As ever, the United Nations COP series of climate conferences is proving inspiring and exasperating in equal measure. Here’s the lowdown from week one of COP27.
Strong Fossil Lobby
Both The BBC and The Guardian have reported a sharp rise in fossil fuel industry delegates at the summit. The Guardian said there are 636 lobbyists from the oil and gas industries registered to attend the UN event in Sharm el-Sheikh, Egypt.
At Glasgow, the figure was 503, which outnumbered the delegation of any single country. This year the only country with a larger delegation is the United Arab Emirates, host of COP28 next year, which has 1,070 registered delegates, up from 176 last year.
The BBC noted that more than 600 people at the talks in Egypt are linked to fossil fuels; that’s more than the combined delegations from the ten most climate-impacted countries.
These delegates could be working on the Net Zero transition to greener business, or they could be there to stymie progress on divestment or exit strategies from legacy fossil energy. The answers will come soon, but the unprecedented numbers hint something is at stake; for good or bad.
Talk on the Sidelines
Often, the main stages at COP events aren’t necessarily the scene of the action. Reuters reports the UN food agency aims to launch a plan within the year to make the world’s food system more sustainable, a senior executive told Reuters on the sidelines of the COP27 climate talks.
The plan would show how the food industry and farming can align with the world’s goal of capping global warming at 1.5 degrees Celsius, Food and Agriculture Organization Deputy Director Zitouni Ould-Dada said.
The hope is that such a plan would act in a similar way to the release of a report for the energy sector by the International Energy Agency, which spurred investment into companies, projects and technologies aligned with the plan.
Reuters notes that more than forty investors managing a combined $18 trillion urged the UN food agency in June to create a plan to curb emissions in the sector, often overlooked in global warming debates yet one of the biggest sources of climate-damaging emissions.
As Russia’s invasion of Ukraine has driven a surge in food prices globally, compounding the food insecurity caused by climate change, delegates at the conference are more open to discussing the issue, Ould-Dada said.
“There has never been this much attention to food and agriculture anytime before. This COP is definitely the one.” So, trillions might soon be to hand for businesses looking to get involved in food that’s not only greener, but more reactive to global supply chain realities.
New Borrowing Initiatives
Egypt’s COP27 Presidency and the United Nations Economic Commission for Africa have launched the “Reducing the Cost of Green and Sustainable Borrowing,” initiative for climate-vulnerable countries.
It seeks to address deteriorating fiscal health and output losses linked to climate hazards and disaster recovery costs, as well as transition risks that may hit the economy at large for vulnerable countries.
The Egyptian COP27 Presidency said: “Liquidity constraints remain some of the foremost barriers to allow African countries to invest towards climate resilience and the Sustainable Development Goals.
“This initiative will help build deeper, resilient, and sustainable financing to accelerate post-Covid green recovery through various mechanisms. The focus will be on Green and Social and Sustainable (GSS) Bonds to fill the SDG financial gaps.
“There is a need for climate action to reduce poverty and promote shared prosperity in a sustainable manner.” African countries can lower green borrowing costs by using various options, like Liquidity and Sustainability Facility (LSF): which seek to lower governments’ borrowing costs by increasing demand on their sovereign bonds.
Plus, better harmonisation of ESG standards appears on the cards, with the introduction of a global baseline of sustainability disclosures to meet the needs of capital markets to enhance transparency, accountability, efficiency, and comparability across markets.
A Sustainability Sovereign Debt Hub (SSDH) will seek to help sovereign debt issuances aligned with climate and nature.
And new guarantees from Multilateral Development Banks (MDBs) will mobilise external finance, including external debt and ODA, or avail more fiscal space through debt cancellation. This is all important because this particular COP is focusing on how poorer countries can play their part in controlling global emissions, while also developing more sustainable economies and societies.