COP27 key outcomes: progress on compensation for developing countries, but more needed on climate justice and equity – THECONVERSATION

There were high expectations for COP27, the 27th Conference of the Parties to the UN Framework Convention on Climate Change.

COP conferences broadly provide a platform for the negotiation of international climate change agreements. This was to be the first COP held in Africa since 2016. It was also framed as the implementation COP, which would lead to action.

 

COP27 was expected to make progress on “loss and damage”. This is financing to compensate developing countries for the harm to the climate that has been caused primarily by the developed world.

 

The outcome – the establishment of a new fund for loss and damage – is a relief for climate activists and developing countries.

Below we unpack this, and other key outcomes from this crucial climate change conference.

 

Urgency, justice and equity missing in negotiations

Outside the formal negotiations, there were clear and consistent messages about the urgency of climate action from scientists, NGOs and climate activists. They gathered at the event and in small, peaceful protests. The same urgency wasn’t seen among party negotiators.

Inside the formal negotiations, mostly wealthy country parties pushed back on immediate action in these areas:

  • support for people displaced by extreme events caused by climate change
  • strong and transparent governance of carbon markets
  • the phasing out of all fossil fuels.

 

This disconnect was striking and has led to significant delays and setbacks in agreements relevant to climate justice.

Further, the decision-making process raises questions about the equity of different voices at COP, and whose reality counts. All decisions within COP are made by consensus, not a vote. Decisions can be overruled by one dissenting party.

There’s also inequality in representation of countries and the prevalence of lobby groups at COP27. Certain countries can support large teams of party delegates and technical support. Poorer countries can’t.

 

New fund for loss and damage

A significant achievement of COP27 was an agreement to establish a new fund for loss and damage finance.

This negotiation was very contentious, with some parties threatening to walk out at various points. The central tension was between developed and developing countries. Developed countries did all they could to avoid a new financing entity for loss and damage.

 

Developing countries are largely represented by the G77 and China. This is a negotiating group of 134 developing countries initially founded by 77 countries in 1964. Rich nations tried to divide the G77 and China negotiating group by arguing that China, India, and other less vulnerable countries should also have to pay for loss and damage.

It’s true that China and India are currently large emitters of greenhouse gases, but this approach shows a refusal to acknowledge the historical cumulative emissions mostly attributed to the early industrialisers.

 

The responsibility for cumulative emissions does vary based on which emissions are counted, how they are counted, and whether it is analysed on a per capita basis. However, North American and European regions stand out as the largest emitters.

 

While the agreement on a fund for loss and damage is a significant step forward, a lot of work needs to be done before it is set up. The parties agreed to set up a transitional committee to make recommendations for adoption at COP28, in November 2023.

 

Technical assistance to address loss and damage

An additional positive move was made with the agreement on the institutional arrangements to operationalise the Santiago Network, which was established at COP25 to help developing countries identify their technical needs and connect with providers of assistance to address them. For example, in the case of flooding, improved systems to prepare and implement early warning systems and evacuation processes.

The next step will be to identify the host for the Santiago Network Secretariat.

 

No decision on the governance of the Warsaw International Mechanism

The Warsaw International Mechanism (WIM) was established in 2013 to provide coordination and encourage dialogue on loss and damage. Unfortunately, discussions on the governance of the WIM went nowhere.

Parties could not agree on whether it should be under the governance of COP or the Paris Agreement.

Developed countries want the mechanism to be governed under the Paris Agreement alone. Developing countries want a dual governance system.

Governance under COP would hold developed countries to account, whereas the Paris Agreement has a paragraph which excludes liability and compensation.

 

Carbon market governance

There were similar tensions in the discussions around the governance framework for carbon markets.

Carbon markets allow countries or entities that can reduce or absorb emissions to sell them as carbon credits to high emitters. The markets can therefore reduce emissions and increase flows of climate finance if held to high standards of integrity and transparency.

 

However, new language in the decision text allows for confidentiality around the details of carbon credits. This could jeopardise transparency and accounting processes and reduce the likelihood of carbon markets contributing to mitigation.

 

New climate finance goal

This COP was supposed to develop a new collective quantified goal on climate finance, to replace the US$100 billion annual target which has not been met. It was also supposed to develop an action plan to double adaptation finance, which has not materialised.

 

The new finance goal has been delayed to next year, along with a status report on the commitment to double adaptation finance by 2025.

 

Various parties pointed out that climate finance should not worsen the indebtedness of developing countries. For the first time, the decision document acknowledged this issue. It also encouraged reform of the way multilateral development banks support climate finance.

 

Phasing out fossil fuels

This COP failed to get a commitment from all parties to phase out all fossil fuels.

Instead of committing to this obvious solution to reduce emissions, parties insisted on using the wording “accelerating efforts towards the phase-down of unabated coal power and phase-out of inefficient fossil fuel subsidies.”

 

“Unabated coal power” insinuates that coal (with carbon capture technology) could be continued. Specifying “inefficient fossil fuel subsidies” may allow for loopholes due to the definition of “inefficient.”

 

Moving forward

While COP27 has delivered significant progress on finance for loss and damage, it remains to be seen whether this will translate into action. The lack of progress on mitigation and adaptation is a worry. In failing to deal with the central challenge of reducing fossil fuel use and reaching agreement on further reducing carbon emissions, COP27 has not addressed the key challenges of climate change.

 

The UN multilateral processes that govern climate change need developed countries to seriously commit to loss and damage. And treaties must be given greater enforcement capabilities. The parties will also need to find a mechanism to place common interests at the top of the agenda, above that of party interests.

 

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