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COP27 saw climate finance breakthroughs, but failed to adapt emission pledges: Swiss Re

29th November 2022 - Author: Jack Willard

At the COP27 climate change conference that took place earlier this month, breakthroughs on climate finance were announced, but the event failed to adopt more ambitious emissions reduction pledges and agree the further phase-out of all fossil fuels, suggests Swiss Re.

Swiss Re InstituteA new report by Swiss Re Institute, highlights that the recent UN climate change summit in Egypt yielded mixed outcomes, but it did also show that climate cooperation is still workable.

Since COP26 in 2021, a more fragmented, multipolar world order has emerged from events such as the ongoing conflict Ukraine and Russia, as well as the ongoing energy crisis. This has brought new dynamics to the drive for net zero greenhouse gas (GHG) emissions, but cooperation continued.

The report points towards the US and China resuming formal talks on climate change, as well as the EU updating its climate pledges to cut emissions by 57% (up from 55%) by 2030, as key examples.

The author of the report – Hendre Garbers Economist Macro Strategy – noted that COP27 took a “landmark step” toward resolving the more than 30-year debate on how the world’s largest GHG emitters should assist nations experiencing the worst impacts of global warming. This was showcased as governments agreed to create a loss-and-damage fund that, if its details can be worked out at future talks, will send aid to vulnerable countries suffering the irreversible harms of global warming.

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Additionally, at COP27 there was also significant impetus to reform the global financial system and international financial institutions, such as the IMF, World Bank and multilateral development banks, to better deal with climate change and channel funding to poor countries.

However, the report addresses how there was significant failure at this years COP event, such as how there was almost a “total lack of progress” made on both committing to deeper cuts to GHC emissions needed to limit global warming and on fossil fuel use.

This was down to countries failing to agree on bolder actions to phase out the use of all fossil fuels, or to ensure that their 2030 GHG emission targets align with the Paris Agreement temperature goal. In addition, agreement on key issues surrounding carbon market mechanisms has been deferred to COP28.

Having set out to move from vision to action, the summit also highlighted the difficulty of obtaining unanimous agreement from nearly 200 countries to enact change in practice. Cooperation between smaller, sector-based groups of countries or initiatives was more successful and shows that progress is still under way.

But, in order to achieve 2030 targets, governments, the private sector, and consumers will need to work continually on joint, systemic climate action to effect the enormous acceleration in effort needed to get on track.

The next summit, COP28, is set to take place in November 2023 in Dubai.

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