COP27: Landmark deal for loss and damage agreed but progress on 1.5C questioned

Exhausted negotiators at COP27 finally agreed on a crucial cover text of the Sharm el-Sheikh Implementation Plan that draws the summit to a close, with a landmark new funding deal for loss and damage and some questionable language on energy that has left many analysts expressing concern as to the future of the 1.5C limit.

COP27: Landmark deal for loss and damage agreed but progress on 1.5C questioned

Image: : UN Climate Change - Kiara Worth

In what has been described by those attending as a chaotic summit, COP27 finally struck a landmark agreement and published its final document in the early hours of Sunday morning (20 November), more than 36 hours after discussions were scheduled to finish.

While a monumental agreement was delivered that will see developed nations contribute to a loss and damage funding facility, expected to commence next year, exhausted delegates expressed their disappointment at the weakening of key language in the final text that creates confusion and potential loopholes around “low emissions” energy to be used alongside renewables. Some analysts are worried that this could enable transitional sources like gas use to spiral or even enable fossil fuel development.

UN Secretary-General Antonio Guterres welcomed the formation of the Sharm el-Sheikh Implementation Plan, but noted that deals stuck at COP27 did not adequately introduce mechanisms to take the planet out of “the emergency room”.

This COP has taken an important step towards justice,” Guterres said. “I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period. Clearly, this will not be enough, but it is a much-needed political signal to rebuild broken trust.

“The voices of those on the frontlines of the climate crisis must be heard. The UN system will support this effort every step of the way. Justice should also mean several other things: finally making good on the long-delayed promise of $100 billion a year in climate finance for developing countries; clarity and a credible roadmap to double adaptation finance; changing the business models of multilateral development banks and international financial institutions.

“They must accept more risk and systematically leverage private finance for developing countries at reasonable costs. But let’s be clear. Our planet is still in the emergency room. We need to drastically reduce emissions now – and this is an issue this COP did not address.”

You can read reaction from green groups here.

So, what has been agreed at COP27 and will it do enough to keep 1.5C alive?

1.5C and ‘low emissions’

The final text largely keeps to what was officially stated in Glasgow at COP26, where a phase-out of fossil fuels was changed in the final hours to phase-down, significantly weakening the text.

The Sharm el-Sheikh Implementation Plan calls for nations to “accelerate the development, deployment and dissemination of technologies, and the adoption of policies, to transition towards low-emission energy systems, including by rapidly scaling up the deployment of clean power generation and energy efficiency measures, including accelerating efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies”.

While fossil fuels are mentioned for a second consecutive year in a final COP text, it has that familiar weakened language attached in the terms of “phasedown” and “inefficient”, essentially creating loopholes for potential new fossil fuel development. This is disappointing but perhaps unsurprising, given that there was a record number of fossil fuel lobbyists at COP27, dwarfing most national delegations in terms of numbers.

A new inclusion to the text this year was that of “low emissions” energy. Transitioning to “low-emissions” energy systems, rather than clean or renewable, could enable some countries to focus on new gas projects and perhaps even justify new fossil fuel development.

Reports suggest that Saudi Arabia and Russia were two of the bigger parties calling for this tweak in language. India, on the other hand, had proposed to strengthen what was agreed on fossil fuels in the Glasgow Climate Pact. More than 80 nations were believed to have backed India’s recommendation, but it was ultimately left off the cover statement.

Loss and damage

Delegates will be disappointed without the strength of the final text regarding decarbonisation and fossil fuels, but Egypt’s legacy may well be remembered for loss and damage.

Loss and damage has been arguably the focal point of COP27 and for all the talk of a lack of delivery on 1.5C, frameworks and discussions around Loss and Damage have been prominent throughout the 12 days. Read edie’s Loss and Damage explainer here.

This is something vulnerable countries have been calling for since the 1990s. It picked up traction at COP26, but nations ultimately pushed back and any formal agreement in Glasgow Climate Pact.

European Commission vice-president, Frans Timmermans agreed on a proposal from the G77 nations to establish a dedicated loss and damage fund on Friday, but other major economies were reluctant to come through and support.

The cover statement “welcomes the adoption of decisions on matters relating to funding arrangements responding to loss and damage”.

A committee will meet in March 2023 to decide on details of who should pay the money and how, but it will still need to be decided whether the likes of China and India take part in this funding initiative and whether they contribute (which many nations think they should) or receive (which those two nations believe they should). The committee will make recommendations on how to operationalise both the new funding arrangements and the fund at COP28 next year.

Last year, after blocking the creation of a fund and facility, wealthy nations agreed to host a series of talks concluding in 2024, so the fact that COP27 was able to sign off on the fund and push forward the date to 2023 is notable progress.

We have also seen the final text published for the Santiago Network from the UNFCCC, which was expanded at COP26 last year to act as a “technical assistance facility” for loss and damage. The final text, which was published midweek, notes that an advisory board has been established and will feature women, youth activists and Indigenous peoples. A secretariat location will now be set up.

Adaptation and mitigation

Considering how prominent adaptation and mitigation were at COP26, the subject seemed surprisingly low profile in Egypt during two weeks of negotiations. Despite the creation of a new Global Agenda on adaptation, established on Day Two at COP27, the cover text features very little new details on the subject.

The Glasgow Climate Pact saw parties commit to setting up work programmes that “urgently” scale up mitigation. At COP27, there was a clear developed and developing divide between nations regarding what this working programme looked like.

Eventually, the text settled on the agreement that any working programme would need to be “non-prescriptive, non-punitive, facilitative and respectful of national sovereignty”. As for the timeline of this working group, developing nations pushed for discussions that latest until 2030, while others wanted a two or one-year programme, eventually parties agreed on 2026.

The cover text “urges developed country parties to provide enhanced support, including through financial resources, technology transfer and capacity-building, to assist developing country Parties with respect to both mitigation and adaptation.”

Climate Finance

Nations are two years behind schedule on their pledges to deliver $100bn in annual climate finance to assist poorer nations. The $100bn target was set in 2009 and has never been met. The closest we have come was in 2020, when provisions peaked at $83bn.

Discussions took place at COP27 about adding to the list of “climate donors”, who would provide funding to developing nations to respond to the climate crisis through adaptation and mitigation methods and through loss and damage funding pools.

Developed nations are trying to expand the donor base to include “high-income” nations. This would cover Israel, South Korea, Saudi Arabia and Qatar amongst others. But the main addition to this list would be China, the world’s largest emitter.

The cover text does not mention any expansion to donor nations. Instead it “expresses serious concern” that the $100bn target continues to fall short and “urges developed country Parties to meet the goal”.

The text also highlights that around $4trn annually needs to be invested in renewable energy (no mention of low-emissions energy here) up to 2030 to reach net-zero  by 2050. It additionally states that “a global transformation to a low-carbon economy is expected to require investment of at least $4–6trn per year”.

Anything else?

There are a few firsts for UN cover texts. The role of “food” gets covered briefly and it is the first time that “nature-based solutions” find their way into the cover text. However, the nature-based solutions market is still in its infancy, lacks a clear definition and is severely underfunded, so it may be a few more COPs until this is fleshed out further. A new section on forests is also introduced.

There had been high hopes for strong wording on the relationship between nature and climate in the text. World leaders are due to meet in Montreal, Canada, next month, for what should be the last part of the UN’s 15th Biodiversity COP. This COP is being used to develop a ‘Paris-style’ treaty for nature, with an overarching vision of ending nature depletion and bringing the world into an era of widespread nature restoration.

“The treaty is now more than two years overdue due to Covid-19-related delays and international disagreements, with nature NGOs warning that urgent decision-making and implementation is needed due to the scale and pace of nature loss.

While delegates wanted to reference COP15 in the final text, it has not been included.

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