Major Outcomes from COP27

Major Outcomes from cop27

28 November 2022

COP27 in Egypt, otherwise named The Sharm el-Sheikh Implementation Plan, has recently drawn to a close, so we take this time to look at its outcomes and what businesses can do to support its commitments. This year the event was controversially funded by Coca-Cola, the world’s biggest plastic polluter, and boycotted by Greta Thunberg because of her view that it is a forum for greenwashing. Negotiations at the conference covered many climate topics, and this article will focus on the two aspects that COP27 will be remembered for: the idea that keeping global warming at 1.5 degrees is no longer politically possible, and the new loss and damage fund aimed at helping climate-vulnerable countries.

Loss of Hope for 1.5 Degrees

1.5 degrees has been identified as a tipping point for the environment, but a negative outcome of COP27 is that this is no longer politically realistic. This is because commitments made in Egypt mean that the world is on track for global warming between 2.1 and 2.9 degrees. Moreover, this scenario assumes that countries will keep to their pledges, which is not guaranteed, and straying from these commitments would push global warming even higher. Staying within 1.5 degrees warming requires global emissions to reduce by 50% by 2030, however they are currently increasing. Temperatures have already risen by 1.1 degrees, so there is limited time to act. The recent emissions gap report stated that there needs to be a system wide transformation regarding emissions reductions, but this has not been seen during COP27.

Many people are frustrated that The Sharm el-Sheikh Implementation Plan is similar to the Glasgow Climate Pact (COP26), in that it uses weak and unspecific language about how emissions will be reduced, which can partly be blamed on the large presence of fossil fuel lobbyists at the event. This includes terms such as ‘phasedown of unabated coal power’ and ‘phase-out of inefficient fossil fuel subsidies’ which means that coal power stations will not have to be completely phased out, and it leaves space for interpretation of what ‘inefficient fossil fuels’ are.

It is therefore more important than ever that businesses reduce emissions as much as possible to contribute to net zero goals. Not only does this mean working on your own scope 1 and 2 emissions, but also putting pressure on suppliers, since they will contribute to your scope 3 emissions.

The Loss and Damage Fund

On a slightly more positive note, COP27 will also be remembered for its loss and damage agreement. Rich countries have agreed to contribute to help cover some of the costs of climate change for poorer countries, and details of implementation will be discussed in March.

Loss and damage can be defined as the impacts of climate change that people are not able to adapt to, and which cannot be mitigated. It can be split into different categories, such as economic loss, goods and services and non-economic loss such as people dying, loosing territories, biodiversity and culture. The loss and damage fund can be seen as a positive step for global climate equity, since many of the richer countries paying for the fund have had a higher impact on global warming, and the receiving countries are disproportionately harmed by its effects.

On the other hand, there is some criticism around the effectiveness of a loss and damage fund when the commitments to reduce climate change remain weak. As Alice Hill, from the Council on Foreign Relations stated, “Money alone won’t end the climate crisis. To avoid cataclysmic extremes, countries, corporations, and communities must rapidly reduce their greenhouse gas pollution. That job can no longer wait.”

In addition to reducing emissions, businesses can also help with loss and damage by becoming aware of areas in their value chain that may be exposed to climate risk. This will put businesses in a better place to help suppliers in these regions, for example by providing them with increased wages so that they can pay for preventative measures against climate disasters.

Conclusion

We can see from COP27 that global emissions commitments are not enough to keep global warming at safe levels, but that efforts to support climate vulnerable areas are underway. We can do our best as individuals and businesses to keep emissions as low as possible and to evaluate whether what we are buying/selling will affect people in areas at risk of climate change. Let’s hope that significant progress will be made by countries achieving their emissions commitments before next year’s COP28, which will be held in the United Arab Emirates.