COP27: Unexpected outcomes

Jabal Mousa, aka Mount Sinai, where Moses received the ten commandments, is about 80 km from the Egyptian resort town of Sharm El-Sheikh, the venue of the just-concluded CoP-27 conference of the UN Framework Convention on Climate Change (UNFCCC). While the venue’s historical significance may not have dawned on all the delegates of the 190 participating countries, they did act on an important biblical commandment – ‘Do not withhold good from those who deserve it when it’s in your power to help them (Proverbs 3:27)’.

CoP-27 did not start with great expectations. Till the last day of the conference, most people believed this would be an inconsequential meeting. But eventually, it has achieved outcomes that will have far-reaching implications for international climate collaboration.

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Firstly, it got developed countries to agree on something they had refused for decades – to pay for climate disasters in developing countries.

One of the key demands of the Least Developed Countries (LDCs) and small island-nations at CoP-27 was to set up a ‘Loss and Damage (L&D)’ fund. This is because these countries have contributed the least to global warming but are now suffering losses in billions of dollars each year. For instance, the cost of the recent floods in Pakistan was estimated to be over $46 billion – 13.25% of the country’s GDP.

The loss and damage negotiations were highly acrimonious, with the US entirely against any deal that would expose it to unlimited liability for its historic contribution to the climate crisis. The talks also got into the question of who should pay, with small island-nations demanding that India and China also contribute to the fund as they are now big climate polluters.

It took 36 hours after the official conference closing time for parties to agree to a new funding window for L&D. But there are many caveats attached to the fund. For instance, the fund will only support countries most vulnerable to climate change (which might not include India), and funding will not come only from developed countries but from a “mosaic” of sources, including the private sector and philanthropies.

Considering that wealthy countries have consistently reneged on their financial commitments, one is sceptical of this fund’s usefulness in helping the most-vulnerable. Nevertheless, it is a big deal that the principle of compensating countries for climate disasters has been recognised for the first time. From now on, the big polluters will be morally, if not legally, liable for climate disasters.

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Second, CoP-27 also negotiated something that no other climate conference had done earlier: Phasing out all fossil fuels. It is tragic but a reality that it has taken 30 years for countries to realise that phasing down and ultimately phasing out all fossil fuels is the most essential factor in limiting global warming. And it is to the credit of India that this discussion took place.

Last year, at Glasgow, while countries agreed to phase-down coal to limit global warming, they kept silent on oil and gas due to pressure from big oil and gas-dependent economies, including the US, the EU and Saudi Arabia. But all climate studies indicate that controlling global warming requires reducing all fossil fuels, not just coal. India made this point forcefully and got the support of nearly 80 countries, including the US and EU. Unfortunately, Saudi Arabia again vehemently opposed the inclusion of oil and gas, and therefore it was not included in the final decision. Nevertheless, Sharm El-Sheikh has set in motion the debate on phasing out all fossil fuels, and it is a matter of time before this is accepted by a future CoP.

Thirdly, a ‘just transition’ – planning a socio-economic transition for phasing down fossil fuels -- has emerged as an essential pivot to reduce emissions from developing countries. Mid-way through the CoP talks, a $20 billion deal was struck between Indonesia and the G-7 countries at the G-20 meeting in Bali to phase-down coal use in Indonesia in a just manner. Called the Just Energy Transition Partnership (JET-P), a similar deal worth $8.5 billion was signed between South Africa and the G-7 last year. A JET-P deal was offered to India, which it rightly postponed for future negotiations.

Taking a cue from JET-P, at CoP-27, countries have agreed to establish a work programme for a possible future agreement to scale-up support for just transitions in other developing countries. It looks like the future financial deal between the developed and developing countries would be through just transition partnerships.

Lastly, CoP-27 has unravelled the traditional classification of developed and developing countries as outlined in the 1992 convention. The question of who should pay for L&D brought focus to China, the largest current emitter and the second-largest historical emitter of greenhouse gases. The fact that China is putting billions into the Belt and Road Initiative but prefers to be called a developing country in climate negotiations was questioned by many countries. The same applied to newly wealthy countries like Saudi Arabia, South Korea and Singapore. The developed countries always wanted to upend the classification; at CoP-27, they got the support of the island-nations and LDCs to do so. While the final text has not clearly mentioned a more prominent role for emerging economies, it is clear that from now on, countries like China will find it challenging to avoid greater responsibility for the climate crisis. There will also be pressure on India to contribute more, as it is traditionally bracketed with China at the UNFCCC.

A change in direction

In totality, the outcome of CoP-27 is not so much in words as it is in the change in direction of the international negotiations. For India, it is critical to recognise these decisive shifts. Overall, India did quite well at Sharm El-Sheikh by proposing the phasing-down of all fossils, supporting other developing countries on L&D, and releasing its Long-Term Low Emission Development Strategy. But now is the time for the government to relook at the negotiating strategy to advance the nation’s development and climate agenda together.

(The writer is founder-CEO, iFOREST)