What you need to know about COP27:

Three takeaways from the latest climate talks

Introduction
In early November 2022, global Nationally Determined Contributions, or Despite early fears that COP27 would
leaders representing governments, NDCs), if fully implemented, would result be purely procedural, the outcome was
the private sector, and civil society in emission reductions of only 5-10% something of a mixed bag, with notable
gathered in Sharm El Sheikh, Egypt by 2030,1 drastically short of the 43% breakthroughs tempered by lack of
for the 27th session of the Conference decrease needed to limit global warming progress elsewhere. On balance, COP27
of the Parties to the UN Framework to 1.5°C.2 Further coloring the talks represents a missed opportunity to
Convention on Climate Change were developed countries’ continued meet the moment in transitioning from
(COP27). While expectations were shortfall in mobilizing the US$100 billion negotiation to implementation of the
tempered entering the two weeks of annually of new and additional climate Paris Agreement agenda.
the conference, the need for rapid financing they had previously committed
progress continues to build. to;3 the Organisation for Economic Here are three key takeaways from
Cooperation and Development (OECD) this year’s most important climate
Underpinning the sense of urgency were estimates that in 2020, all climate finance change talks.
sobering new findings that countries’ (including private capital) totaled only
current climate commitments (known as US$83 billion.4
 What you need to know about COP27: Three takeaways from the latest climate talks

1.  tale of two COPs: Creation

A
of a “loss and damage” fund
contrasted by failure to
Second, developed countries continue
to fail to mobilize climate finance
commensurate with what is needed
2. Increased emphasis on
private actors

enhance ambition or even their own commitments. Earlier drafts of the cover decision
The persistent shortcomings in global were explicit in highlighting the role
COP27 will be remembered for the climate finance are eroding confidence in of collaboration with private actors in
creation of the Loss and Damage Fund. existing approaches for deploying capital advancing the Paris Agreement goals,
A major achievement grounded in the to enable the green transition. Multilateral before seeing the language watered down
unflagging efforts of developing and and international financial institutions were under the collective term “non-Party
emerging economies, the Fund provides a called upon to explore reforms to enable stakeholder.” This shift highlights both the
prospective means to support vulnerable funding scale up, simplify access, and growing awareness among governmental
nations in responding to climate-related define a vision, model, and framework that negotiators of the important contributions
socio-economic impacts.5 More broadly, is fit for purpose.10 In line with international of the private sector, but also the continued
the talks emphasized creating pathways calls,11 more work is needed to develop need for private actors to build trust and
to an equitable and just transition that the financial architecture to unlock the demonstrate authenticity in the official
accounts for energy poverty and security, reservoir of climate finance. process. (That said, their crucial role was
socio-economic concerns, workforce clearly understood in the corridors and
implications, and plenary halls.) COP27 also underscored
other issues.6 that a greater degree of alignment is
A dedicated work The persistent shortcomings needed across sectors and within supply
program on chains to lead the needed transition, in
Action for Climate in global climate finance are particular in hard-to-abate sectors.
Empowerment
was established eroding confidence in existing To that end, the UN High-Level Expert
to build upon Group (HLEG) on the Net-Zero Emissions
and complement approaches for deploying Commitments of Non-State Entities
existing initiatives provided recommendations for a common
related to scaling capital to enable the green framework to understand, evaluate, and
up mitigation, advance engagement with the climate
ambition, and transition. transformation by private actors (especially
implementation.7 companies), allowing for continued
Finally, in the area of international carbon refinement and ratcheting up of ambition.
Juxtaposed against these (limited) advances markets, COP27 made little progress The Climate Champions also outlined ways
were missed opportunities in critical areas. in emphasizing the role of positive for private actors to accelerate action to
First, the COP27 Implementation Plan (the conservation co-benefits12 or in integrating address loss and damage.13 With a view to
key outcome agreement of the conference) respect for human rights and sustainable address both economic and non-economic
failed to call for a phase down of all fossil development under Article 6 of the losses, non-State actors are identified
fuels, as proposed by India and supported Paris Agreement. as integral to advancing ambition and
by the US, EU, and more than 80 other accelerating finance flows to critical areas
nations.8 That shortcoming was even more Realizing the ambitions of the Paris of need. Announcements such as data
conspicuous given ongoing progress in Agreement requires an enduring partnerships to minimize supply chains
parallel initiatives, such as the Beyond Oil & commitment to 1.5°C as the goal, the emissions,14 philanthropic commitments to
Gas Alliance, which expanded membership creation of new institutional structures enable a just energy transition in low- and
to 17 total governments (including national while reforming others, and continued middle-income countries,15 and the Biden-
and subnational), or the Just Energy calibration of Paris Agreement mechanisms Harris plan to protect US government
Transition Partnership, a multi-donor to ensure they drive sustainable systems from climate-related risks16 are
initiative to phase out coal in Indonesia.9 development outcomes. emblematic of the breadth and depth of
Such efforts are illustrative of a broader roles played by non-State entities in the
global shift grounded in a rapid energy green transition. Building partnerships
transition, regardless of the consensus with the private sector was also embedded
decision adopted at this particular COP. in the policy priorities under last year’s
Glasgow work programme on Action for
Climate Empowerment.17

2
 What you need to know about COP27: Three takeaways from the latest climate talks

3.  he critical role of new and

T
emerging technologies in the
green transition
Actualizing green technology solutions that
are often capital intensive at scale requires
an increased understanding of the critical
components necessary to unlock climate
Scaling up of new and emerging finance, align stakeholders and partners,
Overall, non-State technological solutions was central to and formulate pathways for sectoral
the discussions. One such innovative transformation.
actors have more pathway, green hydrogen, was a central
topic across COP27. A crucial enabling
opportunities technology for decarbonization, it can
Conclusion
also drive sustainable development more
than ever to broadly and can have a transformative
In this crucial decade of action
economic impact on particular regions.
demonstrate Significant work is needed, however, to and implementation, COP27
de-risk green hydrogen investments and
leadership, forge mobilize sufficient financing to scale the
has highlighted that private
highly capital-intensive infrastructure in actors play an essential role
coalitions, and jurisdictions with potentially misaligned
in influencing broad systemic
legal and regulatory frameworks.
share experiences Recently announced projects, such as changes through adoption
the Germany and Namibia partnership
that can help for green hydrogen, hold the potential to
of coalition and value-chain
leverage unique geographic advantages approaches and formulating
inform sectoral to generate cost-competitive green
networks to enable green
hydrogen, increasing supply, enhancing
transformations. domestic energy access, and enabling transition innovations to be
broader sustainable development
benefits, domestically and regionally.18
effectively realized. As we look
Further exploration remains needed on to COP28, our ambition must
the potential market size and required
governance, financial, and regulatory
be high—and complemented
reforms needed to actualize green by a solution-focused
hydrogen investments at scale.
perspective focused on
Other announcements saw a coalition putting the Paris Agreement
of ten leading organizations in maritime
transport voice their support for the
into practice.
role of green hydrogen in shipping.
The coalition committed to producing
and deploying 5 million tons of green
hydrogen by 2030 and growing rapidly to
90 million tons by 2040.19 With notable
signatories across the industry, the
coalition calls on policy makers to support
this ambitious agenda. Under the Clean
Skies for Tomorrow and Sustainable
Markets initiatives directed by the World
Economic Forum, a Sustainable Aviation
Fuel (SAF) Offtake Pocket Guide was
launched to provide clarity for businesses
on their role in the decarbonization of
aviation, the importance of SAF, and how
they might collaborate to signal demand
and leadership while broader policy
frameworks are developed.20

3
 What you need to know about COP27: Three takeaways from the latest climate talks

Endnotes
1. UNFCCC, Nationally determined contributions under the Paris Agreement: 14. Sequoia Climate Foundation, Leading Philanthropies Commit Half a Billion
Synthesis report by the secretariat (2022), FCCC/PA/CMA/2022/4, para 13, for an Equitable Energy Transition, Press Release (10 November 2022), www.
139, [Link] [Link]/news-releases/leading-philanthropies-commit-half-a-
2. Sharm el-Sheikh Implementation Plan, Draft decision -/CP.27, para 8-9, [Link].
[Link] 15. Ordnance Survey, OS announces coalition agreement for Supply Chain Data
[Link]. [Sharm el-Sheikh Implementation Plan]; UNEP, Adaptation Gap Partnership, Press Release 13 November 2022, [Link]/
Report 2022: Too Little, Too Slow - Climate adaptation failure puts world at newsroom/news/os-announces-coalition-agreement-for-supply-chain-data-
risk, (Nairobi: United Nations Environment Programme, 2022). [Link]. partnership.
org/resources/adaptation-gap-report-2022; UNEP, Emissions Gap Report 16. The White House, FACT SHEET: Biden-Harris Administration Proposes Plan
2022: The Closing Window – Climate crisis calls for rapid transformation of to Protect Federal Supply Chain from Climate-Related Risks, Press Release
societies, (Nairobi: United Nations Environment Programme, 2022), (10 November 2022), [Link]/briefing-room/statements-
[Link]/resources/emissions-gap-report-2022; WMO, State of the releases/2022/11/10/fact-sheet-biden-harris-administration-proposes-plan-
Global Climate 2021 (Geneva: World Meteorological Organization, 2022), to-protect-federal-supply-chain-from-climate-related-risks/.
[Link]
of-global-climate; IPCC, Climate Change 2022: Impacts, Adaptation, and 17. Draft decision [-/CP.27][-/CMA.4] Action plan under the Glasgow
Vulnerability. Contribution of Working Group II to the Sixth Assessment work programme on Action for Climate Empowerment, (2022) FCCC/
Report of the Intergovernmental Panel on Climate Change, (Cambridge, SBI/2022/L.23, para 4(d), [Link]
United Kingdom: Cambridge University Press). [Link]/report/ar6/wg2/; SBI2022_L23E.pdf.
IPCC, Climate Change 2022: Mitigation of Climate Change. Contribution of 18. Germany, Karliczek: Germany and Namibia form partnership for green
Working Group III to the Sixth Assessment Report of the Intergovernmental hydrogen, Joint Communiqué of intent (2022), [Link]/bmbf/
Panel on Climate Change, (Cambridge and New York: Cambridge University shareddocs/kurzmeldungen/en/[Link];
Press), [Link]/report/ar6/wg3/. UNFCCC Innovation Hub: High-level Ministerial Event on Green Hydrogen, 11
3. Sharm el-Sheikh Implementation Plan, para 33. November 2022, COP 27, [Link]/watch?v=-SCdjDJLJrI.

4. UNFCCC, Report on progress towards achieving the goal of mobilizing jointly 19. UN Climate Champions, Maritime sector and green hydrogen leaders agree
USD 100 billion per year to address the needs of developing countries on ambitious targets and collaboration to reach zero emissions global
in the context of meaningful mitigation actions and transparency of shipping by 2050, (14 November 2022), [Link]
implementation, Standing Committee on Finance (2022), at 55, green-hydrogen-and-green-shipping/; Joint Statement on Green Hydrogen
[Link] and Green Shipping (2022), [Link]
2022%20Report_Book_v3.[Link]. uploads/2022/11/[Link].

5. Draft decision -/CP.27 -/CMA.4 Funding arrangements for responding to loss 20. Clean Skies and Sustainable Markets Initiative, SAF pocket guide for
and damage associated with the adverse effects of climate change, including Corporate Customers, (2022), [Link]
a focus on addressing loss and damage (2022), FCCC/CP/2022/L.18–FCCC/ content/uploads/2022/11/heathrow_smi_saf-[Link].
PA/CMA/2022/L.20, para 1-2, [Link]
cp2022_L18_cma2022_L20_revised_adv_0.pdf.
6. Sharm el-Sheikh Implementation Plan, para 11.
7. Sharm el-Sheikh Implementation Plan, para 50-52.
8. S Jessop, “India seeks COP27 deal to ‘phase down’ all fossil fuels” Reuters (12
November 2022), [Link]/business/cop/india-seeks-cop27-deal-
phase-down-all-fossil-fuels-sources-2022-11-12/; JA Dlouhy, US Backs Tough
Fossil Fuel Phase Down Pledge at Climate Summit, Bloomberg (16 November
2022), [Link]/news/articles/2022-11-16/us-backs-tough-
fossil-fuel-phase-down-pledge-at-climate-summit?leadSource=
uverify%20wall.
9. EU, Joint Statement by the Government of the Republic of Indonesia (GOI)
and the Governments of Japan, the United States of America, Canada, the
Kingdom of Denmark, the European Union, the Republic of France, the
Federal Republic of Germany, the Republic of Italy, Norway, United Kingdom
of Great Britain and Northern Ireland (together the “International Partners
Group” or IPG), Press Release (15 November 2022), [Link]
commission/presscorner/detail/en/statement_22_6892.
10. Sharm el-Sheikh Implementation Plan, para 37-38.
11. Sharm el-Sheikh Implementation Plan. para 62.
12. Draft decision -/CMA.4, Guidance on the mechanism established by
Article 6 paragraph 4, of the Paris Agreement, (2022) FCCC/PA/
CMA/2022/L.14,.Annex I, para 9, [Link]
resource/cma2022_L14_adv.pdf.
13. UN Climate Change High-Level Champions, Actions After Impacts
What actions are non-state actors taking to address climate losses and
damages? How can these be accelerated?, Discussion Paper (2022), https://
[Link]/wp-content/uploads/2022/11/Actions-After-
Impacts_-Accelerating-Action-by-non-State-actors-to-address-climate-
[Link].

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 What you need to know about COP27: Three takeaways from the latest climate talks

Authors

Prof. Dr. Bernhard Lorentz

Global Consulting Sustainability & Climate Strategy leader
Founding Chair of the Deloitte Center for Sustainable Progress
Partner, Deloitte Germany
blorentz@[Link]
+49 15114881437

Dr. Pradeep Philip

Deloitte Economics Institute
Partner, Deloitte Australia
pphilip@[Link]
+61 416214760

Freedom-Kai Phillips
Deloitte Center for Sustainable Progress
Director, Deloitte Global
fphillips@[Link]
+1 647-529-6621

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