The sprawling nature of the COP27 summit can make it difficult to see the wood from the trees. However, money is at the centre of the discussions and is set to be highly contentious, alongside the headline issues of commitments to reduce greenhouse gas emissions and whether long-standing promises can be turned into long-awaited action.
While there have been lengthy discussions about funding the green transition – the massive investment required in renewable energy – the funding debate at COP27 goes wider than this. It includes demands from less-developed countries for compensation for the costs of dealing with climate change, imposed on them by the pollution from richer countries. The agreed agenda does include this “loss and damage” issue,but omits any reference to the liability of the richer countries to provide this, or to compensate for past actions.
That richer countries have been responsible for the vast bulk of emissions, and less developed countries have faced most of the costs – this year’s terrible floods in Pakistan being just one example – is obvious. What can be done to offset this damage and help poorer countries mitigate the cost in years to come? The real issue is what actually happens and whether the big players step up and provide the resources, rather than tortuous debates over language.
US climate envoy John Kerry plans to present one proposal, which would involve raising funding from companies buying carbon credits from governments and state agencies – who in turn would earn them for reducing fossil fuel emissions. The funding raised would then be directed to help less developed countries reduce their reliance on more polluting fuels.
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This idea may have merit, though the concept of companies buying credits to offset emissions remains controversial and is clearly used in some cases for greenwashing. Better that companies cut emissions. For governments, putting money on the table will be required if COP27 is to have any chance of making its mark. Woolly promises will simply not be enough.