COP 27: Imperfect Progress

One huge step forward. One enormous step back. For COP 27, as they say, that's the tweet.

The reality of perhaps the most consequential set of climate talks since COP 21 produced the Paris Agreement is more complex, of course. But two outcomes in particular after of two weeks of intense and often fractious negotiations in the Egyptian resort town of Sharm El-Sheikh give the climate movement (pretty) clear marching orders for the year ahead.

The Big Win: The Loss and Damage Fund

For years, developing nations pummeled by powerful storms, rising seas, endless drought, and other climate impacts driven – primarily – by emissions from wealthy countries have pushed those countries for financial support to pay for the destruction they've fueled and the subsequent rebuilding. And for years, wealthy countries, fearful of any sense of legal liability and potentially unlimited financial claims, have resisted.

That all changed at COP 27, and with it, the vocabulary and landscape of climate action going forward. This was the first conference where the concept of finance for "loss and damage" had a place on the formal agenda. Negotiators seized the opportunity to make the moral case for a dedicated fund to support losses and damages in the hardest hit countries both from slow onset disasters like rising seas and sudden ones like super typhoons.

First the EU went in, and finally, after initially resisting, the US gave in. What this will look like is still TBD, with a transitional committee tasked with developing recommendations for funding to be presented at next year's COP 28 in the United Arab Emirates (no, really).

It's hard to overstate how revolutionary this development is for bringing a new sense of justice to the highest level of global climate talks.

The only question is why it took so long. After all, poor nations and advocates have been making the case for years and years. Maybe it was the tragedy of climate-fueled flooding in Pakistan that killed over 1,700 and left nearly a third of the country underwater. Maybe it's a combination of naked self-interest and the growing realization in rich countries that preventing climate destruction may be the best investment in preventing mass displacement and social unrest they can make. But at least it happened.

The Big Caveat: Finding the Money

With the loss and damage fund as with nearly everything else, the money will ultimately talk. And when the gavel came down to end negotiations, on the subject of where the money will come from, COP 27 was silent.

As mentioned above, in part that's because recommendations for how this fund will operate and who will pay into it are supposed to be worked out over the course of 2023. For the moment, the fund is an empty box and the signs are not as promising as they might be that there will be a stampede to fill it. Already, rich countries have failed to make good on their existing commitments and some in Congress have already vowed to fight any new funds. There's also the question of whether major economies like China and Singapore and wealthy petro-states like Saudi Arabia and Russia will be expected to contribute, with resistance to the idea high so far.

Even with these obstacles, there is cause for hope. Leaders like Barbados Prime Minister Mia Mottley have called for innovative new approaches to global finance to support developing nations adapting to climate change, with ideas like suspending debt payments in the wake of climate disasters in what has come to be called the Bridgetown Initiative.

Another avenue of possibility lies in reforming multilateral development banks like the World Bank to align their overall investments with global climate goals. All of which to say, there is work to be done and real challenges ahead, but also real reasons for optimism. Watch this space.

The Big Loss: A Failure on Mitigation

With the tagline "Together for implementation," COP 27 was presented as a chance to build on the progress on emissions reduction and energy transition from the previous year's conference in Glasgow. In particular the final decision announcing a qualified agreement on the need to "" unabated coal use and phase-out inefficient fossil fuel subsidies.

Here, COP 27 simply failed to deliver. Advocates and a group of nations across the development spectrum from the US to India pushed for an agreement to phase out all fossil fuels. But they hit a brick wall with petro-states like Russia and Saudi Arabia (yes, again) resisting, and with a final agreement needing consensus from all the parties involved in talks, that was effectively that.

Yes, the final decision does reaffirm the Paris Agreement goal of holding warming to 1.5 degrees Celsius – a non-negotiable for many climate vulnerable nations already being swallowed by rising seas and more. But the language here (and resolve) is weak, with the draft cover text only calling on nations to "to pursue efforts to limit the temperature increase to 1.5°C" rather than specifying the most important concrete step to do so (namely, phasing out fossil fuels), effectively giving countries the cover to say, "Well, we tried."

The outgoing COP 26 President Alok Sharma from the UK captured the deep disappointment as the gavel came down in Sharm El-Sheikh when he told negotiators:

"Emissions peaking before 2025, as the science tells us is necessary.

Not in this text.

Clear follow-through on the phase down of coal.

Not in this text.

A clear commitment to phase out all fossil fuels.

Not in this text.

And the energy text, weakened, in the final minutes.

Friends, I said in Glasgow that the pulse of 1.5 degrees was weak.

Unfortunately, it remains on life support.

And all of us need to look ourselves in the mirror, and consider if we have fully risen to that challenge over the past two weeks."

So Where Do We Go from Here?

It's going to be a busy year. The next round of talks will be in the United Arab Emirates and we can expect hostility to ending fossil fuels and improving on the (lack of) ambition in the COP 27 agreement to be high. Plus, as hosts, the UAE will have the power to shape the agenda of talks aiming to curtail its primary source of revenue. So initial signs are . . . challenging.

But for all the very real disappointment at the failure to raise the bar in Egypt, remember the incredible achievement of the loss and damage fund that – for all its open questions and caveats – opens the door to a better world for billions in some of the poorest nations across the planet. Remember that we are closing out a year in which the US passed the biggest climate bill in history, Australia passed its own landmark legislation, and Brazil dumped perhaps the world's most dangerous climate denier out of office for a president committed to climate action.

Which is to say, the road ahead will not be easy. But there are reasons for hope and key markers of progress in our fight. And what comes next is at least partially – as it always is – up to us

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