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Carbonsink’s in-depth series on COP27 for EticaNews

The 27th World Climate Summit ended on Sunday 20 November after two weeks of negotiations involving delegates from nearly 200 countries including heads of state, ministers, civil society and private sector representatives. The final agreement, signed by the Plenary Assembly, announces some important steps forward in global climate action, but also highlights the need to accelerate political dialogue and economic support to address current challenges.

The most significant result of this Cop is the decision to establish, for the first time, a new instrument for loss and damage, to compensate for climate change losses and damages suffered by the most vulnerable countries, the only pillar of the Paris Agreement (unlike mitigation and adaptation) that does not yet have solid financial support. A transitional committee will have to prepare a draft to be presented at the next Cop28 in 2023 for the operational start of the fund, which will thus take shape after more than 30 years of requests from countries most exposed to the climate crisis. Although the final document does not offer all the answers on this new fund to date, it does open up room for future negotiations to define its structure, funding mechanisms and how resources will be allocated. “The announcement offers hope to vulnerable communities around the world who are struggling for their survival due to climate stress. And it gives credibility to the COP process,’ said Sherry Rehman, Minister for Climate Change in Pakistan, a country that has too often provided reminders of the destructive force of climate change. Also to be followed is the evolution of China’s role in this regard, classified since 1992 as a developing country, and therefore with no obligation to provide economic support to others, but whose role may soon change.

The Final Accord of Cop27 confirms the Glasgow target of keeping global warming within 1.5°C of pre-industrial levels, recognising that to achieve this a 43% cut in emissions by 2030 compared to 2019 will be necessary. However, there are few references to addressing the main cause of global warming, fossil fuels. In fact, there is no mention of reducing or eliminating oil and gas, but only of phasing out coal, which is not compensated for, in fact keeping the same formula as negotiated at Cop26. With the current commitments to decarbonisation, however, the reduction to 2030 would only be 0.3% compared to 2019, a figure that must necessarily push states to update and increase the ambition of their decarbonisation targets (Nationally Determined Contributions) over the next year. To reach the goal of net-zero emissions in 2050, the negotiations foresaw the need to increase investment in renewables to USD 4 trillion per year until the end of the decade, and USD 4-6 trillion to reduce emissions from the economic system.

As far as climate finance is concerned, there has been no progress on the issue of the $100 billion per year that industrialised countries should pay to developing countries to manage the effects of climate change and switch to renewable energy, nor has there been any agreement on the revision of this framework post-2025. On the other hand, the discussion initiated on the need for a reform of the global financial system, with an increasing focus on the mechanisms of multilateral development banks, should be noted as a positive element. Facilitating access to credit and reducing recourse to debt are two fundamental issues for increasing the ability of countries with weaker economies to access climate finance, also favouring opportunities for local economic development.

Also open for new consultations is Article 6 of the Paris Agreement, which regulates the international carbon market system, and in particular the system that allows countries to trade emission reductions and removals with each other through bilateral or multilateral agreements (Article 6.2), and the establishment of a market mechanism (Article 6.4), also with a view to incentivising and facilitating the participation of public and private entities.

The definition of procedures and the commissioning of collaboration mechanisms through carbon markets are crucial, both to accelerate the reduction of greenhouse gas emissions and to channel climate finance, and to consolidate best practices according to which the private world will be able to participate in climate action,” says Aurora D’Aprile, Managing Consultant, Climate Policy, Finance and Carbon Markets at South Pole, a leading group for climate change mitigation solutions and projects, which has been operating in Italy through Carbonsink since 2022. “At Cop27, progress on Article 6 was incremental, but nonetheless a manifestation of a trend that will strengthen in the coming months and years. Ensuring maximum integrity and transparency will be essential for the development of the new mechanisms‘.

Despite numerous announcements and pledges, Cop27 closed with a renewed appeal by UN Secretary General António Guterres to world leaders for more concrete commitment, recalling the urgency ‘to take a giant step forward on climate ambition’. A key space for governments and public and private entities to work together on climate, Cop27 highlighted the need to accelerate governments’ accountability and political agreement, according to the principle of common but differentiated responsibilities, increase the ambition of climate commitments and finance, and increase synergies between sectors.

But what were some of the most important announcements of the last two weeks? Here is a selected review of the good news you may not have heard about.

To increase climate finance:

  • Team Europe Initiative. The European Union and the African Union have announced a new Team Europe Initiative on Climate Change Adaptation and Resilience in Africa, which will bring together existing and new climate change adaptation programmes worth more than EUR 1 billion and enhance their impact. The total EU contribution includes EUR 60 million for loss and damage.
  • Global Investor Statement. 602 investors, representing nearly USD 42 trillion in assets under management and coordinated by The Investor Agenda, called on governments to create more favourable conditions for the flow of private climate capital, and to commit to mobilise finance on the scale needed to meet the Paris Agreement targets.
  • Fast to transform agriculture. The Food and Agriculture for Sustainable Transformation (Fast) programme was launched with the aim of improving the quantity and quality of climate finance contributions to transform agriculture and food systems by 2030.

Accelerating climate action:

  • European Union raises climate ambition. The EU has announced a new target to reduce greenhouse gas emissions by 57 per cent compared to 1990 by 2030, an increase of 2 per cent compared to previous targets.
  • Less fossil fuels. A group of countries (including the US, EU, Japan and Canada) pledged ‘to take immediate action to reduce emissions associated with the production and consumption of fossil fuels’, reaffirming the commitment made at Cop26 to cut methane emissions by 30% by 2030 compared to 2020. France and Spain, on the other hand, pledged to stop sales of petrol vehicles by 2035, five years earlier than previously planned.
  • Carbon dioxide removal 2030 breakthrough. The Carbon Dioxide Removal 2030 Breakthrough was released, which envisages the elimination of 3 billion tonnes of CO2 per year by 2030, of which 500 million tonnes per year will be stored for at least 100 years.
  • Steps forward from the private sector. Ten maritime organisations and green hydrogen producers have committed to produce and distribute at least 5 million tonnes of green hydrogen by 2030 to provide the 5% zero-emission shipping fuel needed to put the global maritime sector on a decarbonisation pathway aligned with the Paris 1.5°C target.

Building credibility:

  • New UN guidelines against greenwashing. The UN launched Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities and Regions, new structured guidelines to ensure credible and responsible climate commitments.
  • Environmental Impact Disclosure in the US. The White House has announced that major federal contractors will henceforth be required to disclose their environmental impact through Cdp and set science-based decarbonisation targets.
  • New EU rules on sustainability reporting for multinationals. Although unrelated to Cop27, also coming in these weeks is the announcement by the European Parliament of the adoption of legislation according to which, starting in 2024, large companies will have to disclose information on their impact on the environment, human rights and social standards.

A full list of the Cop27 announcements can be found here.

Article originally published on EticaNews here