COP27 and the climate money rich countries are reluctant to grant

Financial aid to the countries most vulnerable to climate change and compensation for loss and damage suffered due to rising temperatures will be among the topics of the United Nations Climate Conference (COP27) in Sharm El Sheikh, Egypt.

Switzerland calls for increased investment in climate protection and requests that countries that can do so provide their support.

We have to find an original and acceptable way to financially help countries that are suffering. [por el cambio climático]Wael Aboulmagd, Egypt’s special representative for the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27external link), to be held from 6 to 18 November in Sharm El Sheikh, said in late September.

This year the Convention will bring together some 90 heads of state and government and should allow progress “from promises to deeds,” according to Aboulmagd. Between states’ climate action and what would be needed to comply with the Paris Climate Agreement and limit global warming to 1.5°C, there remains “a huge gap,” he said.

Greenhouse gas emissions continue to rise, and the impacts of global warming on populations and the environment are becoming more obvious. The floods that left a third of Pakistan’s territory underwater in August and Europe’s hottest and driest summer in 500 years, to name two points, have once again highlighted the urgency of coordinated global action.

However, keeping promises and cooperating has become more difficult at a time marked by the war in Ukraine, the energy crisis and tensions between the United States and China, the world’s top two_CO2 emitters. Declining Russian gas supplies have prompted several countries, including Switzerland, to review their energy supplies. The global consensus around the “phasing-out” of coal, reached during last year’s climate conference in Glasgow, is no longer so strong.

What will be discussed at COP27?

Sharm El Sheikh will discuss the implementation of the Paris Climate Agreement and how emissions reduction targets will be met. The rules of the mechanism that allows countries to achieve their objectives by financing climate protection projects abroad will also be discussed.

Last year, states pledged to improve their climate ambition and increase their “National Determination Contributions” (NDCs) every year, rather than every five years as originally planned. However, only 23 of the nearly 200 countries have submitted updated reduction targets for 2030 by the UN deadline (23 September).

The current decarbonization commitments made by the signatory countries of the Paris Agreement will lead to warming of 2.5°C by the end of the century, according to the latest report of the climate agency published a few days before COP27.

The COP27 agenda will also address the issue of gas – African countries are betting on fossil fuels External link for the continent’s economic development – and climate finance, that is, the financial means to help the poorest and most vulnerable states face climate change. Among the most intricate issues is compensation for loss and damage caused by global warming.

What are richer countries doing?

In 2009, industrialized countries agreed to allocate $100 billion a year until 2020 to finance projects to reduce emissions and adapt to climate in developing countries. The target has not been met: funding allocated to the most vulnerable states was €83.3 billion in 2020, according to the latest survey by the Organisation for Economic Co-operation and Development (OECD).

Last year, at the end of COP26, richer countries pledged to double their financial contributions for adaptation measures. So far, most investments have been directed towards climate change mitigation, i.e. reducing emissions, when the most affected countries are those most in need of adaptation. Pakistan, for example, would need flood protection measures more urgently than solar power plants.

What are the poorest countries asking for?

First, keep the promise of $100 billion a year. Meanwhile, the target has been moved to 2023. They also call for an additional funding mechanism, focusing exclusively on compensation for damage and losses caused by sea-level rise or extreme weather events, such as floods or typhoons.

Countries of the South are the least responsible for global emissions: Africa generates less than 4% of global emissions. However, they are the ones who pay the highest price, both in terms of financial losses and human lives. Therefore, they expect some kind of compensation.

The United States and the European Union have already opposed the request to create a compensation fund for the countries of the South. COP27 may address a different idea: compensating developing countries through a new global tax on fossil fuels.

What priorities does Switzerland have?

Switzerland will endeavour to ensure that States take concrete decisions on climate protection. “The priority is not to lose sight of the 1.5°C target,” says Franz Perrez, Switzerland’s chief negotiator at COP27. To this end, he explains, it will be essential to adopt a work program on mitigation, as has been done for adaptation. “We want to create a space in which countries do not limit themselves to exchanging experiences, but seek solutions to increase their emission reduction targets, also in cooperation with the private sector,” says Perrez.

The Swiss delegation will also work to increase investment in climate protection worldwide. The aim is to formulate a new funding target for the post-2025 period. All countries that are in a position to do so should give their support, says Perrez. We are of the opinion that a state with a lot of capacity [Producto Interior Bruto] should help the poorest, regardless of whether it is an industrialized country or not,” he says.

The issue of loss and damage must be fully recognized, Perrez adds. At the moment, however, Switzerland has many reservations about setting up a specific fund, as advocated by some NGOs, because there is still no agreement on who will participate in it and how it will be used. “Such a fund should give priority to the poorest and most vulnerable countries, but there is still no agreement on this point. In addition, it will be years before it is operational. For now, it’s not a solution,” Perrez says. Switzerland prefers to delve into the issue of loss and damage and assess possible options within the framework of the so-called ‘Glasgow Dialogue’, which will last until 2024.

What is Switzerland’s financial contribution?

The Government believes that Switzerland should contribute between $450 million and $600 million (public funds and private investments) to the target of $100 billion for developing countries. The figure takes into account Switzerland’s economic capacity and emissions, according to the Federal Office for the Environment.

In 2020, Swiss funding amounted to 659 million Swiss francs (about $662 million), an amount that, although higher than expected, is considered insufficient by NGOs such as Alliance Sud, which claim a contribution of 1 billion francs.

Source: Swissinfo