Was there any significant success?

Many participants dubbed COP27 as a missed opportunity and potentially a step back, due to the fact that it did not progress commitments or show evidence of significant action by countries to further draw down global emissions, jeopardizing progress in the key objective of limiting the global temperature rise to below 1.5 degrees Celsius. 

However, according to the World Economic Forum, “as the ‘Africa COP’, the issues of critical importance to developing economies, including climate adaptation and loss and damage were brought to the fore, rebalancing the negotiations and reinstating trust between parties”. ​​A breakthrough agreement to provide loss and damage funding for vulnerable countries severely affected by climate disasters was seen as a success, although details of the fund still need to be fleshed out.

The “Loss and Damage” Fund for vulnerable countries

COP27 closed with a breakthrough agreement to provide “loss and damage” funding for vulnerable countries hit hard by climate disasters.

As stated by Simon Stiell, United Nations Climate Change Executive Secretary, “this outcome moves us forward”. According to Stiell, “we have determined a way forward on a decades-long conversation on funding for loss and damage, deliberating over how we address the impacts on communities whose lives and livelihoods have been ruined by the very worst impacts of climate change”.

Governments also agreed to establish a transitional committee to make recommendations on how to operationalize both the new funding arrangements and the fund at COP28 next year; the first meeting of the transitional committee is expected to take place before the end of March 2023.

Furthermore, parties also agreed on the institutional arrangements to operationalize the Santiago Network for Loss and Damage, to catalyze technical assistance to developing countries that are particularly vulnerable to the adverse effects of climate change.

COP27 saw significant progress on adaptation, with governments agreeing on the way to move forward on the Global Goal on Adaptation, which will conclude at COP28 and inform the first Global Stocktake, improving resilience amongst the most vulnerable; new pledges, totaling more than USD $230 million, were made to the Adaptation Fund at COP27.

These pledges will help many more vulnerable communities adapt to climate change through concrete adaptation solutions. COP27 President Sameh Shoukry announced the Sharm el-Sheikh Adaptation Agenda, enhancing resilience for people living in the most climate-vulnerable communities by 2030. Also, the United Nations Climate Change’s Standing Committee on Finance was requested to prepare a report on doubling adaptation finance for consideration at COP28 next year.

Finally, the cover decision, known as the Sharm el-Sheikh Implementation Plan, highlights that a global transformation to a low-carbon economy is expected to require investments of at least USD $4-6 trillion a year. Delivering such funding will require a swift and comprehensive transformation of the financial system and its structures and processes, engaging governments, central banks, commercial banks, institutional investors and other financial actors.

Other main achievements

Besides the proposal of a “Loss and Damage” Fund for vulnerable countries, the following are some of the main achievements reached during COP27:

  • It was encouraging to witness China and the United States reopen their conversation on tackling climate change, and to see adaptation dialogues begin on enhancing resilience for 4 billion people living in the most climate-vulnerable communities by 2030;
  • The largely untapped innovative finance model (enabled by COP negotiations, that monetises avoided or reduced emissions through carbon markets) was tapped into by African nations, who announced a carbon market partnership;
  • At the G20, which ran alongside COP27, the Indonesia Just Energy Transition Partnership was launched to help finance the energy transition;
  • During the Beyond COP27 Leaders On The Road Ahead closing panel, James Mnyupe, Presidential Economic Advisor to the Office of the President of Namibia, said he was pleased to have “mobilised about UDS $63 million in grant funding to get various projects underway in Namibia, that will help us with mobilising concessionary financing”;
  • Mnyupe also added “and we also mobilised about €500 million of a framework loan, that will be available to us in very concessionary terms as well”.

During COP27, the private sector also had a major role; the following are some of the highlights:

  • The private sector had a major role, particularly across the areas of climate ambition, low-carbon technology and climate adaptation. It was recognised that the adaptation market could be worth USD $2 trillion per year by 2026, with the developing world standing to benefit from much of this;
  • Thousands of leaders at COP27 committed to working towards 1.5 degrees Celsius;
  • The First Movers Coalition’s expansion was announced, growing from 25 members when it was launched at COP26 to 65 members, which includes companies and governments. Those First Movers sent a USD $12 billion market signal to pull forward critical, low-carbon technologies of the future to decarbonise the cement and concrete industry;
  • More than 100 CEOs and senior executives of large multinational corporations, all members of the Alliance of CEO Climate Leaders, signed an open letter to leaders at COP27 committing to work side-by-side with governments to deliver bold climate action and encourage all businesses to accelerate the Net-Zero transition by setting science-based targets, disclosing emissions and catalysing decarbonisation and partnerships across global value chains;
  • Major agricultural trading and processing companies launched the Agriculture Sector Roadmap, which moves the industry towards science-based, transparent and traceable actions to avert and reverse deforestation;
  • Finally, 26 countries signed a global MOU that 100% of new truck and bus sales will be zero emissions by 2040.

COP27 and future generations

One group of people certainly getting their voice heard at COP27 were the future generations, whose very planet that they inherit from today’s generation is at stake.

Pato Kelesitse, Global Shaper at Gaborone Hub and Founder of Sustain 267, announced that “when we use our money as young people, we need to know that whatever we’re giving it to is what we’re voting for. Whatever we’re giving our money to is what we’re demanding. So when businesses come to COP27 they need to know that if you’re not going to get us closer to 1.5, you are not going to be getting our money”.

Moving forward towards COP28

For those companies who have not yet fully embraced ambitious climate action, the message from youth, civil society and business at the forefront of this agenda at COP27 was clear: the private sector has a unique role to play to provide the capital and solutions to meet our global climate goals.

Furthermore, with the results of the Global Stocktake Process published at COP28 and the United Nations setting out its recommendations for robust climate action from non-state actors, 2023 will be about countries and companies showing how they are meeting their climate commitments, while pressure is still on to ramp up ambition.

Moreover, the Annual Meeting in Davos, taking place on 16-20 January 2023 and titled ‘Cooperating in a fragmented world’, will be a key milestone to build on the progress made at COP27 and to kick off the Road to COP28.

About the Author: Felipe Gaitán Michelsen