What to expect from Egypt COP27 Climate Summit?
We are less than a month away from the climate summit COP 27th, which this year takes place in the luxury resort of Sharm El-Sheikh, in Egypt. This is the second time a Middle Eastern country hosts one of these summits. Morocco hosted the COP22 five years ago. However, since the last time world leaders met for the COP26, in Glasgow, UK, in November 2022, the world has changed a great deal. Russia has invaded Ukraine undermining Europe energy security; global inflation is at 40 years high, and we are headed to economic recession.
What will the Egyptians aim for?
While the climate stakes are higher than ever, can the Egyptians advance the implementation of global climate adaptation and mitigation? I doubt that! The Egyptian will host the Summit under the banner “Together for implementation”. This slogan aims to project partnership and cooperation at a time where the world seems to be falling apart. Egypt wants COP27 to be about moving from “Net-Zero” pledges to implementation using the summit to convert last year’s financial commitments into investments for decarbonization. Egypt itself is aiming to become the climate African champion ensuring that its own emissions continue to decline. In the electricity generation for instance, Egypt wants to lower its carbon emission by 33% by 2030. By the same year, transport emissions are expected to decline by 7%, and the oil and gas sector’s emissions should be 65% lower. In terms of renewable energy, Egypt aims to accelerate its energy transformation, having a total of 42% of renewables by 2035. The overall Egyptian “green action plan” will require at least US$250 billion investment over the next 10 years, and Egypt’s government wants to secure these funds through concessional loans and international grants particularly from Saudi Arabia, UAE and Qatar.
Timing is not on Climate’s side
Last year’s climate summit, COP26, was more pivotal than the COP27 because it was the first COP since the US returned to the table after President Trump withdrew from all climate negotiations. It was also the first climate summit in person since Covid started, and 2021 was one of the highest in terms of global climate disaster damage and losses. What is more, at Cop26, global leaders thought they were at the tail end of the Covid crisis and were upbeat about the future. Today the global economy is threatened by recession, underpinned by war, high inflation, and supply chains distortions. Just to be clear, 2022 COP26 did not deliver on its ambitious objectives. Instead of providing an actionable path to limit global warming to 1.5℃ or 2℃, COP26 commitments were shown to put the world on track for a 2.4 C by 2100.
Show us the money
Firstly, Egypt’s summit is all going to be about climate finance to support climate mitigation and adaptation. Emerging economies will press hard on developed countries (the largest GHG emitters), to deliver on their 2009 commitment to provide US$100 billion per year in climate funds for developing countries. This was prioritized at COP26 as well as the G20 in 2022 but hasn’t gone anywhere since. Secondly, where politics are failing, businesses will pick up the slack. We should expect more investments from large corporations who believe we are in the middle of a green industrial revolution. To be more specific, investments in low carbon projects in emerging markets alone should surpass a trillion dollars a year by 2025. The total investment expected in sustainability by 2025 will be approximately $5 trillion per year. According to McKinsey, growing demand for net-zero services and technologies are accelerating and could generate more than $12 trillion of annual sales by 2030 with key leading sectors including transport ($2.3 trillion to $2.7 trillion per year), power ($1.0 trillion to $1.5 trillion), and hydrogen ($650 billion to $850 billion).
We should not expect miracles out of these global summits. Particularly during market turmoil and geopolitical instability. What we should expect instead, is a stronger multilateral engagement towards the transformation of our economy and society. This transformation will have the private and public sector interact more closely to ensure climate risk is well integrated into decision making to better plan future investment and to convert climate risk into opportunities for all.
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