Exploring the use of decarbonization and private money Egypt will open COP27 next month
A woman visits her flood-damaged home in southern Pakistan's Sindh province (AP).
The 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27), which discusses global warming countermeasures, will open in Egypt on November 6th. Consider expanding the use of private sector funds for the investments necessary for decarbonization of the world. Developed countries will raise the amount of decarbonization support for developing countries.
About 200 countries and regions that are members of the United Nations Framework Convention on Climate Change will participate in COP27. The session is scheduled to run until November 18th, and on the 7th and 8th, the Leaders Summit will be held. US President Biden is expected to attend. From the 14th, the ministers in charge will hold final discussions toward an agreement.
Last year's COP26 was chaired by the United Kingdom, which has taken the lead in environmental measures, and led discussions on reducing coal-fired power plants amid opposition from emerging nations. At COP27, developed countries intend to put together a work plan for reducing greenhouse gases by 2030 at a ministerial meeting. There are speculations that China and India also want to promote decarbonization. However, this time it will be held in Africa, which will put more pressure on developing countries to seek aid.
Support is not limited to the spread of renewable energy and energy-saving technology. The theme will also be how to provide aid for the damage and losses caused by heat waves, droughts, and floods that have already occurred due to climate change.
At COP15 in 2009, developed countries pledged to provide assistance to developing countries on a scale of 100 billion dollars (approximately 14.9 trillion yen) annually by 2020. However, by COP26, only about $80 billion had accumulated, and dissatisfaction spread among developing countries. This time, the focus will be on whether the promised amount can be achieved.
Another issue on the agenda is what kind of assistance will be provided after 2025. Given that the government's financial situation does not have enough slack, there is even a proposal to create a framework centered on private companies. As of 2020, 90% of decarbonization funds will be provided by public institutions and 10% by the private sector. The International Energy Agency (IEA) estimates that decarbonization by 2050 will require $4 trillion a year.
Themes include how to smoothly proceed with the "transition" to the food problem and decarbonization, and the shift of employment from the fossil fuel industry.
At COP26, each country was asked to increase their greenhouse gas reduction targets by COP27. In order to achieve the Paris Agreement goal of keeping the global temperature rise within 1.5 degrees above pre-industrial levels, it is essential that emerging and developing countries, whose emissions of greenhouse gases are rapidly increasing, take action. However, some developing countries have said that increasing support is a prerequisite for raising the target.
If no agreement can be reached this time, the division will become clear, and there is a possibility that developing countries will be shelved to deepen their reduction targets. The United Nations has warned that the current temperature could rise by 1.5°C within 20 years. If temperatures continue to rise, damage from drought and sea level rise will increase.
There is also movement in the financial sector, which has supported decarbonization from the perspective of ESG (environment, society, and corporate governance). The Glasgow Financial Union (GFANZ), which includes about 500 global financial institutions, will set out standards for decarbonization plans that companies should disclose. We have been discussing rules and disclosure standards such as what kind of companies and businesses we should invest in in order to achieve net zero greenhouse gas emissions by 2050.
There is also disagreement among financial institutions. Some US states and Australian financial institutions that produce fossil fuels oppose strict standards that would immediately stop investing in fossil fuels. Japan, where renewable energy and the restart of nuclear power plants are not progressing, also has a lot of power generation using fossil fuels, and some people are making similar claims.
As the world continues to experience extreme weather this summer, there is a common understanding that reducing greenhouse gases is an urgent matter. Russia's invasion of Ukraine changed the situation, and in addition to decarbonization, the current energy crisis has become an urgent issue. Substantial discussions that can overcome both crises are required.
