements of a bad outcome could be bad indeed: the US and China shouting publicly at each other with no accommodation (despite John Kerry’s efforts, there is no sign of any joint statement which at least saved face for the climate relationship during Glasgow); Russian and Saudi (never constructive UNFCCC players) trouble-making behind the scenes; bust-ups between the West and developing countries about climate finance, symbolised by negligible progress on loss and damage; culminating in a failure to agree a text at the end of the COP.

This would obviously be dreadful news for the UNFCCC process as a whole, and heighten concerns about whether prevailing global headwinds are making it too difficult for the international community to coalesce around common ambition – in the teeth of the escalating climate science. It would also mount major obstacles for 2023 before a vital COP within the Paris timetable: COP28 in Abu Dhabi next year, when parties will conclude and report on the Global Stocktake (GST) – the comprehensive UNFCCC assessment of whether the international community is on track to meet the Paris goals. In short, the GST is meant to be the verdict on “keeping 1.5C alive”.

Heads of government have seemingly become more alert to the risks of failure at COP27 and its implications for the UN negotiations as a whole. At least 90 heads of government will be in Sharm el-Sheikh for the “World Leaders Summit” taking place on 7-8 November. The hope is that these talks, which President Biden and some of the European leaders will attend, can set a constructive tone and get stuck into some of the weighty issues circling COP27 : decarbonisation, adaptation, finance, and also food and agriculture.

Some decent outcomes could then potentially follow in the more optimistic scenario, viz:

A climate finance package (what UNSG Guterres calls a down-payment for the developing world) which plays into a loss and damage mechanism. There may be more large transition programmes announced as per the South Africa JET-P in Glasgow (JET-Ps for Vietnam, Kenya, Senegal, India and Indonesia have all been mooted). The Global South will be scrutinising that any such packages include new money, and grants as well as loans. (It would also help if, 12 months on, granular detail is finally unveiled about how South Africa’s JET-P can enable the country to handle an orderly economy transition while reducing its emissions.);
A road-map to COP28 which still leaves open the space for updated and more ambitious NDCs (eg the EU’s revised 2030 target by year-end);
Some practical transmissions trajectories. 2021 was the year for long-term (2050, 2060, 2070) net-zero targets; nearer-term targets are needed in 2022/2023 to lay the pathway for the GST and the decade as a whole. Many of the negotiators will hope this gives them enough to claim that the 1.5C goal remains alive.

One cautionary note: the questions about the right to protest and the freedom of manoeuvre for cvil society/climate activists at this COP. There may be a tension (and likewise at COP28) in Sharm el-Sheikh which was not present in Glasgow.

What does all this mean for Carbon Tracker’s activities at COP?

Our principal report launch will be on Africa’s Clean Energy Transition. This will be on point for some of the most prominent issues to surface in Sharm el-Sheikh. The report is likely to address arguments in favour of cheap renewables as an economic and development pathway in Africa, and emphasise the risks of stranded assets from expanded oil and gas production; thus placing Carbon Tracker alongside those advocating renewables (ranging from the IEA and the UNSG to the Don’t Gas Africa campaigners) as a paramount solution to the energy trilemma (security, affordability, sustainability).

Carbon Tracker’s other activities and events at the COP will highlight:

The role of private finance. The launch of GFANZ (Glasgow Financial Alliance for Net-Zero), was one of the more eye-catching announcements at COP26 – witness Co-Chair Mark Carney’s declaration that the alliance represents over $130 trillion of private capital committed to transforming the global economy for net zero. Carney and co will be expected to present progress in Sharm el-Sheikh, against disquiet that net-zero criteria for members are being watered-down (cf last week’s announcement to decouple GFANZ from Race To Zero criteria) in order to keep the broad coalition in place. The importance of private finance reads across directly to Carbon Tracker’s work on the climate accounting and disclosure agenda (ref our recent Still Flying Blind report). Financial institutions probably won’t turn up in the numbers they did in Glasgow and Paris in 2015, but that won’t dilute the importance of the private finance theme;
The energy transition, and the challenges of an orderly transition away from fossil fuels to a clean energy-based economy. Essentially, the transition reaches into all the key policy issues at the COP: why Global North countries should be first movers on decarbonisation; support for developing countries themselves to transition; how to make the transition equitable as well as orderly. Bound up intrinsically with the climate emergency, this question of a managed phase-out of fossil fuels will be a defining challenge for the 21^st century – and must be gripped by politicians without any further delay.