COP27 climate summit focuses on who will cover the costs

The COP27 climate summit opens on Sunday in Egypt and we can expect some fierce debate on the next financial steps to stop the world from meltdown over the next century. And who will pay.

Global leaders, including PM Rishi Sunak, will assemble in the coastal resort city of Sharm el-Sheikh to continue the work started with the original UN climate agreement in 1992 and the first Conference of Parties (COP) in 1995.

While there is a conference segment on energy, it’s not expected that COP27 will deliver immediate solutions to the current global crisis around power, nor financial support for businesses, organisations and households struggling to cope with rising utility and other fuel price hikes.

In the short term the only practical strategy is to reduce energy consumption. The government warns that it’s going to be a “difficult winter”. And next Spring business energy prices will rise again when the energy bill relief scheme ends so companies, schools and hospitals should be focused on energy efficiency to minimise costs.

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King’s summit

Meanwhile, we will also see former PM Boris Johnson at the summit but not King Charles, a passionate advocate for action on climate and protection of the environment. The King had been “advised” by short-term PM Liz Truss not to attend and this was confirmed by Sunak.

The official line is that the King is comfortable with the advice but there are sources suggesting he was “champing at the bit” to add his voices to discussions in Egypt.

And as a signal that he wishes to continue making a contribution, the King will host a pre-conference reception at Buckingham Palace today (Friday, November 4th), for 200 business leaders, politicians and campaigners,  and Sunak is scheduled to attend this gathering as well, which marks the end of the UK’s hosting of COP26.

At that event in Glasgow a year ago, the King (then Prince of Wales) gave an impassioned speech about the urgency of the challenge and the need for the global response to be put on a “war-like footing”.

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Economic issues

Sunak will be in Egypt after originally declining the invitation, with Downing Street advising that pressing economic issues took precedence. As well as the Autumn Statement on November 17th, the day before COP27 ends, the PM has to prepare for the G20 Summit in Bali on November 15-16th.

But the decision was hotly condemned by a wide range of commentators and politicians, taken as a sign that climate change was not high on the new government’s agenda, particularly with the demotion of COP26 President Alok Sharma from Cabinet.

Sharma will continue to lead the UK negotiating team in Sharm el-Sheikh and the foreign, business and environment secretaries, will be there too, along with top representative of more than 200 governments. Environmental charities, community groups, think tanks, businesses and faith groups will also take part.

COP27 will open against a backdrop of more extreme weather conditions, record temperatures and climate-related disasters, particularly in Pakistan, where more than 1,000 people died in catastrophic floods that also displaced tens of millions, with a third of the country under water.

Floods and storms in southern Africa early this year killed hundreds of people and severely disrupted economic activity while severe drought in the Horn of Africa is causing mass starvation. Droughts have also severely affected China’s food and energy production, and people are suffering water and power rationing.

And Europe has been through its worst drought in 500 years as well as scorching heatwaves.

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Temperature targets

The summit also comes at the same time as the latest report by the UN Framework Convention on Climate Change warns that government plans to cut greenhouse gas emissions fall far short of the goal of keeping global warming to 1.5C (34.7F) by the end of the century.

The UN Intergovernmental Panel on Climate Change (IPCC).estimates that half the world’s population could be exposed to life-threatening heat and humidity if temperatures rise 1.7 to 1.8C above 1850s levels.

Seven years ago, 194 countries signed the Paris Agreement pledging to “pursue efforts” to limit global temperature rises to 1.5C. Progress has been numbingly slow while climatic conditions have deteriorated.

The Lancet Countdown report advised last month that climate change is also severely impacting people’s health around the world. The report includes the work of 99 experts from organisations including the World Health Organisation (WHO) and led by University College London.

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COP27 key focuses

The climate summit has three key focuses:

  • Technical support and funding for developing countries
  • Helping countries to prepare and deal with climate change
  • Reducing emissions.

Underpinning all this are the big questions – how to fund climate mitigation and who is going to pay. We can expect some robust discussions around this, particularly as financial planning and execution were not fully resolved at COP26.

Finance has long been a thorny issue at the COPs. Way back in 2009, developed countries promised that by 2020 they would provide $100 billion a year to developing countries to finance emissions reductions and climate change adaptation.

We missed that target, moving it back to 2023 but in Glasgow, Sharma positioned the financial support as  “totemic”, being crucial to maintain trust between the major polluting countries and those suffering the ravages of global heating.

But the cash is not flowing and there are few signs that the money tree will be growing in the COP over the next few years. As governments struggle with stagflation and recession, there are growing calls to involve the private sector.

Loss and damage

Loss and damage finance is a part of the money matrix, another issue left stranded in Glasgow a year ago. It’s a huge issue with vulnerable countries pleading for help for 30 years while being met with fierce resistance from the big greenhouse gas (GHG) emitters.

The developing nations have lost patience and the climate catastrophes this year will only serve to fuel their rising anger, so we can expect a fiery exchange of views as some richer countries push back against a settlement that could leave them with a climate cash commitment spanning decades.

However, the European Union has again affirmed a “strong commitment” to deliver on the collective $100 billion a year climate finance mobilisation goal as soon as possible and said it expects the goal will be met in 2023.

The 27th COP in Egypt will also try to pick up some dog-ends from Glasgow and establish a global carbon market to price the effects of emissions into products and services globally while pushing for more pledges on forest protection and methane emissions reductions.

There will also be further drives to reduce coal use but we can expect very strong pushback from the powerful fossil fuel lobby and the nations with high coal dependency, such as such as China, India, Brazil, Indonesia and South Africa.

After the opening weekend sessions, there will be themed days for detailed discussion and announcements including energy, water, finance, decarbonisation, adaptation and biodiversity. It’s going to be an energetic and often fraught 13 days from November 6-18th, but at the close, we will have a much clearer view of whether we stand a chance of effectively limiting social and economic damage from climate change.


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