A major salvo from the US, debates aplenty and late negotiations
Observations and top stories from the first week of COP27
Just like that, we are already one week into the most important climate summit of the year. There was speculation things would be quieter in comparison to Glasgow, but that hasn’t been the case.
Thousands have descended upon Egypt, so much so that some are having problems finding food, water and fast Wi-Fi. Oil and gas lobbyists are there in droves. Nancy Pelosi is talking about Republicans believing climate change is a hoax; Boris Johnson is telling everyone that the UK can’t pay reparations to developing nations as part of loss & damage funding.
We’ve gone through the many stories written about the climate, green finance and sustainability in the last week to pull through some common threads. We’re also sharing 10 stories we think are particularly worth noting.
A major salvo from the United States. Climate Envoy John Kerry announced the “Energy Transition Accelerator” framework to expand the sale of carbon credits in developing nations. Many were skeptical of the big money backing including the Bezos Earth Fund and the Rockefeller Foundation. The Voluntary Carbon Markets Integrity Initiative called it a “massive distraction”. Yet some feel it could unlock needed investment in renewable energy networks.
Debates aplenty. The first week has been defined by debate on carbon markets, emissions reduction, sector specific decarbonization pathways, and loss and damage funding. There’s been some fiery rhetoric, but now we need plans for action – something Charlie Morrow wrote about in Communicate Magazine.
Late breaking negotiations. It’s unclear if there will be legally binding decisions and resolutions that build on the Paris accord. Last year there were months of conversations (as Carbon Brief deputy editor Simon Evans points out) but this week discussions will only begin on Saturday.
We are halfway through the conference and much is uncertain. We’ll be back with another roundup after next week – the agenda includes Adaptations & Agriculture; Gender; Water; Civil Society; Energy; Biodiversity along with a much needed focus on solutions.
Carbon markets
To drive the transition to a net-zero economy, global securities regulators propose closer scrutiny of carbon trading to deepen liquidity and prevent greenwashing in markets used by companies to offset their emissions.
- Financial Times: US coal phaseout plan meets divided response at COP27
The US proposal to finance the phaseout of coal power with renewable energy within the developing world, unveiled by climate envoy John Kerry, has triggered a deeply divided response. The proposal comes after countries attempt to fund the transition to clean energy as developing nations seek compensation from developed countries. However, senior European officials highlight the massive concerns surrounding the lack of regulations within the carbon credit markets with some deeming it a false solution.
- ESG Clarity: IOSCO launches consultation on carbon markets
The International Organization of Securities Commissions (IOSCO) has launched a consultation on compliance carbon markets and for enhancing the resilience and integrity of voluntary carbon markets.
Emissions Cuts
- Financial Times: UN urges Mark Carney-led climate initiative to meet higher standards
A UN report into corporate greenwashing found that financial institutions are among the private sector climate initiatives that must maintain tighter standards. Former Bank of England governor Mark Carney’s “net zero” coalition of more than 500 financial institutions is found to be incompatible with the sector’s continued investment in fossil fuels.
In an op-ed from founder Michael Bloomberg, he argues that businesses and investors are unable to act on the opportunities that the clean-energy transition presents due to a lack of data. Greater data transparency and accountability to carbon markets will attract more capital to projects that cut emissions.
Loss & Damage Funding
Using their speeches on Tuesday at the COP27 climate summit, leaders from poor countries criticized wealthy governments and oil companies for driving global warming and demand that they compensate for the damages being inflicted on their economies.
- Financial Times: African leaders have run out of patience
Against a backdrop of devastating droughts in the east and deadly floods in the west and centre, powerful interventions were made by global south leaders as they seek greater financial compensation from the west.
World Bank Managing Director of Operations, Axel Van Trotsenburg spoke amid growing criticism of the bank's efforts to mobilise sufficient support for developing countries shift towards clean energy. The world’s largest multi-lateral lender requires further funds from wealthy donor countries such as the United States, Britain and Germany.
Regulation
The sustainability standard setter chief Emmanuel Faber is hopeful about reaching a "big milestone" towards aligning the European Union's corporate disclosures with his board's global norms. Global regulators have called on the EU and ISSB to make their climate disclosures compatible to avoid competing norms which confuse cross-border investors.
A UN group set up to crack down on the greenwashing of net zero pledges by industry and government has called for “red lines” to stop support for new fossil fuel exploration and overuse of carbon offsets.
Charlie Morrow is a director in London and the head of Cognito's Sustainability Practice