Cop27 Wrap-Up

The UN’s climate summit concluded over the weekend, with a historic funding deal reached to help developing countries cope with climate crises. However, most observers agree Cop27 didn’t go far enough on much else, failing to secure urgent improvements in emissions cuts.

The Loss and Damage Fund: a Cop27 win…

‘Loss and damage’ has been on the agenda of developing countries at climate summits since the early 1990s, and was a key issue at Cop27. The term refers to the push for the burden of financial assistance to poor countries dealing with extreme climate impacts to be shouldered by richer countries, as the world’s major emitters.

The European Union and the US resisted for almost the entire fortnight of the summit, maintaining that existing funds should be redirected for this purpose. But early on Friday morning, the EU did a 180, agreeing to the fund, with the US following suit on Saturday.

As many have pointed out, maximising the effectiveness of a loss and damage fund requires much more concrete action to limit emissions.

“Today, the international community has restored global faith in this critical process that is dedicated to ensuring no one is left behind,” rejoiced Sir Molwyn Joseph, the minister for health, wellbeing and the environment for Antigua and Barbuda.

“We have shown those who have felt neglected that we hear you, we see you, and we are giving you the respect and care you deserve,” he added. Sir Joseph is also the chair of the Alliance of Small Island States.

The fund will be set up over the next year, and the details of who will contribute, how much, and on what basis, are still murky. Few nations have made significant pledges to the fund in the aftermath of the decision.

…And not much else: Cop27’s disappointments

Aside from the loss and damage fund, climate activists were let down by a lack of action by governments. Most concur that very little progress has been made on the agreements made a year ago at Cop26.

One of the key goals at this year’s summit was to secure stronger emissions pledges, to make urgent strides towards limiting global warming to 1.5C above pre-industrial levels. This did not happen – and at this point many are losing hope.

“The goal to limit global warming to 1.5 degrees is on life support,” said Bahamas’ Prime Minister Philip Davis, echoing rhetoric used by many climate leaders. “This is a hard truth for many to admit, because even the best-case scenarios will mean almost unimaginable upheaval and tragedy.”

Discussion around reforming the World Bank and other publicly-funded finance institutions to better align with climate action was another feature of this year’s summit.

While India suggested amending the language to ‘phasing down’ all fossil fuels, oil-producing countries and fossil fuel lobbyists won out, and the Cop26 phrasing of just phasing down coal was kept. Other key commitments pushed by countries like the UK, including peaking emissions by 2025 – crucial to keeping 1.5 alive – were also shot down.

Alok Sharma, the UK president of Cop26, summarised the failures of the summit:

“We had to fight relentlessly to hold the line. We had to battle to build on the key outcomes of Glasgow. Peaking emissions by 2025 is not in this text. Follow-through on the phasedown of coal is not in this text. The phasedown of all fossil fuels is not in this text.”

Ultimately, while Cop27 was bitterly disappointing, the reluctance of world leaders to commit to what is necessary for the future of humanity is unfortunately unsurprising.

But the historic loss and damage deal is certainly a win to celebrate, and negotiators who fought tooth and nail to avoid the backsliding many dreaded at the summit are to be commended for their efforts. It’s not over until it’s over!

Follow Maddie’s journalism on Twitter.

Sign Up To Our Free Newsletter To Receive Our Upcoming Report On A Low P/E Stock With An International Growth Runway