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COP27: What Can We Take Away From This Year's Global Climate Summit?

COP27: What Can We Take Away From This Year's Global Climate Summit?

Following the two-week climate summit in Egypt, representatives and negotiators from across the globe reached a series of conclusions; the most prominent of which being support for climate victims in the form of a loss and damage facility – with a commitment to set up a financial support structure for the most vulnerable by the next COP in 2023.

Additional notable actions include the ‘mitigation work programme’, which sets out to reduce emissions faster, create immediate momentum on impactful action, and secure assurances from key countries that they will take immediate action to raise ambition and keep us on the path towards 1.5°C. 

Yet, while agreement on these issues was seen as a welcome step in the right direction, there seemed little proviso on key issues such as the phasing out of fossil fuels, and tightened language on the need to limit global warming to 1.5 degrees Celsius.  

Observers have warned that new language including “low emissions” energy alongside renewables as the energy sources of the future is a significant loophole, as the undefined term could be used to justify new fossil fuel development against the clear guidance of the UN Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA).

UN Secretary-General António Guterres reminded the world of what remain the priorities regarding climate action, including the ambition to reduce global greenhouse gas emissions and keep alive the Paris Agreement’s 1.5 degree Celsius limit, and pull humanity “back from the climate cliff”.

“We need to drastically reduce emissions now,” he stressed, saying that the world still needs to make a giant leap on climate ambition, and to end its addiction to fossil fuels by investing “massively” in renewables.

The UN chief also emphasised the need to make good on the long-delayed promise of $100 billion a year in climate finance for developing countries, establishing clarity and a credible roadmap to double adaptation funds.

He also reiterated the importance of changing the business models of multilateral development banks and international financial institutions.

“They must accept more risk and systematically leverage private finance for developing countries at reasonable costs,” he said.

He renewed his call for just energy transition partnerships to accelerate the phasing out of coal and scaling up renewables and reiterated the call he made on his opening speech at COP27: a climate solidarity pact.

“A Pact in which all countries make an extra effort to reduce emissions this decade in line with the 1.5-degree goal. And a Pact to mobilize – together with international financial institutions and the private sector – financial and technical support for large emerging economies to accelerate their renewable energy transition,” he explained, underscoring that this is essential to keep the 1.5 degree limit within reach.

Guterres highlighted that COP27 concluded with “much homework” still to be done and little time in which to do it.

“We are already halfway between the [2015] Paris Climate Agreement and the 2030 deadline. We need all hands on deck to drive justice and ambition,” he stated.

The Secretary-General added that this includes ambition to end the “suicidal war” on nature that is fuelling the climate crisis, driving species to extinction and destroying ecosystems.

Next month’s UN Biodiversity Conference is the moment to adopt an ambitious global biodiversity framework for the next decade, drawing from the power of Nature-based Solutions and the critical role of indigenous communities,” he urged. 

COP15 will see environment ministers and negotiations meeting in Montreal for the 15th Biodiversity COP. Their primary aim is to agree on a treaty for nature this decade, in Paris Agreement style, that will ultimately bring an end to nature degradation and shift the world into a new era of widespread nature restoration.

COP26’s focus on nature had many hoping, ahead of COP27, that the appetite for action would follow through this year. The final agreement does include a section on forests which, unlike the COP26 documents, makes specific reference to nature-based climate solutions. Parties are “encouraged, as appropriate, to consider Nature-based Solutions or ecosystem-based approaches” in their climate adaptation and social sustainability plans.

There are opportunities to be gained from a market shaped by nature-related policies and nature-smart businesses, including mitigation of nature-related risks and through directing capital towards nature-positive outcomes. Nature-based Solutions offer diverse benefits, drawing on ecosystem services, and at their best, on local knowledge of nature, these solutions are often cost effective and support resilience against climate change.  

Rio ESG’s Guide to Biodiversity & Nature-based Solutions has been designed to help financial professionals understand the key concepts behind biodiversity, nature-related reporting, and nature-based solutions. This guide assesses key nature-related topics for financial professionals, reviews the current and future landscape of reporting, accounting, and legislation, and points you in the direction of useful resources.