Source: https://siwi.org/latest/join-us-at-cop27/
The COP27 Climate change conference opened with the shared sense of urgency, as many of the speakers highlighted the negative climate impacts around the world that have manifested over the past year. The COP27 had its main focus on ensuring the Paris agreement commitments are met and implemented. After COP26 the aim to limit global warming to 1.5 degrees compared to pre-industrial levels was “kept alive, with a weak pulse” and it seems that with the latest climate science news the outlook is not improving. The UNEP published their 2022 emissions gap report and according to it, existing policies will lead to 2.8 degrees rise. In the best-case scenario if nations implement their pledges, net-zero goals and all other policies that would lead to 1.8 degrees rise, but that scenario is currently deemed by the UN as “not credible”. The latest climate science points to the fact that even though there are actions towards global greenhouse gas emissions going down, efforts are insufficient.
In the opening statement of the UN Climate Change Executive Secretary, governments were asked to address three main topics - the implementation of the Paris agreement with concrete actions, progressing in the workstreams of mitigation, adaptation, finance and loss and damage and stepping up the financing to tackle the impacts of climate change. Another critical topic is around delivering transparency and accountability throughout the UN Climate change process. The vision of the COP27 Presidency is to address human needs such as water security, food security, health, and energy security.
On Tuesday the COP27 conference saw the launch of the Adaptation Agenda to build climate resilience for 4 billion people around the world by 2030. The focus is on around 30 outcomes, which address the so called “adaptation gap” that is concerning around four billion people who live in the most vulnerable communities around the world. The agenda puts human needs at the heart of actions with food security, agriculture, water and nature, forestry, human settlements, real estate, oceans and cities as the main themes amongst others.
The topics of loss and damage financing were also in the spotlight - that would be the responsibility that industrialized nations have towards the developing countries, since they are mostly responsible for the already released emissions warming up the Earth. This year for the first-time loss and damage funding was formally included in the agenda.
Climate change adaptation in Africa was also a hot topic with the need to invest in adaptation measures to address the already visible consequences of climate change in the most vulnerable parts of the world. Enhancing the resilience of the communities in the developing countries and aligning the financial flows with these goals is central to the climate talks. African nations called for “climate justice” as culpability and capacity to tackle climate change issues between developed and developing countries greatly vary.
Wednesday was Finance day at the COP27. The key highlight from the day is not new – investments worth trillions of dollars are needed to achieve the actions required to address climate change and to implement the objectives of the Paris Agreement. A variety of stakeholders discussed finance matters, from closed door negotiations of delegates and ministers to activists and bankers. The bottom line - the financial push and flows should come from all the sectors – public and private, debt and equity, commercial and philanthropy. Moreover, a report released at the summit during the Finance day showed that emissions from fossil fuels may be 3 times higher than what some industries claim. Finance is the biggest driver of actions everywhere and discussions around big companies still investing in controversial actions that may lead to deforestation were raised by activists.
Thursday was Science and future generations day at the COP27 summit. The day saw discussions around technologies that would support the transition to a low-carbon economy and also the best valuable science focused on reports that came out during the year from the IPCC, UNEP and other institutions and emphasized the importance of science to solve the climate issues. An example would be the report on the Ten insights in Climate science 2022 featuring things like the myth of endless adaptation, regions at risk, new threats with health interactions, climate mobility, sustainable land use, loss and damage and other topics stemming from climate research during the past year. The report shows the complexity of climate matters and the interrelation with other risks such as conflicts, pandemics and other development challenges. Ahead of the speech that Biden would have on Friday’s COP27 agenda, the US announced stricter rules for major Federal contractors to publicly disclose emissions, climate related financial risks and science-based reduction targets.
Friday was Decarbonization day and saw the launch of a plan to accelerate decarbonization in five key sectors – power, road transportation, steel, hydrogen and agriculture. The plan included 25 new collaborative actions that should be implemented before the next COP. Under the Breakthrough agenda countries set out sector-specific actions to decarbonize power, transport and steel, increase low-emission hydrogen production and make the shift to sustainable agriculture. Some of the crucial actions of the initiative include deployment of infrastructure projects like net-zero industrial plants, hydrogen valleys and power grid projects, setting a common target for the phase out of polluting cars and vehicles, strengthening financial and technological assistance for developing countries – all measures to make low-carbon technologies more affordable, accessible, and attractive.
On Friday President Biden addressed the parties at COP27. Some of the highlights of the speech included the United States continuous commitments towards tackling the climate challenge and reassurance the US will meet their emissions targets by 2030 and provide more funds for adaptation in Africa. The president highlighted that cutting methane by 30% by 2030 is one of the best chances to meet the 1.5 C target and that the US would tighten its methane emission reduction plan.
The first week commenced with Adaptation and Agriculture Day that was held on Saturday. One of the highlights was the report on Sustainable Food Cold Chains prepared by the UNEP and FAO. The report addressed sensitive issues such as reducing food loss, improving food security, reducing poverty and building resilience. Agriculture and the food sector represent around one third of the global greenhouse gas emissions from production to consumption. Agriculture is an important part of tackling the climate crisis and could also be a solution to it, by sequestering carbon in the soil and plants. The Food and Agriculture for Sustainable Transformation initiative was launched during the COP27, aiming to transform agriculture and food systems by 2030 and promote adaptation and resilience.
In a nutshell the critical themes during the first week of the summit were – keeping the 1.5 C target alive by implementing the Paris agreement, climate change adaptation measures in the developing countries as well as the climate finance flows that need to align with the targets to make them achievable. Science and new technologies are vital for the transition to happen and would provide the means to achieve the targets. Steep decarbonization is needed through low-carbon technologies in the biggest emitting sectors. Meanwhile the negotiations continued, mainly in closed sessions where the countries would be smoothing out their differences and discussing the sensitive questions of adaptation, finance, and emission reduction commitments.
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COP27 wrap up – highlights and implications for industries
The second week started with Water Day at the COP27. The Action on Water Adaptation and Resilience Initiative was launched and it focuses on three main points – decrease of water loss and improving water supplies worldwide, supporting and implementing cooperative water related adaptation actions and promoting cooperation between water and climate action. Another big announcement came from the maritime industry where ten organizations signed a joint statement on Green Hydrogen and Green Shipping, committing to the adoption of green hydrogen-based fuels in the shipping to drive decarbonization of the sector by 2050. The signatories called on international authorities and national governments to support the actions and specifically asked the International Maritime Organization and member states to commit to a 100 percent emissions reduction for the maritime sector by 2050 and 5 percent zero-emission fuels in shipping by 2030.
Tuesday saw Energy Day at the summit. The discussions were around renewable energy technologies and financing the energy transition. Green hydrogen was in the spotlight as an analysis from the Africa Green Hydrogen Alliance focused on the benefits of hydrogen for six African states, stipulating it may increase GDP by 12% for these countries. As industries decarbonize the demand for green hydrogen will also grow rapidly, prompting a need for investments estimated between 600-900 billion dollars until 2050. The International Renewable Energy Agency (IRENA) presented insights from its report on renewable energy targets in the Nationally Determined contributions (NDCs). The Egyptian presidency launched the Africa Just and Affordable Energy Transition Initiative aiming to facilitate affordable energy in Africa, provide access to clean fuels and technologies and increase the share of renewable electricity generation by 25% by 2027. Moreover, a five-year work programme to promote climate technology solutions in the developing countries was launched by senior officials the UNEP UN Environment Program) and the UN Framework Convention on Climate Change (UNFCCC).
Wednesday was Biodiversity Day and focused on concrete measures to protect and restore the planet’s biodiversity. The loss of biodiversity is already affecting regional and global changes in the climate as natural ecosystems help sequestering carbon and act as “carbon sinks”. Moreover, the effects on biodiversity are quite severe with animal species forced to migrate and plants struggling to adapt to the temperature changes. Just two weeks after COP27 the UN Biodiversity Conference will take place in Montreal, Canada. Calls for reaching a “Paris agreement for nature” were heard at the summit and a series of initiatives were launched to halt and reverse the loss of nature and support restoration including Enhancing Nature-based Solutions for Climate Transformation (ENACT) and the High-quality blue carbon principles and guidance that will help investments in projects that ensure positive outcomes for nature. At the same time, the Aviation industry leaders launched a guide to accelerate the use of sustainable fuel in aviation and called for a usage of 30% of SAF by 2030.
Thursday was Solutions Day at the COP27 and a variety of solutions for the climate change issues were discussed. Initiatives focused on transportation were launched including the Low carbon Transport for urban sustainability (LOTUS), the Launch of the collective for clean transport finance and also the Annual progress report on Green shipping Corridors. Moreover, the Urban settlements report that focuses on urban infrastructure, urban nature and urban settlements was launched. The first ministerial meeting on urbanization and climate change was held and broader discussions took place on real estate and urban infrastructure, retrofitting infrastructure, circularity in the area and financing the transition to sustainable urban settlements. The U.N. climate agency published the first draft of the attempt for a final agreement from the summit, which was more than 20 pages long and still contained a lot of uncertain points and unresolved issues. Negotiations dragged in an overtime with no clear indication of an end date.
On Friday negotiations continued aimed at reaching a deal and the main focus was on the “loss and damage” funding. The EU agreed to set up a special fund covering loss and damage in the developing countries, but funding should come from a “broad donor base”. Negotiations dragged through Sunday when finally the parties of the COP27 reached an agreement and the Sharm el-Sheikh implementation plan was released.
What are the key takeaways, highlights and agreements
The urgency of the climate crisis is imminent, and the 1.5 C degree target is not achievable with current actions in place. Immediate and concrete actions and elevated ambition is needed to save our planet for future generations. Governments, businesses, industries, and communities must act now, commit to net-zero and invest in actions to achieve it. Climate change mitigation, adaptation, finance and addressing loss and damage are the main themes where plans need to be set in action to tackle the crisis. Funding for adaptation and loss and damage and financing the transition were the most sensitive topics, leading to disagreements between developing and developed countries.
There are a few key take aways from the COP27 that deserve attention. The first is the breakthrough decision to create a loss and damage fund for the most vulnerable countries, which was the thorniest issue at the summit and has been a topic of heated discussion for years. It brought in the spotlight the topic of “climate justice” and the responsibility that developed countries have towards the developing. The second key highlight was achieving significant progress on adaptation topics and seeing the parties united and pledging additional finance of 230 million dollars to the adaptation fund. The final text of the agreement also included an urge towards the financial system’s priorities and practices– engaging governments, central, commercial banks and investors in the transformation to a low-carbon economy as it is expected to cost up to 6 trillion dollars on an annual basis.
Unfortunately, there were also quite many of topics that did not live up to the expectations – like the wording on phasing out fossil fuels, where no progress was made and the final decision failed to call for the winding down of fossil fuels. Another disappointment was keeping the 1.5 C target alive, albeit barely. There were high expectations for stronger pledges to decrease greenhouse gas emissions, however the high ambitions did not make it to the final agreement text. The 1.5 degree target might be yet physically achievable, but it’s politically not possible with the current commitments and obligations to mitigate emissions by 2030.
What are the implications and overall climate change actions for industries and governments?
In the Maritime industry the expectation is to be net-zero by 2050 and to have 5% of green fuels by 2030
In Forestry and Agriculture, the ambition is to halt forest loss and land degradation by 2030 and to ensure food security and resilience by transforming the industries into sustainable ones, that may also contribute to climate change mitigation and sequester carbon in plants and soil.
In the Energy industry the expectation is to exit coal/gas financing and scale up investment in clean energy portfolios, major utilities to commit to net-zero to drive renewable deployment and fossil fuel phase out. An example is targeting methane emissions and the greening of the electricity grid through new renewable capacities of wind, solar and hydro power.
For Finance tackling climate change would mean that trillions of dollars’ worth of investments are needed to finance the transition and the financial institutions will have to support, participate and drive the process.
Science and education are pivotal for combatting climate change and are driving the transition process with new technologies and research.
For Transportation zero-emission vehicles are the focus and sustainable transportation was discussed further. The ambition is to reach net-zero emissions from air transport by 2050 and take into use sustainable aviation fuel. The transition to zero-emission vehicles will continue at a faster pace as stakeholders confirmed the ambition to achieve net-zero road transportation by 2050 in line with the Paris agreement.
For the Steel industry the expectation is near-zero emission steel to be the preferred choice in global markets, with production established and growing in regions over the next years.
In Construction and Real estate this would mean focusing on sustainable urban infrastructure and developing plans to transition to net-zero urban areas in the future.
How may we help?
It’s visible from the results of the talks that continuous efforts to curb temperature rise and enhance resilience and adaptation actions are urgently needed. This will affect many industries and systems – food and agriculture, water and nature, human settlements, oceans and marine, transportation and infrastructure, real estate, oil and gas, education, steel, power, and more. More than ever, there is now a need to ensure we measure and track in a structured manner - greenhouse gas emissions, water usage, waste, and other environmental impacts. We need data to measure and report on the effects, set targets, and put the proper actions in place. Finance and investing wisely in projects leading to much-needed mitigation and adaptation is crucial.
msg global can help industries and businesses to achieve that – data gathering, calculating and measuring, reporting, implementing, and tracking targets, as well as simulating changes in business strategy and investment business cases. Through our robust software solutions, we digitalize data and provide analytics and traceability that will help you in your sustainability journey. You can reach out to us for more information.
