Enforcement and Inspection, Regulatory Developments, Special Topics in Environmental Management

COP27 News, Agreements, and Future Implications

In November 2022, hundreds of delegates, heads of state, business leaders, activists, and journalists went to Sharm El-Sheikh, Egypt, for the 27th United Nations (UN) Climate Change Conference (COP27) to discuss reducing greenhouse gas (GHG) emissions and how to battle climate change impacts. 

World leaders made several speeches during the conference, with UN Secretary General António Guterres stating, “Our planet is fast approaching tipping points that will make climate chaos irreversible. We are on a highway to climate hell with our foot still on the accelerator. It is the defining issue of our age. It is the central challenge of our century. It is unacceptable, outrageous and self-defeating to put it on the back burner,” says The Hill.

Attendees expressed frustration regarding the lack of progress on reducing GHG emissions and what Nature.com characterized as a “lack of ambition to phase out fossil fuels.”

The UN Environment Programme (UNEP) released The “Emissions Gap Report 2022” just before the conference, which found that without rapid societal transformation, there is no credible pathway to a 1.5°C future. For each fraction of a degree that temperatures rise, storms, droughts, and other extreme weather events become more severe.

With 45,000 registered attendees to COP27, nature.com says some expressed concern that it has been reduced to a “grand spectacle.”

“Although there is value in bringing people together to share ideas and build momentum, she [Sunita Narain, director-general of the Centre for Science and Environment, an environment research organization in New Delhi] fears that the core purpose of the meeting — to push world leaders to commit to stronger action and hold them accountable — has been lost,” nature.com continues.

“After a year of diplomacy by the Egyptian presidency, strenuous informal work before COP27, two weeks of highly complex technical and political negotiations, and attempts to break the negotiation stalemates, nearly 200 countries agreed on the Sharm el-Sheikh Implementation Plan,” says a Latham & Watkins Environment, Land & Resources Practice Client Alert.

The 10-page summary document of the plan “recognizes that limiting global warming to 1.5 °C requires rapid, deep and sustained reductions in global greenhouse gas emissions of 43 per cent by 2030 relative to the 2019 level.”

Loss and damage fund

One of the major outcomes of COP27 was the decision to create a loss and damage fund for use in supporting those countries most vulnerable to climate change, such as Pakistan, where this year’s flooding has resulted in damages that were estimated at $30 billion.

Previous agreements provided funds to countries for mitigation to use for adaptation and to move away from fossil fuel usage.

The new fund is designated “to help poorer nations recover from the impacts of climate change, such as destroyed homes, flooded land or lost income from dried-out crops,” says the BBC.

“While the negotiated text recognized the need for financial support from a variety of sources, no decisions have been made on who should pay into the fund, where this money will come from and which countries will benefit,” the UNEP says. “The issue has been one of the most contentious on the negotiating table.”

U.S. Climate Envoy John Kerry initially opposed the fund, stating there were existing funds to cover climate crisis damages. The European Union (EU) also expressed skepticism about the creation of such a fund but changed its position to one of supporting the fund during conference negotiations.

It’s speculated that countries with high GHG emissions histories, such as the United States and China, will be tapped for much of this funding. Funding for these losses could amount to trillions of dollars.

“The fine print — including how much will go into the fund and who will contribute — will have to be discussed at next year’s conference,” adds nature.com.

Underreporting of GHG emissions

Former Vice President Al Gore’s Climate TRACE coalition released a troubling report at COP27 that found severe underreporting of GHG emissions from several countries, The Hill notes.

“The coalition’s data was gathered by over 300 satellites and is now available online to ensure the public can see which countries and companies have been under-reporting their emissions to the UN climate treaty organization,” continues The Hill. “The coalition found that oil and gas operations make up over half of the biggest sources of greenhouse gas emissions globally and are about three times higher than what their producers claim. And the [United States] was one of the top 10 oil and gas production and transport emitters last year along with China, Canada, Iran, Algeria, Turkmenistan, Iraq, Qatar and Saudi Arabia.”

U.S. announcements

During COP27, Kerry announced the Energy Transition Accelerator, which is “a public-private partnership aimed at developing carbon markets to transition developing nations off fossil fuels with private funds,” The Hill continues.

“Kerry, who has frequently spoken of the need for private-sector cooperation on decarbonization goals, said the initiative could start a snowball effect by convincing other sources of money of the opportunities presented by transition,” adds The Hill. “Another possibility, he said, is allowing companies involved in the program to use a limited amount of credits toward their own short-term emission-reductions targets. ‘And companies would acquire additional credits to go above and beyond their targets – achieving a greater overall level of emission reduction,’ he added.”

Carbon markets are controversial. Opponents criticize this approach, stating they do not fulfill climate goals, they undermine human rights, and they cause harm to communities.

“Many at COP27 expressed skepticism over the potential positive impact of Kerry’s plan,” The Hill notes. “Carbon credits are a controversial tactic in the battle against climate change with many environmentalists arguing they are just ‘greenwashing.’ Instead, activists argue the plan will delay any real progress on decreasing greenhouse gas emissions and that corporations should focus on lowering their carbon pollution.”

The United States made several additional announcements at the conference, including:

  • New actions that would make the United States the first national government to require major suppliers to set Paris Agreement-aligned emissions reduction goals, leveraging the federal government’s over $630 billion in annual purchasing power;
  • Updating the U.S. Methane Emissions Reduction Action Plan to include $20 billion of new investments to reduce methane emissions from the Bipartisan Infrastructure Law, the Inflation Reduction Act, and annual appropriations;
  • Strengthening proposed domestic methane standards in the oil and gas sector that would reduce wasted energy and harmful emissions from covered sources by 87 percent below 2005 levels;
  • Doubling the U.S. pledge to the Adaptation Fund to $100 million and announcing over $150 million in new support to accelerate the President’s Emergency Plan for Adaptation and Resilience (PREPARE) efforts across Africa;
  • Launching a new initiative to support Egypt in deploying 10 gigawatts (GW) of new wind and solar energy while decommissioning 5 GW of inefficient natural gas generation;
  • A contribution of $5 million to the Migration Multi-Partner Trust Fund to support climate-affected vulnerable migrants;
  • Germany and the United States announced over $250 million in resources to unlock $10 billion in commercial investment to support Egypt’s clean energy economy; and
  • Launching a Green Shipping Challenge that includes three new bilateral work streams focused on facilitating green shipping corridors with the Republic of Korea, Canada, and the United Kingdom; the development of a U.S. maritime decarbonization strategy; and the launch of a Green Shipping Corridors Initiation Project, with $1.5 million, subject to Congressional notification and the completion of domestic procedures, to support feasibility studies for green shipping corridors involving developing countries.

China and United States resume climate discussions

With the two countries accounting for 50 percent of global GHG emissions, worldwide progress on climate change requires cooperation between the United States and China. The mutual agreement and commitment by both countries was a critical factor in the adoption of the Paris Agreement in 2015.

However, the relationship between the two countries has gone downhill since the agreement was signed. Discussions between the two countries came to a halt after House speaker Nancy Pelosi visited Taiwan in 2022.

The Taiwanese situation carries some similarities to the contention between Ukraine and Russia. Taiwan is self-governing and believes it should be an independent nation. However, China views the island as part of its country. Foreign diplomatic visits to Taiwan are viewed as hostile to China and are seen as “legitimizing the movement for Taiwan’s independence,” The Washington Post says. China retaliated against Pelosi’s visit by pausing climate discussions with the United States.

During COP27, President Joe Biden and Chinese leader Xi Jinping met, which signaled the resumption of diplomatic negotiations regarding climate change between the two countries.

“Special Presidential Envoy for Climate John Kerry quickly jumped on this chance to engage with his Chinese counterparts, with whom he has long relationships,” says the Unites States Institute of Peace (USIP). “The re-establishment of talks provides an opening for future cooperation on climate change on the global stage.

“Despite this progress, there are increasing questions about what U.S.-China climate cooperation will look like moving forward. While China has moved aggressively on domestic policy in some climate-related areas and has positioned itself as a global leader on green technologies, it has also been hesitant to strengthen its international commitments. It is unclear how much China seeks to become a global leader on climate change and to use its international relationships to support global progress. The U.S.-China relationship on climate change will continue to be an important opportunity for collaboration between the two countries. But it is also likely that the [United States] will need to seek out and strengthen other partnerships to support climate progress.”

Progress toward a combined worldwide commitment to reduce GHG emissions and global warming will continue. Much of the actual negotiations and agreements reached seem to occur outside formal COP conferences. The process toward reaching these agreements moves at a glacial pace, which is often frustrating for those looking at it from the outside. The question remains: Will world governments take timely, meaningful, and concerted actions to address the climate crisis?