The conclusion of the latest United Nations (UN) Climate Change Conference, widely known as COP27, drew mixed reviews but there were several reasons for optimism despite the underwhelming outcome being labelled by some as inadequate and another missed opportunity. Perhaps the most significant development was the announcement by, Simon Stiell, recently appointed UN climate chief, of plans to shake-up the annual summit to ensure a greater focus on transparency and delivering results going forward.
Speaking from the Egyptian resort of Sharm el-Sheikh just hours after the conference concluded, Stiell stated his intention to conduct a review of the COP process to make it as effective as possible.
Given the level of coverage and hyperbole which surrounded COP26, over 12 months ago in Glasgow, it was always going to be a tall task for this year’s summit to capture the imagination in the same manner.
There was plenty of criticism for COP27 before it had even begun, with the location and choice of sponsors seen by some as not befitting of an event touted as leading the global fight on climate change.
Furthermore, the macroeconomic and geopolitical backdrop has changed dramatically in the last 12 months, with inflation running at its highest level in a generation and the outbreak of war in Ukraine. Although higher oil and gas prices should discourage consumption and benefit alternative sources of energy, the associated higher cost of living for households, has meant a greater focus on near-term matters at the potential expense of longer-term ones, such as climate change.
International cooperation is essential for effectively tackling climate change and the last year has seen an increase in geopolitical tensions and revealed greater divides between some of the world’s leading powers, as was demonstrated by the global response to Russia’s invasion of Ukraine. However, there has been some positive developments in this regard in recent weeks with the meeting of US president Joe Biden and Chinese leader Xi Jinping on the sidelines of the G20 summit in Bali seen as a constructive step.
Not enough
Like its predecessor, the outcome of COP27 was seen by some key participants as not going far enough in tackling the issues at hand. In a sign of the fraught tension pervading discussions, negotiations over-ran their Friday deadline and took until Sunday morning to complete. That said, the agreement from almost 200 countries to create a fund to cover the “loss and damage” caused by climate change on vulnerable nations was widely cited as a ground-breaking deal. It may have taken 30 years since the creation of the treaty for international cooperation on climate change which underpins the COP meetings, but finally it appears that rich countries are starting to realise their responsibilities to offer financial support to poorer ones, in order to repair damage caused by a warming world.
As a further example of how individual COP outcomes should be placed in the wider context, the first indications of a willingness to support those worse off and more exposed to climate change were seen in Glasgow last year. Scotland’s first minister Nicola Sturgeon promised to commit £2m to the cause, a seemingly insignificant sum given the associated costs earmarked to cover – Pakistan’s damage and financial loss from a heavier than usual monsoon earlier this year has been estimated in excess of £30bn. Nonetheless, the commitment appears to have set the wheels in motion and led the breakthrough in Egypt. Sturgeon pledged an additional £5m at COP27.
As welcome as this significant step forward was, any sense of jubilation was kept firmly in check by the inability of negotiators to reach a deal on larger reductions in greenhouse gas emissions and ending the use of fossil fuels. Staunch resistance from countries including Saudi Arabia and Russia proved to be an insurmountable stumbling block. “We should have done much more. Our citizens expect us to lead,” said Frans Timmermans, European Union (EU) climate chief who called the outcome “not enough of a step forward for people and the planet.”
Almost seven years have now passed since the historic Paris Agreement to keep global warming well below 2C, and ideally 1.5C, compared to pre-industrial times, and many involved in the latest round of talks spoke of their dismay at the inability to reach an agreement on stepping up cuts to emissions. “Governments must now put words into actions, in particular by implementing policies that make effective progress on the mitigation pledges made,” said Christine Lagarde in 2015, then Managing Director of the International Monetary Fund. That this quote could have been used after any of the COPs in the past seven years demonstrates the lack of tangible progress made since the Paris Agreement.
However, all is not lost. It is true that there has been a growing sense that for all the upbeat rhetoric and positivity surrounding COP events, tangible progress often leaves much to be desired, a feeling encapsulated by a panel discussion at the start of COP27 titled “When will leaders lead?” But the decision to review the process and look to increase effectiveness is a welcome one and bodes well for future iterations. For the requisite progress to be made in delivering effective action on climate change cooperation is key, with investments from both private and public sectors essential.
Any disappointments and feelings of inadequate actions following the conclusion of COPs should be placed in the appropriate context. The scale of the challenge in tackling climate change is enormous and will take not only globally concerted efforts, but many years to achieve. Therefore, it is unreasonable to expect ground-breaking strides forward at every annual event. The Paris Agreement was such a huge step in the right direction that expectations for subsequent summits were likely too high. Progress is being made and the long-term view should not be lost among over-hyped expectations and disappointments leading into and out of each COP.
Author
Gemma Woodward
Executive Director & Head of Responsible InvestmentI lead the responsible investment team at Quilter Cheviot working to ensure that we act as stewards of our clients’ assets in order to protect and enhance their long-term returns. I am a member of the Investment Oversight Committee within Quilter Cheviot and I am a member of a number of industry groups focused on responsible and sustainable investment.
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