The COP27 climate summit ended on November 20, lasting 1.5 days longer than expected. This year's meeting will be remembered for the agreement to set up a loss and damage fund to support poorer countries being ravaged by climate impacts, a step largely meant to soothe the climate community’s anger at the lack of progress on raising ambitions for reducing emissions and mobilizing climate finance. Ukraine had been actively represented at the Summit, had its own pavilion (for the first time ever), and included the issue of Russian aggression on the climate agenda.
СОР27: One Step Forward or Two Steps Back?
To better understand the context and vocabulary, please see the analysis of expectations written prior to COP27
“Indeed, many of today’s conflicts are linked with growing climate chaos. The war in Ukraine has exposed the profound risks of our fossil fuel addiction.”
U.N. Secretary-General Antonio Guterres
The agreement to set up a loss and damage fund to support poorer countries being ravaged by climate impacts, which the public and the most vulnerable nations had been pressing for decades, was the only thing that saved the COP27 from totally failing to meet expectations. The rest of the issues had seen either lack of any progress, or even regress: the final resolution downplayed the significance of the goal of keeping global temperatures from rising more than 1.5°C [2.7°F] above preindustrial levels, copy-pasted the part on “phase down of coal” from COP26 resolution instead of phasing it out, and failed to mention other types of fossil fuels. The lack of plans to strengthen climate action plans and the risk of double counting the same emissions units also cause concerns from the climate community.
The 2021 negotiations in Glasgow resulted in parties agreeing to concentrate on the “lower bound” of the Paris Agreement, namely on keeping global temperatures from rising more than 1.5°C above preindustrial levels until the end of the century, as “the upper (tolerable) limit”, i.e. warming by 2°C, would lead to much greater losses and threats. Prior to meeting at COP27, countries were expected to update their emission reduction goals, putting the world back on a safer warming trajectory. Only a small fraction of the nearly 200 parties did so. The COP27 resolution downplays the importance of the 1.5°C goal: while the Glasgow Pact mentions the 1.5°C goal in the “emissions reduction” section, the COP27 resolution moved it to the “science” section.
Some of the language on mitigation heavily mentioned a weaker 2°C goal, trying to railroad it into the text. Moreover, the final hours of the negotiations resulted in the provision on emissions peak before 2025 being removed from the final resolution. In his closing address, a visibly frustrated Alok Sharma, architect of the Glasgow Climate Pact, told the summit, “We had to fight relentlessly to hold the line of Glasgow. […] We joined with many parties to propose a number of measures that would have contributed to this. Emissions peaking before 2025, as the science tells us is necessary? Not in this text.”
Despite the organizers calling this summit an important opportunity for Africa specifically, adaptation to climate change was largely overshadowed by the discussion of loss and damage compensation and curbing emissions. According to the UNEP Adaptation Gap Report 2022, international adaptation finance flows to developing countries are 5-10 times below estimated needs. Estimated annual adaptation needs are USD 160-340 billion by 2030. Given that combined adaptation and mitigation finance flows still fell short of the USD 100 billion pledged to developing countries, the current pace of reaching an agreement on goals and their implementation makes getting adequate funding for adaptation measures unlikely.
Inclusion in the Glasgow Climate Pact an unprecedented goal for developed countries to double the funding provided to developing countries for adaptation by 2025 was a significant step, however, the COP27 resolution failed to give this goal a concrete meaning, leaving doubts about the likelihood of its implementation. Governments agreeing on the way to move forward on the Global Goal on Adaptation, which will conclude at COP28, was difficult, still, they managed to agree upon a framework for the goal and link its elements with conclusions of IPCC reports.
In a situation where carbon emissions from fossil fuels can hit record high, COP27 failed to incorporate the provision on phasing down (or out) all fossil fuels in the final text. India, the EU, and other countries were pushing hard to include those provisions, while Russia, Iran, and Saudi Arabia strongly opposed them. Intentions to reduce coal use have remained unchanged and had not been molded into the “opt-out” that climate science called for. The new language including “low emissions” energy alongside renewables as the energy sources of the future is a significant loophole, as the undefined term could be used to justify new fossil fuel development, investments in nuclear energy, or carbon capture projects. Perhaps that had something to do with the presence of 600 fossil fuel lobbyists. Some African countries are interested in developing their gas extraction, in particular, to provide alternatives to Russian natural gas for Europe, causing uproar from civil society, specifically in those countries.
As the UAE, one of the world’s largest oil exporters is to host the next climate talks, breakthrough solutions on fossil fuels are not to be expected there as well.
One alternative solution to failure to reach an agreement on phasing out fossil fuels can be countries assuming voluntary obligations. Costa Rica and Denmark created the Beyond Oil & Gas Alliance (BOGA) at COP26 and were joined by Portugal, Chile, Fiji, and Washington State (USA) at this year’s summit. Besides, at COP27, Tuvalu became the first country to join the Fossil Fuel Non-Proliferation Treaty, another voluntary commitment promoted by NGOs. The progress of such a Treaty is important for Ukraine and our national security, as decreasing the world’s demand for fossil fuels will affect Russia’s ability to find replacements for the European markets they had lost, and therefore, to receive more funding for the war.
The failure of developed countries to fulfill their pledge of USD 100 billion in annual climate finance undermines confidence in the negotiation process. It is against that backdrop that at COP27, deliberations continued on setting a new collective quantified goal on climate finance to be met by 2025 in place of the unfulfilled one. A UN report published during the negotiations estimates that around USD 1.2 trillion per year of external finance will be required by developing countries by 2030 to meet the scale of the investment needs. The answer to the question “what exactly counts as climate finance” is controversial for different countries, and developed countries would rather not adopt a specific definition. This allows every nation to choose a convenient form of financing independently, without any restrictions.
COP27 initiated Just energy transition partnerships (JETPs) play an important role in financing the transition to renewable energy for some coal-dependent countries. One such partnership will provide Indonesia with USD 20 billion from G20 counties. A similar funding of USD 8.5 billion had been agreed upon for South Africa at COP26, however, most of it was loans.
The outcome of the negotiations calls for the reform of the system of international financial organizations and banks, which would meet the challenges of climate change. Barbados, supported by France, Brazil, and the EU, proposed the Bridgetown Agenda containing a list of actions to reform MFIs, which includes raising reconstruction grants (in place of loans) for any climate-vulnerable country. More concrete reform proposals are to be presented in February at the spring meetings of the IMF and the World Bank. If implemented successfully, such change in MFI work approaches will have a cascading effect on the entire global financial system, because its current inconsistency with climate challenges is precisely the reason behind obtaining loans for fossil fuel technologies.
The Global Shield insurance initiative, officially presented at COP27, provides for EUR 210 million of speedy financing to be received by countries affected by natural disasters.
The operation of carbon markets makes one of the most interesting topics for Ukraine, financially speaking. For us, this is the most promising opportunity to receive funding for the development of clean technologies. Article 6 of the Paris Agreement clarifies how international carbon markets involving governments should function, Paris Rulebook, concurred in Glasgow, was designed to help countries navigate the process. What was expected of COP27 was just some technical solutions and further specifications of operating instructions.
While Article 6.2 of the Paris Agreement allows internationally transferred mitigation outcomes (ITMOs), COP27 Guidance on cooperative approaches referred to in that article allows each country to decide whether they would disclose information about the Party’s participation in cooperative approaches to the general public. While a participating Party that identifies the information as confidential should still provide the basis for protecting such information, this provision still leaves room for manipulations that jeopardize delivering on objectives of the Paris Agreement. The predecessor of Article 6, the Kyoto Protocol, failed to reduce any emissions at all. Based on the abovementioned Guidance, Ukraine can start preparing to negotiate on the possible generation of emissions reduction units with the countries that are to finance the “green recovery”. This is likely to help attract more investment. Switzerland, for instance, is already planning projects on transport electrification in some African countries under a new carbon market mechanism.
Article 6.4 establishes the new carbon market, creating the basis for trading in carbon offsets from emissions reductions generated through specific projects. Such offsets are known as Article 6.4 Emissions Reductions (A6.4ER) and are meant to meet national climate goals or for other regulatory purposes.
COP27 negotiations also resulted in including the definition of carbon removals. In the future, removal projects could also generate removal units, so the crucial thing is to define what is considered acceptable and what is not. For a long time, the draft decision included ocean geoengineering and other dubious activities that could lead to negative consequences for ecosystems and communities. However, this draft decision was not approved at COP27 and was returned for revision.
Another controversial issue concerning A6.4ER reduction units traded without authorization for further use by the regulatory requirements of buyers. Those “unauthorized” reduction units were introduced back at COP26 but were not clearly defined or limited. COP26 participants agreed that each party participating in projects related to the use of ITMOs toward its NDC provides information about the emission balance with appropriate adjustments to ensure the avoidance of double counting of any reductions. Noteworthy, still, is the fact that unauthorized reduction units were implicitly excluded from this requirement, leaving the door open for the host country and buyers to “double count” any carbon reduction. While COP27 failed to eliminate this possibility, such reduction units will not be called “emissions reductions” but “mitigations contribution emission reductions” and should only be used to achieve the country’s NDCs.
Article 6.8 refers to non-market approaches, i.e. all other ways of obtaining financing for projects related to emission reduction. COP27 proceeded with the work on matters relating to the work program under the framework for such approaches, reviewed existing examples, and agreed on a schedule for implementing the activities for the next two years.
The future "Green Recovery" will open opportunities for many projects that can get funding within the framework of Article 6. To join, Ukrainian stakeholders should build capacity for participation in them.
Losses, Damages, and Trust
Creating a compensation mechanism for losses and damages (in other words, climate reparations) was unlikely, although expected, achievement of the COP27. Both the most vulnerable countries and the overall civil society spent many consecutive years demanding that from developed countries. The complexity of the compromise is due to the different expectations of the Group of Twenty (G20) countries about who should pay for damages and how much. COP27 was the first negotiation to address this issue as part of the main agenda.
The agreed-upon fund has no specific goal regarding the amount of funds mobilized and accepts voluntary contributions, which can potentially make billions in USD. However, given the several-year delay in reaching the goal of USD 100 billion in climate finance, it will take a lot of diplomatic pressure for the fund to deliver effective assistance. COP27 resolution outlines the scope of the fund's work and management structure; it will take several more years to go through specifics and start operation. In addition, COP27 helped raise EUR 340 million for loss and damage compensations, with the majority of those funds raised through the Global Shield initiative.
When it comes to trust, the distinction between “developed” and “developing” countries, introduced by the UNFCCC in 1992, is one growing problem. While China, India, and the UAE belong to the second group, they, for one thing, are quite powerful economies by now, and for the other, they have caused a significant amount of emissions and must bear responsibility for them. At the same time, China believes that it is “developed countries” like the EU, the USA, and Canada that have had to take responsibility for their own emissions ever since the industrial revolution. At the end of the day, it's all about money, and about who should pay for the damage already done and avoiding future damage. Achieving climate goals is unlikely without the cooperation of the biggest polluters, China and the United States. Therefore, them resuming dialogue against the background of geopolitical competition is a positive step.
Each year, a growing number of companies, cities, and other non-State actors are pledging to be carbon-free. At COP26, a special commission was appointed to assess the “strength” of such pledges. A report published by COP27 revealed dishonesty and “greenwashing” of a number of organizations that claimed “zero emissions”. A Report from the UN high-level expert group on the net zero emissions commitments for non-state entities offers a how-to guide to ensure credible, accountable net-zero pledges for non-State actors so that those pledges had some real background of emissions reduction. The International Organization for Standardization is to launch a set of guidelines to help stakeholder organizations construct net-zero emission plans. Ukrainian cities and interested organizations should check those guidelines out in order to be ready to comply with them.
During COP27 negotiations, 26 countries launched the Forest and Climate Leaders’ Partnership (FCLP), aiming to halt and reverse deforestation and land degradation by 2030. A similar partnership was also created at COP26.
41 NGOs from Asia, Africa, and Latin America had formed an alliance demanding that governments increase climate financing for local women's movements.
The Conference considered farming-related issues from two aspects: 1) reducing the environmental impact of farming and emissions from agricultural lands; 2) food security in connection with the deterioration of climatic conditions. At the suggestion of the USA and the UAE, a number of countries agreed to allocate USD 8 billion to research and development projects aimed at reducing the impact of farming on the climate. The UN Food and Agriculture Organization (FAO) announced outlining a roadmap to help food systems adapt to the provisions of the Paris Agreement, while considering food security risks, before COP28.
In the climate negotiation process, food issues were handled within the Koronivia platform (Koronivia joint work on agriculture), which was given another four-year lease of life at COP27. 15% of global emissions are generated in the agriculture and food sector. While European countries already have established policies such as Farm to fork, aimed at more sustainable food production, less developed countries lack sufficient funds to do this, as climate-neutral food cultivation is more expensive. In their submissions ahead of COP27, parties were divided about the new Koronivia operation plan, and, according to subsidiary body chairs, agriculture “took more meeting time than any other item at COP27”. The topic of food systems is to be raised in negotiations more often, with increasingly stringent requirements for agriculture. This is something Ukraine should consider while producing development strategies for agriculture and food production since food exports have a significant share in the country’s trade balance.
While the issue of war in Ukraine was not negotiated, it created both background and context for those negotiations. In particular, the question that had been debated a lot was how strongly the Russian aggression jeopardized the energy transition, with Russia trying to resort to manipulation that it was the sanctions that supposedly prevented it from reducing emissions. In their speeches, diplomats frequently referred to the war as a factor of instability exacerbating climate threats. Global Media quoted Volodymyr Zelenskyy’s speech presented during the negotiations, on effective climate policy and emissions reduction being impossible due to the war. On the other hand, “green recovery” and related plans can offer an impetus for the introduction of low-emission technologies.
Ukraine’s Role at СОР27
It is the COP27 that is to be remembered as a significant milestone of Ukraine’s participation in international climate negotiations within the framework of the UN FCCC, as Ukraine, for the first time ever, had its own pavilion, while Russia, which used to have significant visual representation at such summits, on the contrary, had no visual representation in the exhibition area.
Having such space at Ukraine’s disposal offered not only a chance to draw the attention of the global climate community to Ukraine and Russia's invasion of it (while that was the main theme in the pavilion’s visual design), but also a fixed go-to location for journalists, specifically from top media outlets such as The New York Times, The Guardian, etc., and a space for meetings and events, which contributed, in particular, to better cooperation and communication amongst the Ukrainian delegates who came to Egypt representing different sectors (public, governmental, business, and international support). Noteworthy, this year, the number of events with members of the Ukrainian public involved was unprecedented. The reasons for that included both the Ukrainian pavilion’s event program (mostly put together by NGOs) and the efforts of friendly nations, such as Germany or the Nordic States, to put Ukraine and the impact of the Russian aggression on global energy crisis on their pavilions’ respective agendas. Ukrainian Climate Network a detailed review of the events of the Ukrainian pavilion (in Ukrainian).
When listing Ukraine’s achievements at COP27, it is worth mentioning that along with the classic promotion of the inadmissibility of Russia's inclusion of emissions in the occupied territories of Ukraine in its own reports and inventories, the Ukrainian government delegation invested heavily in stressing the need to account for greenhouse gas emissions and damage to the environment resulting from Russia's military aggression, and to hold that country responsible, in particular, by imposing environmental and climate "reparations". Notably, preliminary assessments of climate damages were presented during an official side event “Greenhouse gas emissions from the military and armed conflicts and their treatment under the UNFCCC". Besides, the Minister of Environmental Protection and Natural Resources of Ukraine, during his stay on the premises of COP27, announced the Ukrainian official initiative to launch the Global Platform for the Assessment of Environmental Damages Caused by Wars.
Among the Minister’s other statements, quite notable is another initiative of creating “Green Grain Corridors” and “the Climate Office”. However, it is worth noting that the climate community has questions about the lack of detailed information regarding the implementation of those plans, how they were received, and the countries that have already joined or are planning to join the abovementioned initiatives. The need of reducing the gap between the announced plans and their implementation is woven through the entire COP27 and also applies to the international initiatives announced by the Ukrainian side.
Another concern-raising aspect during COP27 was fossil fuel lobbyists flooding crucial climate talks. The Ukrainian delegation, too, included deputies from both energy business (with DTEK as one of the partners of the Ukrainian pavilion) and NJSC "Naftogaz", authorized to represent Ukraine in official negotiation meetings.
Another note regarding the participation of the Ukrainian party in climate negotiations is the need to account for the location and the context. COP27 in Egypt was supposed to be predominantly “African”, a fact that had been repeatedly emphasized by both organizers and participants, highlighting that attention should be paid to developing countries that are most vulnerable to climate change (many of those countries are located on the African continent).
With nations competing for climate funding, and existing or potential consequences of climate change for a specific territory being an indicator, Ukraine risks being at a disadvantage when assuming a victimized position, for, in the eyes of the global climate community, Ukraine is an industrial state also bearing responsibility for climate change while being less vulnerable to its consequences. Thus, to influence the negotiation processes and become an actor in climate diplomacy, Ukraine must take a proactive position, demonstrating its readiness to become a leader in the fight against climate change, specifically through “green recovery”. By demonstrating determination and taking steps in the required direction, the State will be better equipped to join the negotiations not in a position of asking, but of laying down conditions. This year's climate summit has seen some progress in that, with Ukraine’s statements on the need for climate financing being perceived not as a demand, but rather as an offer for cooperation.
At the same time, to further develop the potential acquired during COP27 and implement the announced initiatives, Ukraine needs to build the capacity of a climate diplomacy institution. This year, Ukraine presented a very small group of negotiators on its behalf (up to 10 persons), which is crucially insufficient for covering various negotiation processes that are taking place simultaneously. This was partly due to the staff reduction in the Ministry in 2022, which lead to shortages in climate policymakers. Another issue is the low priority of the climate change issues in Ukraine’s international relations, while to many large economies, the issue of climate change itself is becoming a policy-forming part of international relations. For instance, the Ministers/Secretaries of foreign affairs of Germany, France, Argentina, and Egypt made sure to join the negotiations in person.