At the COP27 Summit in Sharm El-Sheikh, leaders from around the world will be meeting to discuss how to achieve global net zero carbon emissions by 2050. Here, we recap the progress that has been made since the Paris Agreement was signed. And then, we will try to simplify what is on the agenda at COP this year. Finally, we will share what all of this might mean for climate business.
The 6th IPCC report was labelled a “Code Red” for humanity. The report emphasized the necessity of rapid action to keep temperature increases below 1.5 degrees. This would need a minimum reduction in emissions of 45% by 2030 to be achieved.
191 nations made promises before Glasgow, however, the outlook suggests a 16 percent rise in emissions by 2030. Which will warm the world by 2.2 degrees by the end of the century, we are not moving in the correct direction.
What’s Happened Since Paris in 2015?
In the four years since COP21, a lot has changed. The UK has gone from coal to renewable energy. The US has withdrawn from the Paris Agreement. And, Brazil has elected a President who denies climate change exists.
COP21 was successful in uniting countries behind the goal of limiting global warming to “well below 2°C above pre-industrial levels. Also,it was partially successful to pursue efforts to limit the temperature increase to 1.5°C”. This was seen as essential to avoid the most catastrophic impacts of climate change, such as food shortages, wildfires, and mass flooding.
The COP21 agreement also set out a long-term goal of achieving net-zero emissions by 2050, with each country setting its targets for reducing emissions. These “nationally determined contributions” (NDCs) were to be reviewed every five years so that they could be made more ambitious over time.
Developments
As economies in emerging and developing countries continue to grow, so do their emissions. For example, China’s emissions are expected to peak in 2030 and then become net zero by 2060.
Developed nations committed in 2009 to provide $100 billion each year to developing countries by 2020 to assist them to manage climate change. This goal has yet to be met, and it is now anticipated that it will be reached by 2023.
Increased public awareness of climate change has resulted from more frequent occurrences of extreme weather phenomena. Such as those witnessed in the United States, Germany, and Australia. Climate change protests and youth movements abound, including Extinction Rebellion.
With the present energy crunch, concerns about worldwide energy security grow; discussion on the future role of fossil fuels in the near and medium terms as renewable alternatives gain traction. The climate business has changed.
At COP26, governments around the world also made significant collective pledges to reduce methane emissions, halt and reverse tree loss, align the finance sector with net-zero emissions by 2050, ditch the internal combustion engine, speed up the phase-out of coal, and cease international financial support for fossil fuels. To name a few.
Glasgow (COP26) provided the foundation to create collaborative relationships between industries with brand-new funding supporting these endeavours. The objective is to change every area of the economy so we can reach a net-zero future.
Although progress has been made on several fronts, national climate and financing commitments are still insufficient to address the climate challenge.
About COP27
On behalf of Africa, Egypt’s path to the 27th UN Climate Action of the Parties in 2022 will incorporate cutting-edge solutions that can help close the gap this decade.
The previous COPs, held in Marrakech, Morocco more than 5 years ago, were the beginning of a continent-wide road map for action and impact; one of the world’s most vulnerable areas to the consequences of climate change.
The action calendar’s main objectives are:
Mitigation
The ultimate objective is to reduce global warming to well below 2 degrees Celsius and work hard to keep the 1.5°C target alive. This necessitates bold and immediate action. As well as a higher level of ambition from all parties, particularly those who can and should lead by example.
This year will see the Glasgow agreement’s request to review NDC goals and establish a mitigation work program.
Adaptation
Heatwaves, floods, and forest fires are now a part of our everyday existence.
The international community has come together at COP26 to reaffirm its commitment to taking action on climate change adaptation.
The goal of adapting to climate change was one of the most important outcomes of COP26. COP27 must ensure delivers the required progress, and show political commitment. Finally, to measure and evaluate our efforts in improving resilience and assisting the most vulnerable groups.
Finance
COP27 will be a make-or-break year for the world’s climate. It is critical to achieving significant progress on the key issue of climate finance, as well as an advance on all financial items on the agenda, to avoid catastrophe.
The significance of climate finance’s adequacy and predictability to the Paris Agreement’s goals is crucial, therefore there is a need for greater transparency in financial flows and easier access to meet the needs of developing countries, especially Africa, LDCs, and SIDS.
This would also increase investors’ confidence in the US dollar’s long-term performance and enable more capital to flow into emerging markets.
Collaboration
The development of partnerships and collaboration will assist us in achieving our four objectives. This ensures that the world embraces a more resilient, sustainable economic model in which people are at the centre of climate negotiations.
All stakeholders must participate actively and inclusively if we want to reach an agreement in the UN negotiations.
What This Might Mean for Business
1. Built into the climate action plan framework is the opportunity to review resource allocation policies as more clarity emerges in the plans for changing things, such as penalising emitters and promoting low-carbon sources
2. More investor confidence in green industries in the climate business as there is more clarity on the regulatory framework. These industries include electric vehicles, hydrogen energy, climate adaptation, and nature-based solutions.
3. High-emitting companies that are publicly traded come under more intense public scrutiny. Most of these companies plan to transition to being greener by changing their portfolio and teaching new skills to their workforce. There may be a shift of ownership for brown assets from the public domain into private hands. Where accountability standards and transparency may not be as high.
4. Greater regulatory pressure on corporate net-zero goals and pathways to achieve them, such as a stronger push for science-based, net-zero climate targets that are in line with the 1.5 degrees
5. A substantial increase in the global market for climate finance. Particularly adaptation and mitigation in vulnerable nations. As well as investments to scale innovation in hard-to-treat industries like aviation, shipping, construction, and steel.
In conclusion
Businesses should expect more stringent environmental regulations, an increased focus on climate finance, and a need for greater transparency in the years to come. They should also anticipate opportunities to participate in the development of new carbon markets. It is also important not to forget the growth of green industries. Climate change is no longer something that can be ignored. Businesses must adapt or risk being left behind. For more information about how your business can adapt to climate change, please contact us and follow our blog posts!