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COP27 or COP Out27?

As countries gather in Egypt, a major theme will be whether the developed world will assist poorer countries in climate adaptation.

Published on November 3, 2022

This year’s United Nations Conference on Climate Change, or COP27, will begin on November 7, under the patronage of the Egyptian government. It takes place amid a dawning reality that global warming is progressing at a much more accelerated pace than previously thought. Unless concerted mitigation efforts are undertaken, the world will be at the mercy of cataclysmic extreme weather events and the destruction of the world’s ecosystems. COP27’s tagline, “Together for Implementation,” is being billed as an African COP in the sense of its location and the expectation that it will grant African countries and the issues important to them a chance to take center stage during the negotiations.

However, this COP will occur in the wake of the world-changing Covid-19 pandemic, geopolitical upheaval, soaring food prices, global inflation, supply chain disruptions, increasingly hostile U.S.-Chinese relations, and a severe energy crisis rupturing the global economy. These foreboding issues constitute the backdrop to purely climate-related concerns as policymakers grapple with the interconnectedness of climate change, energy security, and geopolitics to forge a common global climate strategy.

COP27 is critically important because the world is still lagging in limiting global temperature increases to levels that would prevent the crippling cascade of severe climatic tipping points. For instance, the Intergovernmental Panel on Climate Change cautioned that global greenhouse gas emissions must begin to decline in all of their scenarios immediately. And, they issued a stark warning that without “immediate and deep” emissions reductions across all sectors, it would be nearly impossible to cap an average global temperature rise at 1.5°C above preindustrial levels. It is estimated that the current nationally determined contributions would still collectively lead to a global average temperature increase between 2.4°C and 2.7°C by the end of this century.

Despite that pessimistic assessment, the International Energy Agency declared that its projections illustrate that global carbon emissions from energy would likely peak in 2025 due to significantly increased governmental spending on sustainable fuels due to Russia’s invasion of Ukraine. Skyrocketing natural gas and oil prices, while being a primary driver behind global inflationary pressure, appear to have a silver lining.

Russia’s bellicosity and the resultant upheaval in global energy markets have accelerated the clean energy transition. Countries are pivoting from viewing renewable energy primarily as an environmental issue to a more security-oriented view that deploys global decarbonization as a lever to promote energy independence and reduce the power of petrostates in hydrocarbon weaponization. While the security dimension will likely not be a major stated theme during the negotiations, it will undoubtedly be on the minds of many of the delegates in attendance.

Alongside the external security angle of global decarbonization, climate change can exacerbate sociopolitical issues, inducing economic and political instability, precipitating mass migration and terrorism within climate-vulnerable countries, such as the climate-induced challenges that were a significant driver of the Arab Spring uprisings of 2011.

African and Middle Eastern countries have a host of concerns that they hope COP27 will address adequately. In a sense, African governments, located in perhaps the continent most vulnerable to climate change, want to feel their voices are empowered. African and Middle Eastern delegates will put forward the overarching concern of historical responsibility in its three intertwined articulations: climate finance, loss and damage compensation, and energy sector development.

Developing countries insist that the West should comprehensively recognize its historical role in causing the stark rise in global temperatures and, as a result, pledge more significant carbon emissions reductions. Some studies indicate that the West is responsible for approximately 92 percent of excess global carbon emissions since the Industrial Revolution. Western countries, the developing countries argue, have not only greater financial means to invest in their domestic renewable energy and infrastructure but should aid the most at-risk developing countries in their mitigation and adaptation efforts, as well as compensate them for the permanent loss and damage resulting from climate change.

Developing countries maintain that the climate finance pledges of COP15, held in 2009 in Copenhagen, to dramatically increase funding to $100 billion a year by 2020 to assist in climate change adaptation and mitigation were not fulfilled. And if the developed countries are serious about global decarbonization goals, they will assist the developing countries in the transformation of their industrial, manufacturing, and consumption patterns.

The principle of loss and damage is poised to become a contentious issue for COP27, as it is incredibly challenging to precisely quantify the cost of climate change on ecosystems, national economies, and cultural heritage. Consequently, developed countries are cautious in agreeing to a loss and damage compensation scheme as it could impose a significant liability upon them that could reach at least $1 trillion annually by 2050.

The United States and European Union (EU), both the largest historical emitters, fear that legal acknowledgment of loss and damage could open them to a tsunami of perpetual lawsuits by climate-vulnerable countries and domestic stakeholders. Seeking to avoid such an outcome, the Americans and Europeans argue that current finance frameworks, such as the previously pledged $100 billion climate finance fund and humanitarian grants, would be more than suitable to aid in loss and damage compensation. And, as a corollary, they maintain that additional international aid packages could cover any further climate-change damage.

But developing countries find two problems with such a proposal: a large proportion of the current climate finance funding is provided by loans, not grants; and such funding is mainly funneled toward mitigation and not adaptation. At COP27, developing countries will argue that adaptation is a much more critical concern of theirs.

Some alternatives that could likely be tabled during the negotiations would be a windfall tax on the excess profits of oil and gas companies that could potentially be collected and placed into a specially designated global fund. Debt cancellation for developing countries is also considered a means of reducing the financial burden of climate adaptation and damage. Furthermore, a global carbon pricing framework could also support a global loss-and-damage fund.

In addition to this, African and Middle Eastern gas-rich countries are poised to pitch natural gas as the “perfect solution” to climate change and energy security. This view of natural gas as a bridge fuel to a low-carbon future aligns with the EU’s somewhat controversial pivot in February 2022, when it reversed its earlier position and declared that natural gas was a viable transitional fuel. The Russian invasion of Ukraine deepened this position of European policymakers as they attempt to decouple Europe from the Russian energy sector. Yet, climate activists denounced this policy shift as inimical to global decarbonization and contend that such a gas-friendly policy would further embed the hydrocarbon consumption model from which the world is transitioning.

The African Union, however, in rare unanimity, will advance a common energy position at COP27 that proclaims hydrocarbons are essential for the continent’s economic growth and the alleviation of energy poverty. Many African policymakers believe that energy security should not only be considered in the context of the availability of consistent energy supplies to Europe; rather, it should take into account the nearly half a billion sub-Saharan Africans without basic electricity access. African countries perceive the overriding global concern about European energy security and the focus on renewable energy development as the panacea for Africa as a form of “climate imperialism” that dismisses their misgivings about the Western prescriptions for African economic development.

Still, in addition to the environmental disputes, detractors point out that hydrocarbon exploitation has not, on the whole, fostered broad-based economic development throughout Africa, nor has it substantively alleviated widespread poverty. Instead, corrupt autocrats have often misused Africa’s hydrocarbon wealth to buttress their personal fortunes. For instance, in Nigeria and Angola, two of sub-Saharan Africa’s largest oil producers, electricity access for their populations is at a mere 57 percent and 40 percent, respectively. As a case in point, Nigeria, a longstanding member of OPEC exporting its oil and gas to the international market, has one of the world’s largest per capita energy access deficits.

Tangible and practical solutions to the interlocked issues of climate financing, loss and damage compensation, and sustainable economic growth pathways are not mutually exclusive. If carefully considered, they offer an opportunity for global policymakers to hammer out their differences at this immensely critical juncture.

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.