Towards COP28: COP27 Takeaways
Energy, Utilities, Mining and COP28
Ayman NourPartner, Corporate Structuring
The 2022 United Nations Climate Change Conference (COP 27) held in Sharm El Sheik, Egypt witnessed the introduction of several new funds and initiatives. COP 27 had an overall target of implementation, as evident of the groundbreaking introduction of the loss and damages fund, which has been undergoing discussions for numerous years. Additionally, many innovative initiatives were announced during COP 27 including the Early Warnings for All by the United Nations (UN) as well as the Global Shield against Climate Risks by the G7 and V20. COP 28 needs to see greater progression from these funds as well as the support and contribution from several countries if these initiatives are to advance towards their long-term objectives.
In light of COP 27 being held in Egypt, Egypt submitted its First Updated NDC in 2022 which included several new targets and action plans to reduce gas emissions. This plan indicates that Egypt will reach a renewable energy capacity of 40% by 2030. To do so, Egypt needs to scale up its renewable energy capacity by restructuring the electrical grid to become a smart grid. Additionally, the Egyptian Ministry for Electricity and Renewable Energy created an Integrated Sustainable Energy Strategy 2035 (ISES 2035) that aims to turn Egypt into an energy hub through the development of various sectors in Egypt and improving their use of renewable energy. This strategy’s ultimate objective is to increase the supply of electricity generated from renewable sources to 42% by 2035. The Egyptian government also launched the National Initiative for Smart Green Projects Governorates in Egypt’s Governorates (NISGP) which aims to achieve “sustainable development goals, addressing the effects of climate change, accelerating digital transformation” (NIGSP, 2022). The Egyptian cabinet also approved the creation of the National Council for Green Hydrogen in 2023 to ensure that Egypt is on the right track of implementing its National Strategy for Green Hydrogen. COP 27 attracted foreign investment into Egypt, with the United States, Germany, and the European Union pledging $500 million to finance Egypt’s transition towards the use of clean and renewable energy sources. Therefore, COP 27 had a positive impact on Egypt as it attracted investment into the Egyptian renewable energy sector and encouraged the creation of several new initiatives in Egypt.
The most significant event that occurred during COP 27 was the implementation of the loss and damages fund. The idea of this fund has been going around for years and discussed throughout previous COPs. However, no agreement has been made prior to COP 27. This is due to wealthier countries' concerns over this agreement's legal stipulations and their potential need to foot the bill for climate change damages. Nevertheless, countries finally reached an agreement during COP 27 after several disagreements over funding arrangements that led to the extension of the COP for a few days. The loss and damages fund was created to aid developing countries in their struggle against climate change. A transitional committee was created during COP 27 with goals of “establishing institutional arrangements, modalities, structure, governance and terms of reference for the fund, defining the elements of the new funding arrangements, identifying and expanding sources of funding, [and] ensuring coordination and complementarity with existing funding arrangements” (United Nations Transitional Committee, 2022). This committee will introduce its findings and proposals by COP 28. A final agreement regarding the structure, funding arrangements and governance mechanism of the fund must be approved by nations based on the transitional committee’s proposals by COP 28.
Another significant event that occurred during COP 27 was the launch of the Early Warnings for All initiative by the United Nations (UN). Currently, only half of the countries have adequate early warning systems that allow them to analyze emergency conditions and devise an action plan. Hence, this initiative was launched with the objective of delivering early warning systems to every individual by 2027. This system hopes to reduce the consequences of climate emergencies by providing early warning of an impending hazard by predicting and forecasting climate risks. To do so, this initiative needs to collect $3.1 billion in investments over five years. The UN claims that investing in this fund will result in long-term cost savings by preventing huge losses in the event that climate catastrophes erupt without warning. According to the UN’s executive plan, this initiative needs to create a Global Status Report by COP 28 that provides a plan to build the early warning for all system while also collecting information regarding existing warning systems and their shortcomings.
The Global Shield against Climate Risks is another important initiative launched during COP 27 by a collaboration between the Vulnerable 20 (V20) Group of Ministers of Finance and the group of seven (G7) with the goal of providing better and more consistent financial support to these groups’ partner countries. The G7 consists of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States of America, while the V20 consists of 58 nations including, Afghanistan, Bangladesh, Colombia, Costa Rica, Ethiopia, Ghana, Lebanon, Liberia, Maldives, Mongolia, Morocco, Philippines, Rwanda, Sudan, Tunisia, Uganda, Vietnam, and Yemen. Due to the unpredictable nature of climate emergencies, the global shield seeks to give immediate financial assistance to its partner countries when dealing with a climate emergency. The long-term objective of this initiative is to provide more strategic and consistent funding to vulnerable countries experiencing climates crises. Furthermore, the V20 and G7 intend to extend Global Shield protection to more vulnerable countries by COP 28. To accomplish the following, this initiative needs to raise additional funds by COP 28.
It has been internationally agreed upon to limit temperature rises to 1.5 Celsius. This has been an overarching goal throughout previous COP summits. Nonetheless, there is a significant disparity between this target and the strategies presented by countries on how they are planning to limit their emissions. Since COP 26, nations have been urged to present more strategies as well as to update their NDCs (Nationally Determined Contributions), a non-binding national plan, in order to work towards the target of limiting temperature rises to below 1.5c degrees through reducing emissions. Despite this urgency, only 11 new strategies were proposed during COP 27. Therefore, countries have been prompted yet again to update their NDC’s to provide a rigorous climate strategy on how they are planning to lower their emissions in order to collectively move towards the goal of lowering temperature rises to 1.5c.
The initiatives mentioned above present new opportunities for tackling climate related crises and enable more innovative approaches that may help vulnerable nations cope with climate emergencies. To do so, these initiatives need to abide by their plans and produce their scheduled outcomes for 2023 by COP 28. Furthermore, Cop 28 must also see the unveiling of new long-term strategies on curbing emissions as well as updated NDCs from nations.
For further information,please contact Ayman Nour.
Published in November 2023
