Policy Brief: COP27

Introduction

On 6-19 November, heads of state, ministers, NGOs, and negotiators convened in the Egyptian coastal city of Sharm el-Sheikh for the United Nations Framework Convention on Climate Change 27th Conference of the Parties (COP27).

COP27 builds on the outcomes of COP26 to deliver action on an array of issues critical to tackling the climate emergency from urgently reducing greenhouse gas emissions, building resilience, and adapting to the impacts of climate change, to delivering on the commitments to finance climate action in developing countries.

Faced with a growing energy crisis and a record greenhouse gas concentration, COP27 sought renewed solidarity between countries to deliver on the landmark Paris Agreement. Divisions emerged between developed and developing countries on the financial reparations between rich and poor nations, with some commentators ruling out payment to come from western taxpayers.

The COP26 text to phase out fossil fuel subsidies was upheld while campaigners, including the UK lead negotiator Alok Sharma, were disappointed that this did not progress to a firm commitment to phasing out fossil fuels especially, coal.

Key Takeaways

  • With regards to the worlds largest coal markets, there has been little movement since last year, China and India maintain a phasing ‘down rather than phasing ‘out which will apply to developed countries, China and India remain sceptical that 1.5°C is scientifically feasible.
  • Loss and damage are for many climate-vulnerable countries, the most important, and contested aspect of the finance negotiations. Rich countries have resisted discussion of loss and damage for 30 years, but the issues came to light in the wake of the Pakistan and Nigerian floods, and strong campaigning. Developing countries at COP27 call for ‘climate justice in the form of adaptation and loss and damage funds: after the first week, only five European countries Austria, Scotland, Belgium, Denmark and Germany have committed to addressing loss and damage.
  • China would eventually overtake the US in terms of historical emissions in a few years, but China is still considered a developing economy by the UN, but US and EU want China to be at the top of the list of new contributors for the loss and damage fund, despite the US failing to deliver climate finance and shoulder its responsibility as the worlds largest emitter, according to Chatham House.
  • Countries were suspected of watering down commitments and pledges made following last years COP26. The commitment made to double financing for adaptation from $20bn to $40bn per year by 2025 could relegate this to considering.”
  • The promise to provide developing countries with $100bn/y has reneged two years in a row, and funding agreements remain precarious. Given the additional liability of the loss and damage funding, the Global North continues to make overly ambitious promises while pointing to developing countries to do more.
  • By the end of talks, an agreement had been reached the President of the EU Van der Leyen announced a commitment from the EU to support the vulnerable nations on a ‘first contribution to reparation and damage. Details were scant but the wording suggests there will be a first payment and no ongoing assistance for this scheme.

Download the Sharm el-Sheikh Implementation Plan

Draft decisions prior to the conclusion of COP 207 took into account the following:

“Acknowledging the global challenges the international community is facing due to overlapping crises of food, energy, cascading risks, geopolitical, financial, debt and economic challenges, compounded and coupled by more frequent and intense climate impacts, all having negative impacts in particular on developing countries….

Also recalling Article 2, paragraph 2, of the Paris Agreement, that stipulates that the implementation of the Paris Agreement will reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.”

Our View

The WCA Evolving Coal Strategy embarks on a journey for clean coal that addresses many of these issues, including the use of coal as a complement to natural gas to produce ammonia, a key material for the production of urea and fertiliser to help alleviate the food supply crisis.

Geopolitics is an interesting concern, to date coal has not been affected by the impact of cartels, in the manner oil and gas have, yet coal takes a lesser role in energy security – the fact is singled out for phasing out.

Equity should apply to technological agnosticism and respect for national choice for developing countries to exploit their natural resources to benefit their economies and people, including fossil fuels, but such exploitation should be done cleanly and efficiently to minimise the impact on the environment and local communities, but for the betterment of these issues.

However, concern for the millions reliant on coal communities along the coal value chain. These coal communities are a test case for the programme Just Transition. Based on the latest IEA report ‘Coal in Net Zero Transitions: Strategies for rapid, secure and people-centred change,’ it is recognised that a large proportion of the worlds coal communities may not be located in regions where the energy transition growth will occur.

Where there remains a commitment to phase out coal power, ironically the wider commitment to phase down other fossils sought by India was rejected. This lacks consideration for coal-based economies. Rather than phasing in technologies to decarbonise coal assets, the COP27 discussions have followed the recommendations of the IEA to phase out coal at the end of their investment cycle. This demonstrates the unlevel playing field in the technology mindset imposed on developing countries by the developed Global North.

Many of the issues raised at COP27 are addressed as part of the WCAs five-year Evolving Coal Strategy, including the use of coal as a complement to natural gas to produce ammonia, a key material for the production of urea and fertiliser to help alleviate the food supply crisis.

We are intrigued by the way coal seems to garner less attention than oil and gas in delivering energy security, yet it has been a driving force in delivering energy security since energy events spiralled out of control at the start of the year. 

As always, we are still emphasising that its not about phasing-out” coal, its about phasing-in” abated technologies of which there are many. 

The COP27 discussions seem to have followed the recommendations of the IEA to phase out coal at the end of its investment cycle. This demonstrates the unlevel playing field when it comes to technology and mindset. It draws attention to the impositions which are brought on developing countries by the (developed) Global North.

We remain concerned about the millions of people reliant on coal communities along the coal value chain. These coal communities are a test case for a Just Transition. Based on the latest IEA report on ‘Coal in Net Zero Transitions: Strategies for rapid, secure and people-centred change,’ it is recognised that a large proportion of the worlds coal communities may not be located in regions where energy transition growth will occur. These communities dont just need a Just Transition, they need a Growth Transition.