COP27 preview: the challenges of implementation, and what we can expect

In addition to the usual challenges, the 2022 United Nations Climate Change Conference (COP27), which runs from 6-18 November 2022 in Sharm El Sheikh, Egypt, will face new ones. Since COP26 in Glasgow at the end of 2021, we’ve experienced significant changes in the geo-political and economic environment – war in Europe and its consequential impact on energy markets and trade, increasing tensions between China and the USA – which will impact international negotiations, and conceivably provide an excuse for backtracking on climate commitments.

If that excuse is seized upon to reduce commitments, the goal of keeping the world on track to limiting the average increase in temperatures to 1.5 degrees as required under the Paris Agreement, already described by the COP26 President as having a weak pulse, will be dead. The UN Climate Change’s 2022 NDC synthesis report reiterated the seriousness of the challenge. Even if all Nationally Determined Contributions (NDCs) are fully implemented, it still likely to result in 2.5-degree Celsius increase in average temperature by the end of the century.

Faced with these multiple challenges, the Egyptian COP presidency has made clear that COP27 will be about implementation: action to try and keep the 1.5-degree goal within reach, and scaling up that action in the short term. This will be inflected by the thematic program for COP27 which focuses on issues of significant concern to Africa, including food security, water and nature-based solutions.

There is a clear expectation on countries to come to Egypt with details of legislation, policies and programs to implement NDCs, but also how they will co-operate and provide support for implementation for the four areas of focus: mitigation, adaptation, finance and loss and damage.

Accelerating mitigation

A key to mitigation is scaling up efforts to cut and remove emissions faster, and across all economic sectors. The Glasgow Climate Pact requested countries to revisit and strengthen their 2030 reduction plans by updating their NDCs to align with the goals of the Paris Agreement. Some countries, including Australia, have done this, but not enough. Climate Tracker reports that only 21 of 193 countries have updated their NDC, and only Australia adopting a stronger target.

Efforts will also focus on the implementation of COP26 work program for accelerating ambition in what the Pact described as the critical decade for action. Negotiations on the detail of how that program will operate are continuing. This will include finalising the architecture of international carbon markets under Art 6 of the Paris Agreement, and finalisation of technical rules and governance structures to support increased ambition. It is expected that Australia’s priorities during the negotiations will be on those areas that most urgently help parties increase ambition including ensuring robust institutional arrangements, and reporting and review processes.

Faster, bigger, stronger adaptation to climate change

COP26 outlined a two-year work program to scale up initiatives to address vulnerability and resilience as part of a scaling-up of adaptation initiatives. Even though we are only one year into that program, the Egyptian presidency has made adaptation a key area of focus given the particular vulnerability of Africa to climate change impacts. Accordingly, COP27 will likely involve a stocktake of progress against that two-year work program but with an additional emphasis on measures to significantly increase adaptation finance.

Although developed countries agreed to double finance for adaptation from 2019 levels by 2025, or to about US$40bn, this is still seen as significantly less what is believed necessary. Finance for adaptation has always been a poor cousin to mitigation finance which is more attractive for both public and private finance sources. Efforts will likely be made to close this “adaptation gap”.

Climate finance: setting goals, achieving goals

The issue of climate finance remains highly political and contentious. In 2009, developed countries promised to mobilise US$100bn a year by 2020 to support climate action by developing countries. That promise was not met. A Climate Finance Delivery Plan was developed ahead of COP26 with a view to ensuring that the target was met by 2023, but a recent progress report has identified numerous challenges to achieving this new target date.

There is also the contentious issue of setting the next climate finance goal, due to take effect from 2025.

At COP27, discussions are expected to focus on a fundamental issue of what constitutes climate finance. This is important to provide clarity about how any goal is calculated and ultimately performance measured. For example, foreign aid has often been badged as climate finance, as have loans which have the effect of increasing the debt burden of developing countries. Efforts are likely to be made at COP27 to reduce the emphasis on aid and loans, and instead focus on non-repayable grants or debt reduction in exchange for commitments to climate initiatives as elements of climate finance.

Loss and damage

One of the significant but far from resolved issues at COP26 concerned the need for finance to address loss and damage suffered by those communities without the resources to adapt to the impacts from climate change. Developing countries proposed a new finance facility dedicated to loss and damage but instead the Glasgow Dialogue on Loss and Damage was agreed to be established. This proposed a framework for discussing possible funding models through to 2024. The first session of the dialogue took place in June 2022 with the critical fissure being whether a new facility dedicated to loss and damage finance should be established, or if existing channels such as the Green Climate Fund can be repurposed to meet the same objective.

Although funding arrangements for loss and damage are not currently on the COP27 agenda, many developing countries are urging the Egyptian presidency to add it to break the current impasse. Whether it is added to the agenda will depend on a consensus emerging between developed and developing countries. Loss and damage as an issue therefore has the potential to make or break COP27 and will attract considerable attention.

Australia’s perspective and the regional challenges

For Australia, COP27 is likely to be a very different and more positive experience than that at COP26 where Australia was viewed as a climate action laggard and singled out for criticism. The release of Australia’s enhanced NDC which committed it to an increased interim 2030 target of 43%, now enshrined in the Climate Change Act 2022, its more recent commitment to the Global Methane Pledge and increased support for Pacific Island states will likely see Australia as a contributor to global action.

Australia will likely have a genuine interest in seeing the issue of loss and damage resolved given the particular susceptibility of Pacific Island states to climate change impacts and increasing regional security concerns.