COP27:  Key Findings and Solutions

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COP27 ended on Sunday 20th November, some 36 hours after it was scheduled to.  The key findings and solutions are as follows:

 

1. Loss and damage finance mechanism to be established before the next COP

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A loss and damage fund was agreed by almost 200 countries at COP27.  This is an historic agreement which has been the subject of intense negotiations, not just at COP27 but for the last two decades. 

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The fund, which must be set up by the next COP in 2023, will finally see nations who have been impacted most by the effects of climate change, receive finance from those nations historically responsible for its amplification.  Contributors and recipients are still to be determined by a committee of 24 countries, although liability will not be ascribed to nation asked to make payments.  A key point of contention will be whether China, the world’s largest emitter, and India will either contribute to the fund or benefit from it.  All recommendations, including how the fund will work, will be presented at COP 28 in Dubai.  Responsibility for the funding mechanism is with the UNFCCC under the Paris Agreement.

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Christopher Kerr, Head of DJB’s ESG Special Interest Group said: “The tagline for COP27 was ‘together for implementation’ which was a nod to all nations being united in the battle against climate change.  To achieve that all 196 nations had to have a difficult conversation around ‘loss and damage’, which has created much distrust between developing nations and wealthier states.  An agreement simply had to be made re loss and damage, or a united front would have been impossible.  So this outcome is, prima facie, a positive outcome.  Much still needs to be done, and I suspect the structure of the fund, and the finance made available to developing nations will be an equally important step in building unity.”

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Jonathan Warner-Reed, a Partner and Litigator at DJB noted the benefits of reaching an agreement, as the legal route would have been very difficult and contentious:  “Proving individual causation will be difficult. There may well be an established causal link between global warming and climate disasters, but how are those nations involved to be held accountable, and by how much? At the very hint of compensation, the countries traditionally held responsible will seek to minimise their share of responsibility, and the first question they will ask is whether it is possible to match the level of carbon emissions from a particular quarter directly against a weather disaster in another? Indeed, how can it be proved that any one disaster would not have happened anyway, or how much worse it was than it might have been, had the responsible country not produced as many emissions? The questions of who caused what and how, and how one starts to calculate quantum are certainly fraught with difficulty and not easy to unravel.”

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For more on ‘loss and damage’ click here: 

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2. Climate Finance debates are still not resolved

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Much was made of the fact that wealthier nations, who were required to deliver $100 billion a year by 2020 to help poorer countries with cutting emissions and adaption to the climate crisis, had so far failed to do this.  Climate finance was therefore expected to be resolved at COP27 but the agreement only goes as far as expressing “serious concern” that the $100 billion a year target continues to be missed and “urges developed county parties to meet the goal”. 

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Discussions did take place at COP27 adding “high income” countries to the list of nations already signed up to $100 billion target, including Saudi Arabia, Qatar and Israel among others but this didn’t make it into the agreement. 

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The agreement did highlight that $4 trillion is needed per year to be invested in renewable energy up to 2030 to reach net-zero by 2050.  The agreement also states that $4-$6 trillion per year is needed to ensure a global transformation to a low-carbon economy. 

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3.  Significant concerns remain around the 1.5C limit and emissions

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The agreement specifically calls for nations to: “accelerate the development, deployment and dissemination of technologies, and the adoption of polices, to transition towards low-emission energy systems, including by rapidly scaling up the deployment of green efficiency measures, including accelerating efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies”. 

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Countries could not agree on provisions that would accelerate cuts to emissions, with the final agreement largely keeping to what was officially stated in Glasgow at COP26.  As per last year, the text keeps to ‘phasing down’ rather than ‘phasing out’ fossil fuels, which significantly weakens the requirement.

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As a result, UN Secretary-General Antoni Guterres, stated the deal struck at COP27 did not deliver the requirements need to take the planet out of “the emergency room”.

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“Low emissions” energy was mentioned in a COP agreement for the first time, which has raised concerns of a loophole that would allow fossil fuels to be produced if paired with carbon capture technology to trap emissions.  Gas, which technically has lower emissions than coal but remains a fossil fuel, also fits this loophole.

 

There have been many critics of this agreement, including last year’s COP26 President Alok Sharma. 

 

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4.  Key initiatives announced at COP27 include:

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Many key projects, groups and initiatives were released throughout the Conference, including:

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• The launch of the first report of the High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities 

• The Executive Action Plan for the Early Warnings for All initiative was released by the UN.

• Former US Vice-President and climate activist Al Gore, with the support of the UN Secretary-General, presented a new independent inventory of greenhouse gas emissions 

• A plan to accelerate the decarbonization of five major sectors – power, road transport, steel, hydrogen, and agriculture – was presented by the COP27 Egyptian Presidency

• The Sharm El-Sheik Adaptation Agenda 

• Action on Water Adaptation and Resilience Initiative (AWARe) 

• African Carbon Market Initiative (ACMI) 

• The Insurance Adaptation Acceleration Campaign 

• The Global Renewables Alliance 

• The Egyptian COP27 Presidency launched the Food and Agriculture for Sustainable Transformation initiative or FAST, to improve the quantity and quality of climate finance contributions to transform agriculture and food systems by 2030 

• The First Movers Coalition (FMC) Cement & Concrete Commitment 

 

 

5. Views on COP27 from DJB lawyers

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DJB Partner, Stephen Chalcraft commented on the push for decarbonisation and the UN’s stance on greenwashing: “Decarbonisation is inevitable and will be extremely costly for the real estate and construction sectors.  At DJB our main concern is that Government pressure and legislation will dictate a pace of change of that far outstrips the sectors’ ability to respond in an economically effective manner, and that could destabilise a critical part of our national economy.  The only way I can see this working is via a sensible and programmed set of measures that (i) promote Green Growth and (ii) builds in resilience which allows us to adapt in a sustainable manner.  This is critical to the future success of decarbonisation, and the Government will need to elaborate on these issues and further develop net zero funding strategies”

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DJB Senior Partner, Madeleine Davitt on the coming pressure for commercial real estate companies: “Whilst many developers, investors, landlords and estates managers have increased their time and resource spend on environmental matters since COP26 last year, they will inevitably come under increasing pressure now from regulators and consumers to increase the pace when it comes to decarbonisation.”

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Madeleine Davitt on biodiversity in our developments: “Both national and local Government are already developing and implementing planning policy and legislation in support of more global frameworks on biodiversity and we can expect more as a result of discussions at COP27 and the upcoming Biodiversity COP15.  The recent Government Property Sustainability Strategy also makes improving biodiversity in the Government estate a key part of their plans.  I would therefore encourage the commercial real estate sector to begin looking at nature based solutions as an opportunity rather than an unnecessary cost or box-ticking exercise.”

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Nigel Hewitson (Partner – Planning and Heritage) explains how biodiversity will impact planning now and in the immediate future: “In some senses UK domestic law and policy is ahead of the curve on biodiversity. The Environment Act 2021 introduced a requirement, which is anticipated to come into force in the course of 2023, for new developments to provide for a 10% increase in biodiversity over what was present on site prior to permission being granted. This is referred to as Biodiversity Net Gain or BNG. Many local authorities have, in advance of the change in the law, adopted policies on BNG and are already securing net gains on new developments. BNG will clearly often be easier to achieve on brownfield sites than on greenfield so this may become a driver for developers to favour brownfield sites. The other impact may well be on density. If space has to be set aside for biodiversity it may well be that less development can be got onto the site than would otherwise be the case.”

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Matthew Needham-Laing talks about how to deliver renewable energy in a more cost-effective way:  “Dealing with CO2 emissions then power generation is probably high on the agenda for everyone, more so given gas and electricity prices (again because of successive governments’ policy in ’the dash for gas’) with 43% of electricity in the UK generated by fossil fuels (the majority being gas powered generators). Government policy has lacked foresight with a failure to invest in alternative energy sources, instead relying on the private sector. 

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For example this country is blessed with being surrounded by seas which have some of the biggest tidal ranges in the world.  The benefit of this is that the rise and fall of the tide is free, predictable, and twice daily (in some areas they have double tides due to topography).  The problem is that sea water is also very aggressive, so the machinery required needs to be robust and maintenance is not easy,  and consequently the initial cost is more expensive than solar or wind.  However tidal power has the capacity to generate approximately 11% of the UK’s energy requirements – which is the same as the contribution by solar and biomass power combined last year.   Last year the government finally announced that it would (hasn’t happened yet) invest £20 million per year in tidal power, but as usual it is too little too late and the technological advantage that the UK previously enjoyed with this technology has been overtaken by other countries who have invested. 

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Another example would be tidal lagoons such as the Cardiff Bay Barrage, originally conceived in 1980, construction work finally commenced in 1994 (14 years in planning!) and opened in 2001 (7 years in construction), it had the potential to meet the annual electricity requirement of every home in Wales.  I don’t think it generates any electricity as the government insisted that the power generation be financed by the private sector who could not meet the initial capital costs.  Similarly the Severn barrage (the Severn estuary has the second largest tidal range in the World) has been shelved because of the initial capital costs (estimated £30 billion) but if constructed could meet 10% of the UK’s electricity requirements!   

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Nuclear power is another area where the UK was once a world leader but due the successive governments’ policy we have now fallen behind and are having to use Chinese/French technology (which is now frankly out of date) to construct Sizewell C – estimated costs £20 billion – construction not yet started and expected completion and operational 12-15 years from commencement of construction.  Expected to power 7% of the UK’s electrical requirements.  

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Fortunately, Boris did approve the construction by Rolls Royce of 16 small Modular Nuclear reactors by 2045.  These are tried and tested and developed in nuclear submarines, so we know they work, they are about the size of a couple of football pitches and if all 16 are built they will generate about 440MWe of power (approximately 20% of the UK’s electrical requirements).”