Climate Change

COP27 diary (November 12): ‘US won't support legal structures for loss and damage liabilities’

A round-up of what went on at the Sharm El-Sheikh summit 

 
By Akshit Sangomla, Avantika Goswami, Parth Kumar
Published: Monday 14 November 2022
Trillions of dollars are required for climate finance. Photo: iStock
Trillions of dollars are required for climate finance. Photo: iStock Trillions of dollars are required for climate finance. Photo: iStock

The 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change in Sharm El-Sheikh, Egypt, began November 7, 2022. Finance dominated discussions on day six of COP27 climate talks. Here’s a look at what happened.

US climate envoy John Kerry spoke about the loss and damage finance facility. He said there was still no clear definition until now. Therefore, not many countries, including the US, agree on a commitment until there is a clear definition of how funding should be done.

There are also a bunch of countries that have been burning coal for the past 70-80 years. How does one account for that? Overall we are totally supportive of the issue of addressing loss and damage. We got the item on loss and damage into the official COP agenda, he said.


Read more: Developing countries need $2 trillion annually to tackle climate change, says report


“The US position on the new loss and damage facility is clear. We will not support any facility that has an inbuilt legal structure on liability. But we are ready to deal with the issue of loss and damage and are discussing alternative financing options for such a facility,” Kerry said.

There was a question of whether $150 million for accelerating adaptation for entire Africa was enough. Kerry answered that this was a mere downpayment from the US President Joe Biden.

Now the money will flow in from other sources. Trillions of dollars are required for climate finance. The private sector has the money and can invest in projects, but they need investment returns. Money will flow in from private sources if we engage in de-risking in vulnerable countries,” he added. 

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Countries discussed the G77 and China proposal on a framework under the Global Goal on Adaptation based on the adaptation cycle and called for a structured approach.

There are similar elements to the proposals presented by other parties and blocs. The United Kingdom called the proposal realistic and ambitious but was concerned if the framework included elements that would align with the Global Stocktake process.

Japan had more comments on the document and needed clarity on the compilation of info and monitoring progress. Lesotho, on behalf of the least developed countries, wanted a substantive decision based on workshops that have happened this year under the Glasgow Sharm El Sheikh work programme on the Global Goal on Adaptation.


Read more: Dash for natural gas on a scale that threatens 1.5°C goal, says report


The Alliance of Small Island States (AOSIS) had concerns regarding many elements in the framework, which it called pre-emptive. There were also complaints from many countries that the draft text was forwarded to the subsidiary body (SB) chairs without consulting them.

SB chairs concluded that there was no time to discuss the text further and the text that was decided upon earlier.

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Parties discussed the draft text produced by the mitigation work programme. There should be no sectoral targets and a bottom-up approach is preferred for mitigation efforts, said China, on behalf of the like-minded developing countries bloc.

Zimbabwe emphasised the need for clearer text for financial support, on behalf of the African Group. Saudi Arabia disputed the inclusion of green hydrogen as the Intergovernmental Panel on Climate Change does not classify hydrogen based on colour.

The text was then forwarded to the CMA or the signatories of Paris agreement for discussion during the second week of COP27, with many points of disagreements.

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Developed countries lack the political will to make specific commitments on climate finance by 2025, said China at the negotiations on the New Collective Quantified Goal (NCQG) on climate finance.

The role of public sector finance remains critical and the mobilisation of private finance was overstated and overestimated with respect to the $100 billion goal, highlighted Pakistan.


Read more: Russian invasion of Ukraine released 8 million tonnes carbon till September, says report


There has been a lot of procedural talk and the four workshops a year planned for the NCQG at COP 26 at Glasgow seems like “overkill,” highlighted South Africa.

There must be a focus on political issues and discussions must move beyond capturing inputs since the “failed experiences” of past climate finance goals set have provided enough information for the process to move forward, they added.

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Too many issues are still left unresolved, said UNFCCC Executive Secretary Simon Stiell at the closing plenary of the subsidiary bodies. “If we create a logjam in the process, we will not create an outcome that is deserving of this process,” Stiell added.

AOSIS emphasised the need for “NDC targets from major emitters, especially the G20.”  Pakistan called for an ambitious outcome on finance, on behalf of the G77.

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Mexico announced increased efforts to cut emissions by 35 per cent by 2030 compared to business-as-usual levels. This was announced through a $48 billion investment plan with the United States and a plan to plant 1.1 million trees by foreign minister Marcelo Ebrard.

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Feike Sijbesma, the Global Center on Adaptation co-chair, pointed out something crucial in the discussions of including private finance for adaptation funding at a side event on shaping the way forward for adaptation.

Private companies have a limited understanding of adaptation, he said. They often ask about the difference between mitigation and adaptation. Due to this, businesses are often unable to connect with funds and alternatively, funds are not able to connect with businesses, he said.

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Centre for Science and Environment, a non-profit, attended a side event on “Role of renewable energy, hydrogen and transition fuels towards India’s net zero targets” organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) November 12.

The event was moderated by the FICCI chairman Kolluru Krishan. Other members on the panel were Lalit Vohra, joint secretary, ministry of new and renewable energy; Sean Kidney, CEO of Climate Bonds Initiative etc.

The FICCI chairman emphasised that India’s stand on the phase-down of coal seemed logical, especially considering how European countries are moving back towards coal power.

He pressed on the necessity of gas as a transition fuel for India, keeping in mind and developing strategies to contain its leakages. He talked about gradually replacing natural gas with biomethane. 

Lalit Vohra laid out India’s plan for renewable energy and hydrogen. He presented three pillars of energy transition — energy efficiency, electrification and renewable energy.

Sean Kidney put out his reservations regarding transition fuels like natural gas, keeping in mind the climate change targets of the world. He also highlighted the high risk of methane emissions due to gas leakages.

He said he had no doubt about the capital available for technologies like green hydrogen and emphasised markets and bonds as the possible sources. He added that we need to reduce the cost of capital by scaling up such technologies. 

Vikram Kapur flagged that the amount of renewable energy we might require for Green Hydrogen would exceed the capacity we are planning for electricity. Global standards should be set for green hydrogen, he added.

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