December 1st, 2022

COP27: Elation over new fund, but high-carbon states block fossil fuel cuts

By Richard Black & Dr. Johannes Lundershausen

Omens for the 2022 United Nations climate summit (COP27) were not good. The clouded skies of US-China geopolitics, the scars of the Covid-19 pandemic still biting deep in many developing countries, and the toxic shock that Russia’s invasion of Ukraine delivered to economies, energy security and the international world order made for an unpromising backdrop. Then there was the choice of summit host, Egypt: a country with no discernible reputation in climate change negotiations but rapidly acquiring one for human rights violations, and an economy increasingly supported by Saudi Arabia and other high-carbon states in the region.

Although formal negotiations at the summit indeed delivered little that will accelerate the cutting of carbon emissions, agreements and processes launched on the sidelines offer hope for progress.

The biggest breakthrough in the negotiations undoubtedly came in Loss and Damage. For the first time, all countries agreed that developing nations hit economically by climate change impacts will receive support from the countries that have done most to cause it. Until now the United States, European Union and other historical big emitters have constantly blocked progress on Loss and Damage, fearing they could face an indefinitely rising bill for compensation; the Biden administration’s change of tack in Sharm El-Sheikh was crucial, as was the EU’s more overt support.

Many details about the funding mechanism through which money will flow to the most vulnerable nations are yet to be determined. An expert group will make recommendations before next year’s climate summit. However, the agreement at COP27 was truly remarkable, as evidenced by the elation of developing country diplomats and campaigners who have spent decades working for this.

If the success was primarily theirs, it is one in which philanthropy has played an important role. Organisations representing people in the poorest countries tend unsurprisingly to be short of funds. In the last few years, philanthropy has identified organisations working effectively on Loss and Damage, such as the Climate Vulnerable Forum, and disbursed the relatively small sums they need to produce analysis and reports, and make their voices heard in corridors of power. And at the Glasgow summit last year, five philanthropic foundations alongside two regional governments very publicly pledged millions of dollars towards Loss and Damage, embarrassing national governments into finally stepping forwards after years of delay.

Joy at the undoubted breakthrough should perhaps be tempered by the reflection that the need for Loss and Damage funding is a mark of the world’s historical failure to curb greenhouse gas emissions. If governments were reflecting on this in Sharm El-Sheikh, however, there was no commitment to reduce further losses and damages by accelerating emission reductions. For example, there is little reference to the 1.5°C global warming target and no mention of the need to peak emissions within the next three years.

The COP27 agreement is the first to formally recognise the specific role of renewable energy and nature-based solutions. But at the very last moment, the Saudis and their allies insisted on placing mention of ‘low-emission’ energy alongside renewables in the final text. This vague phrase could be taken as reflecting Saudi interests in carbon capture and storage, and could also be misused by gas lobbyists on the basis that ‘gas is low-emissions compared with coal’. Attempts by more progressive governments to insert a commitment to phase down use of all fossil fuels – advancing from the coal phase-down commitment secured last year – failed. In the real world, adoption of clean energy forges ahead, with both renewables and electric vehicle markets growing exponentially. But this was not reflected inside the COP agreements.

In comparison to the official delegations, philanthropy is not the main player in the formal negotiations at the COPs. But their versatility has often seen philanthropic funders act as accelerators of crucial debates and action. Although the formal COP27 negotiations ended up delivering little on decarbonisation, philanthropy has supported several developments on the sidelines that promise progress.

A common feature of recent COPs are financial pledges by philanthropic funders. Regardless of size of the pledge, they help to raise critical issues and draw attention to the lack of financial support from governments and businesses.

  • The Rockefeller Foundation is contributing US$ 10 million in support of 10 civil society organisations focusing on indigenous peoples and regenerative agriculture practices globally.
  • The recently installed “Forest, People, Climate” collaborative of 13 philanthropic donors and civil society organisations saw an additional US$ 400 million pledged to support its work against tropical deforestation.
  • The Gates Foundation pledged US$ 1.4 billion to meet the climate adaptation needs of smallholder farmers, adding US$ 434 million to existing commitments.
  • A coalition of nine climate funders announced an investment of US$ 500 million over three years to accelerate a just and equitable energy transition in low and middle-income countries.

Philanthropies have also leveraged their networks to launch initiatives and build coalitions. For several years, foundations have been raising the importance of tackling methane, the second most important greenhouse gas and crucial in cutting near-term warming. Links to the US government helped persuade the Biden administration to spearhead the Global Methane Pledge. Just before the Glasgow summit last year, more than 20 foundations contributed sums over $200m in launching the Global Methane Hub, to fund programmes that will deliver real in-country emission reductions. By COP27, membership of the Global Methane Pledge had jumped from about 100 at the Glasgow summit to 150. Signatory countries pledge to reduce methane emissions by at least 30% by 2030. Putting a focus on implementing the Pledge, Bloomberg Philanthropies, together with the U.S. State Department, launched a Subnational Climate Action Leaders Exchange (SCALE), to help cities, states, and regions in preparing viable roadmaps to net-zero.

At the summit, funders were instrumental in creating spaces for urgent conversations. One way to spark debate is to contribute analyses that influence official negotiations or, at least, highlight issues of high importance that are low on the agenda of negotiations. In this vein, COP27 President Minister Sameh Hassan Shoukry received an open letter from 15 major food and agriculture foundations calling on governments to invest more in transforming food systems. Their new research found that, though food systems contribute a third of global greenhouse gas emissions, only 3% of climate finance goes to food systems action. Currently, just 83 countries include food systems in their Nationally Determined Contributions (NDCs). Hence, the signatories encourage country officials to “(re)direct public finance to food systems that foster adaptation and resilience.”

Inevitably, questions are being raised about the worth of the United Nations climate convention and its annual summits. But in all probability, none of the advances outlined above would have happened without the annual summits because they bring formal negotiators together with civil society, businesses and philanthropy. Philanthropy is a critical stakeholder here. As Mshai Mkoji from the African Climate Foundations points out:

Given its resources, flexibility and agility, [philanthropy] has the potential to confront the persisting disconnect between commitments and implementation. The philanthropy fraternity among many other stakeholders plays a pivotal role as catalysts and funders of change and development within society.”

This is why we encourage all funders to take a more active role in fighting the climate crisis. The UN negotiations, including the next COP taking place in the United Arab Emirates in a year’s time, is one of many areas where funders can step in to accelerate change. One first step for new funders is to join the #PhilanthropyForClimate movement and to learn more about what other funders are doing and how to make a difference.