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Five key takeaways from COP27

Although the 27th Session of the Conference of the Parties (COP27) to the UN Framework Convention on Climate Change (UNFCCC) is behind us, the decisions taken in the Egyptian city of Sharm el-Sheikh require all countries to make an extra effort to address the climate crisis – starting now.

Delegates applaud as COP27 reaches a breakthrough agreement in Egypt

Or as UN Secretary-General, António Guterres, puts it, “COP27 concludes with much homework and little time.”

So, what did COP27 achieve and what needs to happen next to ensure the world can keep the worst consequences of climate change at bay?

Here are five key takeaways from the conference, which will also shape the priorities for climate action in 2023 and beyond.

Establishing a dedicated fund for loss and damage

COP27 closed with a breakthrough agreement to provide loss and damage funding for vulnerable countries hit hard by floods, droughts and other climate disasters.

This was widely lauded as an historic decision. Why? Because, for the first time, countries recognised the need for finance to respond to loss and damage associated with the catastrophic effects of climate change, and agreed to the establishing of a fund and the necessary funding arrangements.

Although the details will need to be hammered out over the coming year – who should pay into the fund, where this money will come from and which countries will benefit – it’s “an important step towards justice,” said the UN Secretary-General.

A “transitional committee” will make recommendations on how to operationalise both the new funding arrangements and the fund for consideration and adoption at COP28 next year. The first meeting of the transitional committee is expected to take place before the end of March 2023.

“This outcome moves us forward,” said Simon Stiell, UN Climate Change Executive Secretary. “We have determined a way forward on a decades-long conversation on funding for loss and damage – deliberating over how we address the impacts on communities whose lives and livelihoods have been ruined by the very worst impacts of climate change.”

Maintaining a clear intention to keep 1.5°C within reach

The world is in a critical decade for climate action. This is not hyperbole – the UN’s Intergovernmental Panel on Climate Change says limiting warming to around 1.5°C requires global greenhouse gas emissions to peak before 2025 at the latest, and be reduced by 43% by 2030. That’s seven short years from now.

However, the world is currently off course to keep 1.5°C within reach. A stark report from UN Climate Change shows implementation of current pledges by national governments puts the world on track for a 2.5°C warmer world by the end of the century.

At COP27, countries reaffirmed their commitment to limit global temperature rise to 1.5°C above pre-industrial levels.

That means the global economy must “mitigate” climate change – in other words, we must reduce or prevent the emission of greenhouse gases to get us to where science says we need to be by 2030. In line with that, a mitigation work programme was established in Sharm el-Sheikh, aimed at urgently scaling up mitigation ambition and implementation. The work programme will start immediately and continue until 2026 when there will be a review to consider its extension.

At COP27, governments were also requested to once again revisit and strengthen the 2030 targets in their national climate plans by the end of 2023, as well as accelerate efforts towards the phasedown of unabated coal power and phase-out inefficient fossil fuel subsidies. Governments stressed the importance of a clean energy mix, including low-emission and renewable energy as part of diversifying energy sources and systems.

So, what should we keep an eye on in 2023? Countries will be expected to come to the table with stronger and more ambitious climate plans than they did in 2022. These plans will be submitted to the UN Climate Change secretariat throughout 2023. Toward the end of next year, the secretariat will analyze the plans to see how closely (or not) those plans keep the 1.5°C limit in reach.

Also critical to meeting the temperature limit is the first global stocktake, which held its second technical dialogue at COP27. The stocktake is where countries and non-Party stakeholders come together to discuss where they are collectively making progress towards meeting the goals of the Paris Agreement – and where they’re not.

“The global stocktake is an ambition exercise. It’s an accountability exercise. It’s an acceleration exercise,” said Stiell. “It’s an exercise that is intended to make sure every Party is holding up their end of the bargain, knows where they need to go next and how rapidly they need to move to fulfill the goals of the Paris Agreement.”

These discussions are a key component towards the goal to limit global warming to 1.5°C. At COP28, the key findings of the stocktake process will be synthesised and presented, and their implications discussed and considered, ultimately resulting in stronger and more ambitious climate plans from national governments.

Holding businesses and institutions to account

This new phase of implementation also means a new focus on accountability when it comes to the commitments made by sectors, businesses and institutions.

“There is absolutely no point putting ourselves through all that we’ve just gone through if we’re going to participate in an exercise of collective amnesia the moment the cameras move on,” said Stiell, who promised a new focus on accountability during his opening speech at COP27.

The transparency of commitments from businesses and institutions will be a priority of UN Climate Change in 2023. The UN Secretary-General asked UN Climate Change to come up with a plan early next year on how to ensure transparency and accountability with non-state actors.

UN Climate Change has a public platform – the Global Climate Action Portal – that is already being used to register pledges, publish transition plans, and track annual reporting on implementation. But it needs to be scaled up.

Mobilising more financial support for developing countries

Finance is at the heart of all that the world is doing to combat climate change. Mitigation, adaptation, loss and damage, climate technology – all of it requires sufficient funds to function properly and to yield the desired results.

On this crucial topic, COP27 created a pathway to align the broader finance flows towards low emissions and climate resilient development.

The COP27 cover decision, known as the Sharm el-Sheikh Implementation Plan, highlights that a global transformation to a low-carbon economy is expected to require investments of at least $4-6 trillion a year. Delivering such funding will require a swift and comprehensive transformation of the financial system and its structures and processes, engaging governments, central banks, commercial banks, institutional investors and other financial actors.

One of the key outcomes of the various decisions on climate finance is a call for developed country Parties to provide resources for the second replenishment of the Green Climate Fund. All countries welcomed the recent pledges made to the Adaptation Fund (totaling $211.58 million), the Least Developed Countries Fund (totaling 70.6 million), and the Special Climate Change Fund (totaling 35.0 million).

At COP27, deliberations continued on setting a ‘new collective quantified goal on climate finance’ in 2024, taking into account the needs and priorities of developing countries.

However, serious concern was expressed that the goal of developed country Parties to mobilise jointly $100 billion per year by 2020 has not yet been met, with developed countries urged to meet the goal, and multilateral development banks and international financial institutions called on to mobilise climate finance.

UN Climate Change’s Standing Committee on Finance was requested to prepare a report on doubling adaptation finance for consideration at COP28 next year, as well as the biennial progress report on the $100 billion goal starting 2024.

Making the pivot toward implementation

Of course, climate pledges aren’t worth the paper they’re written on if they aren’t taken off the page and turned into concrete action.

That’s why COP27 was expected to be one of “implementation.”

On the opening day of the conference, UN Climate Change Executive Secretary Simon Stiell called for aligning “every corner of human activity” with the 1.5°C goal, saying “Paris gave us the agreement and Katowice and Glasgow gave us the plan, Sharm el-Sheikh shifts us to implementation.”

But what does a shift to implementation mean and what will it look like?

For starters, the package of decisions adopted at COP27 have a strong focus on implementation – they aim to strengthen action by countries to cut greenhouse gas emissions and adapt to the inevitable impacts of climate change, as well as boost the support of finance, technology and capacity building needed by developing countries.

Notably, nations resolved to make the transition to low-emission and climate-resilient development ambitious, just and equitable. They went one step further at COP27 by deciding to establish a work programme on “just transition”, which is expected to build on and complement the work to urgently scale up mitigation ambition and implementation.

The Paris Agreement calls on signatories to take into account “the imperatives of a just transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.” That means a just transition is not a fixed set of rules, “but a vision and a process based on dialogue and an agenda shared by workers, industry, and governments that need to be negotiated and implemented in their geographical, political, cultural, and social contexts,” according to the International Institute for Sustainable Development.

Speaking about the year ahead, Stiell said UN Climate Change will help Parties and future COP Presidencies navigate this path to the new phase of implementation.

“The heart of implementation is: Everybody, everywhere in the world, every single day, doing everything they possibly can to address the climate crisis,” said Stiell.

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