COP27 achieves breakthroughs in funding & decarbonization

It has been 10 years since all countries agreed at the COP17 climate conference to reduce carbon emissions. Since then, while many nations have been actively exploring how to achieve net-zero emissions, major polluters like Russia and China have given no sign of pledging to cut their carbon output. There have also been years of stand-off over the issue of financial support for developing nations hurt by climate change from advanced nations that have already profited from decades of emissions. Happily, the COP27 that just ended in Egypt achieved progress in these areas.

Breakthrough Agenda for decarbonization of key sectors

One of the areas of significant progress was the announcement of 25 new collaborative actions to be taken by next year’s COP28 to speed up decarbonization in the five major sectors of power, road transport, steel, hydrogen and agriculture. These sectors account for more than 50% of greenhouse gas emissions. Called the Breakthrough Agenda, 47 countries have signed onto it.

Within this agenda, Japan formally joined the Clean Energy Ministerial Industrial Deep Decarbonization Initiative. Regarding agricultural issues, Japan is responsible for an action called research, development, demonstration and deployment, alongside the governments of Ireland, Morocco, Nigeria, Sweden, and the United Kingdom.

The priority actions of the agenda are:

• Develop common definitions of low- and near-zero emission steel, hydrogen and sustainable batteries to help direct money in investment, procurement and trade to ensure credibility and transparency.
• Speed up the implementation of crucial infrastructure projects, such as development of at least 50 large-scaled net-zero industrial plants, at least 100 hydrogen valleys, and a set of international power grid projects.
• Establish a common target date for eradicating polluting cars and vehicles.
• Use public and private procurement and infrastructure spending to incentivize global demand for environmentally friendly industrial goods.
• Make a better financial and technological support system to aid the transitions of vulnerable countries and emerging markets.
• Strengthen investment in agricultural research and development to find solutions to cope with food insecurity, climate change and environmental degradation.

Adaptation Fund for loss and damage

A ground-breaking achievement of COP27 was the agreement to establish a new fund to help vulnerable countries deal with loss and damage caused by the effects of climate change. Called the “Adaptation Fund,” COP27 was even extended by one day in order to reach a decision on it. The negotiations were challenging, and followed years of debate between advanced countries and developing nations. The main points discussed were:

• Whether to decide on the creation of the fund at this meeting, or
• Carry the decision over to next year
• Does it have to be a fund or would a different form of financial support be sufficient

The parties also agreed to set up a transitional committee to establish new funding arrangements and the fund itself at COP28 next year. The committee is expected to hold its first meeting in March 2023. Pledges made for the Adaptation Fund at COP27 totaled more than US$230 million.

Reaching the Breakthrough Agreement is a success of the latest COP meeting, but its implementation is the most important thing. We have no guarantee that all the leaders who agreed to the agenda will keep their word. Investment to accelerate the shift to a low-carbon emission economy is expected to be US$4 trillion-$6 trillion a year. Given that developed countries have already failed to deliver financial pledges for $100 billion a year by 2020, which they promised in 2009, it is reasonable to be concerned about the credibility of their promises this time, too.

Japan at a crossroad in its climate intentions

Japan is one of the developed nations that has played a significant role in climate action, especially in terms of finance and comprehensive governance, but the fact that Prime Minister Kishida did not attend the conference did not look good. Also, Japan was criticized and received a Fossil of the Day Award at COP27 for having invested the largest amount of public money in fossil-fuel projects in the world.

Japan is standing at a crossroad. One road leads it onward to helping vulnerable countries and using wealth to create a healthier planet, and the other road leads to using it for itself, knowing that that will push people and our planet toward destruction. Which path would you like Japan to take?