Authored by: Nate Van Beilen and Adi Dunkelman
The 27th Conference of the Parties (COP) to the United Nations Conference on Climate Change (UNFCCC) will occur in Sharm el-Sheik from November 6 to 14 amidst growing concern about humanity's ability to keep warming below 1.5 °C or even 2 °C set out in the 2022 UNFCCC NDC Synthesis report. High expected participation from world leaders can hopefully lead to scaled climate action and policy implementation. COP26 included a significant focus on commitments and negotiations around specific technical rules that resulted in progress on Article 6 rules.
Expectations for this year’s COP include a focus on the implementation and operationalization of the Paris Agreement surrounding the following topics:
Loss and damage: One of the more controversial issues at global climate talks, loss and damage discussions will focus on how vulnerable developing nations should be compensated for the costs associated with climate change. How wealthy nations approach this topic and the associated implications for increased litigation will be watched closely by all stakeholders.
Adaptation: Adaptation will be a key topic this year, especially as the conference is located in Africa, a continent likely to face significant impacts of climate change. Adaptation is becoming increasingly important – particularly as the world experiences continued droughts, record heat waves, and other extreme weather events driven by climate change.
Climate finance: In 2009, developed nations promised to deliver $100 billion in climate finance by 2020 to developing nations. Unfortunately, this goal was not met. Increased flow of finance to developing countries is critical to ensuring these countries can make investments toward lower GHG emissions trajectories. Private capital has a critical role to play – a statement signed by 602 investors representing $42 trillion in AUM declared their commitment to this role.
Article 6: ClearBlue Markets expects discussions to take place around Article 6 reporting templates, clarity for how NDCs should integrate the voluntary carbon market and corresponding adjustments, and share of proceeds (% of revenues from carbon markets to finance climate adaptation).