· 7 min read
We took inspiration from the famous guides 'for dummies' to start this COP with a piece which is accessible to everyone, especially for our friends and colleagues outside the world of sustainability. Nothing about this article is for "dummies", but yes - you understand our mission: please share this with your friends. Sustainability requires joint action - that means from all of us!
The highly anticipated United Nations Climate Change Conference (COP 27) is opening its doors in Sharm El Sheikh, Egypt. Tens of thousands of delegates, heads of state and government from more than 150 countries, and many of the world's largest companies will have the difficult task of discussing and negotiating policies and actions to limit rising temperatures and counteract the damage caused by climate change.
On illuminem.com, we will keep you informed on the climate event of the year covering the most relevant news in our dedicated COP27 news portal, updating you regularly with a free COP newsletter and publishing the most insightful editorials written by the COP policy makers themselves.
Why is COP 27 important and what is to be expected?
In 2022, climate change is unfortunately an evident reality: record temperatures, wildfires, landslides, cloudbursts and droughts of an unprecedented scale are just the first consequences of the ongoing environmental crisis. Climate action is now an indispensable part of the solution to every other crisis of our time: the energy, food, migration and common security crises. COP27 is therefore the biggest opportunity of the year to move forward with intergovernmental commitments, public and private funding, and new policies to meet the challenges of our century.
Thus, on the 30th anniversary of the establishment of the United Nations Climate Convention (UNFCCC), emissions reductions, energy transition (moving away from fossil fuels to renewable energy), funding to developing countries for climate policies, and compensation for climate damages will all be urgently discussed in Sharm El-Sheikh.
At the technical level, the goal of this COP is thus to advance the implementation of the agreed-upon targets (not surprisingly, the slogan 'Together for Implementation' was chosen). This marks a stark difference with the Glasgow edition, jointly chaired by the UK and Italy, where the focus was first and foremost on what targets to set.
Who participates in COP?
COP 27 will be attended by many governments and world leaders. U.S. President Joe Biden, French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, and German Chancellor Olaf Scholz will be directly present at the proceedings. Russia and China, on the other hand, will send more technical delegations, as is perhaps to be expected in this era of geopolitical tensions - from Ukraine to Taiwan (see more).
Alongside governments, COPs are attended by the scientific community (which uses the event to showcase many of the latest climate change studies), many business leaders (seeking business, green visibility and/or greenwashing), non-governmental organizations, and think tanks.
Unfortunately, however, startups and activists will be essentially absent from this edition. Regrettably, the former are typically not invited to the table, with few exceptions. While the activist world, which had enlivened many events in previous editions, will be largely absent due to restrictions on public demonstrations imposed by the Egyptian government.
“Mitigation”
The first negotiating focus of this year’s COP is on "mitigation", that is, all policies that directly limit climate change.
Specifically, all participating countries are committed to limiting the global average temperature increase to +1.5 °C above pre-industrial levels (the upper limit to avoid a "climate catastrophe" as defined by the Paris Agreement). To achieve this common goal, each country has unilaterally formalized its own emission reduction targets, so-called "NDCs" ('nationally determined contributions'). The choice of unilateral rather than common targets (characteristic of the previous Kyoto Accord) permitted the Accord to be reached with the approval of countries traditionally more hostile to climate policies.
However, even if all national commitments (NDCs) are perfectly implemented, we would still experience a 10% increase in emissions in 2030, equivalent to a temperature rise of up to +2.5°C. Thus, the world would fall short of the target of 45% reductions needed to reach the maximum threshold of a 1.5°C temperature rise.
In addition, COP27 will be crucial to check the progress of the plurilateral mitigation agreements signed a year ago at COP26 (and hailed as the best wins of the previous edition). These agreements, namely on the abandonment of fossil fuels, and the reduction of methane emissions and deforestation, were hailed as the real success of the last COP by the press.
“Adaptation”
The second focus of the negotiations is "adaptation," understood as policies to adapt to (and not counteract) future climate conditions.
Historically, this issue has received less attention and funding than mitigation. It was only at the previous COP that a major financial agreement was reached, promising a doubling of the resources provided by developed countries to fund adaptation policies. Furthermore, there is still a lack of clear definitions of the goals of these policies ("global goal on adaptation" or GGA) - which would serve as a parallel aim to the 1.5°C goal at the heart of the mitigation agreement.
Funding for the Developing World
The third negotiating focus, already implied in the work on the first two, concerns financing for developing countries' climate policies.
The goal is twofold. On the one hand, it strives to enable each country to develop economically without endangering common climate stability. On the other hand, it aims to compensate for the costs that vulnerable countries suffer as a direct result of climate change, which is caused mainly by the growth of emissions from BRICS countries and the West. This last issue, called "loss and damage" in technical jargon, refers to impacts that cannot be avoided by mitigation or adaptation actions.
Undoubtedly, this will be the negotiating focus where the biggest clash is expected between developing countries (recipients of such contributions) and developed countries (donors). In anticipation of the COP, the International Monetary Fund estimated a financing need of $2.5 trillion annually through 2030 to meet the goals of the Paris Agreement and the UN Sustainable Development Goals (SDGs). This figure may compound the frustrations of many governments over the failure of developed countries to meet previous financing agreements, such as the promised $100 billion annual "climate finance" expected in the years 2020-2025.
The Role of Carbon Markets
The fourth major negotiating focus is on carbon markets, which are financial markets where certificates corresponding to the reduction of pollutant emissions are traded.
Each certificate in the market typically corresponds to one ton of carbon dioxide (CO2) avoided or sequestered as a result of a green investment, such as building a solar farm to replace fossil fuels or protecting a forest that would otherwise have been cut down.
At the previous COP26, an agreement was reached to create an international carbon market, where governments can sell/buy carbon credits in order to meet their respective national climate targets (the NDCs mentioned above). For insiders, this is the work on Article 6 of the Paris Agreement.
One year later, however, only 20 percent of governments have a plan on how the international carbon market can help meet their NDCs, according to a report by the leading carbon procurement firm Abatable. COP27 can therefore be an opportunity to get an international carbon market off the ground by aligning important public and private interests.
What role will technology play at COP27?
Finally, we couldn't help but wonder what role technology will play in the climate event of the year?
While we pointed out that startups will unfortunately again be missing at the negotiating table, Big Tech companies will be more than active among stands and national pavilions. Microsoft and IBM are even major sponsors of the conference.
As was the case a year ago with the launch of the First Movers Coalition, some major bilateral agreements and financial announcements are expected to invigorate the Tech industry toward increasingly green goals.
Stay up-to-date on the climate event of the year on the dedicated COP27 portal on illuminem.com and with our free newsletter. And perhaps most importantly, we invite everyone to feel part of the common challenge against climate change - starting right now with “small big” actions which can make a huge difference (from taking public transportation to reducing our power consumption).
Explore more climate insights and data-driven perspectives by comparing the sustainability performance of all companies on Data Hub™.
