Concentrations of CO2 emissions in the atmosphere are now 50 per cent higher than in pre-industrial times1 and globally, the World Meteorological Organisation estimates surface temperatures are up around 1.17°C since 1850-1900, and this could rise to between 1.1-1.7°C in 2022-2026. The 27th UN Climate Change Conference of the Parties (COP27) is taking place in Sharm el-Sheikh, Egypt and will bring together 198 parties to move climate discussions forward on key issues including adaptation, loss & damage and finance.

As of 22 September 2022, 194 Parties, covering around 98 per cent of global greenhouse gas (GHG) emissions have ratified the Paris Agreement. These parties will come together in an effort to: secure global net zero by mid-century and keep 1.5 degrees within reach, adapt to protect communities and natural habitats, mobilise public and private finance, and work together to deliver the rules needed to implement the Paris Agreement. The task for COP27 will be to make appropriate and balanced progress across all climate issues to help “operationalise” and implement the Paris Agreement. There are fewer critical decisions to be made this year but COP27 will still be vital in progressing climate discussions and to implement actions from Glasgow, prepare for the global stocktake, and lay the groundwork for key decisions to be implemented in the future.

Egypt is hosting on behalf of the African continent which is highly vulnerable to the impacts of climate change hence adaptation with be a key focus. Egypt aims to deliver ‘transformational adaptation’ to address many gaps across policy, planning, implementation and finance. Discussions at COP27 will make progress on various parts of The Glasgow-Sharm el-Sheikh work programme on the global goal on adaptation (GGA). The GGA and discussions on adaptation will feed into the global stock take (GST) and delegates will also be expected to analyse how to make progress on their National Adaptation Plans (NAPs).

The topic of Loss and Damage (L&D) is likely to be equally as challenging for negotiators this year. Both the Santiago Network and The Glasgow Dialogue on Loss & Damage were established at COP26 and both require discussions to progress to become fully operational. The Santiago network for loss and damage is designed to provide relevant tools and technical assistance to developing countries. Discussions on the various aspects such as operational modalities, structure, governance and its terms of reference will continue at COP27. The Glasgow Dialogue on Loss & Damage is a formal discussion between Parties to address potential funding arrangements required for L&D. As developed nations missed the 2022 promise of providing USD100 billion, developing nations will be looking for assurances on how this is to be fulfilled by 2023.

Mobilising finance is key to realise the goals of the Paris Agreement. International institutions and financial institutions are expected to play their part to work towards unleashing the trillions in private and public sector finance required to secure global net zero. A formal work programme for all Parties to work together in discussing the new collective quantified finance goal (NCQG) was established last year. The aim of the NCQG is to contribute to the Paris Agreement (in particular 1.5⁰C), support future mobilisation, access and delivery of climate finance. All Parties will be working together to discuss the new collective quantified finance goal and finalise many aspects including its scope, objectives and principles at COP27.

In the midst of current geopolitical events (cost of living, energy crisis and Russia-Ukraine war) COP27 will signal how governments, businesses and the general public are pursuing continued climate action over the short term. The article produced by HSBC Global Research provides further analyses on the themes discussed above, other key areas of focus and presents the different outcomes expected from the standing items on the COP agenda.

1 The US National Oceanic and Atmospheric Administration, NOAA

 

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