‘WTF’ is the big question at COP27

Welcome back. There was an extra burst of excitement here at COP27 yesterday with the arrival of Brazilian president-elect Luiz Inácio Lula da Silva in Sharm el-Sheikh. Lula met the climate envoys of the US and China, as part of a drive to persuade the world that “Brazil is back’” after what many viewed as the regressive tenure of Jair Bolsonaro, whom he will replace as president in January.

There was some serious tension at an event where Russian delegates were setting out their country’s climate policies. The discussion was repeatedly interrupted from the floor — including by Ukrainian activist Svitlana Romanko, who condemned Russia’s invasion of her country before being bundled away.

Meanwhile, at the G20 summit in Bali, wealthy nations offered Indonesia a $20bn package to help wean it off coal. Such deals have attracted criticism from some developing countries, who complain that the nations that have done least to move away from fossil fuels are receiving the most support.

So what is the best way to support these countries’ approach to climate impacts and the energy transition? That’s what I focus on below. And Patrick has a worrying update on the fight against plastic pollution.

See you tomorrow. (Simon Mundy)

COP27 day 9 in brief:

• EU green chief Frans Timmermans has thrown his support behind India’s call to include “phase out all fossil fuels” in the final COP27 text, as long as the commitment to ending coal, agreed at the last summit, is not undermined, our colleague Camilla Hodgson reports.

• Jailed Egyptian human rights activist Alaa Abdel Fattah has broken his hunger strike, according to a Twitter post yesterday from his sister Sanaa Seif, who has been in Sharm el-Sheikh lobbying for his release. Abdel Fattah had stopped drinking water at the start of COP.

• Molwyn Joseph, outgoing chair of the Alliance of Small Island States, told Bloomberg that the creation of a loss and damage fund was a “red line”. Without it, the group is prepared to leave the summit without endorsing a closing declaration.

Climate finance: How would you raise $2.4tn a year?

“WTF,” read the badge on the lapel of Mahmoud Mohieldin, the UN Climate Change High-Level Champion for COP27.

Beyond its better known meaning, the acronym stood for “Where’s The Finance” — a question that has been raised with growing urgency at this year’s COP, as developing nations struggle to fund low-carbon development while grappling with worsening climate impacts.

One of the most interesting contributions here in Sharm el-Sheikh has come through a new report from an expert group on climate finance launched by the COP27 and COP26 presidencies. Chaired by economists Vera Songwe and Nicholas Stern, it lays out some serious suggestions for how the enormous funding gap can be closed.

Its estimate of the new funding required is sobering. In developing countries excluding China, it says, investment of $2.4tn a year will be needed by 2030 — roughly triple the level of 2019.

The report stresses that about half the additional funds can be mobilised within the countries themselves — notably through strengthening capital markets and tax systems, and by scrapping or reducing fossil fuel subsidies.

Its focus, however, is on external finance — and it makes clear that there are some very low-hanging fruit here. The report adds to the pressure on the World Bank and other multilateral institutions, urging them to take a much more proactive stance on climate responses and the energy transition.

It calls for a redrafting of the institutions’ mandates, with mission statements that “clearly reflect environmental sustainability, given its fundamental impact on development”.

Like US climate envoy John Kerry, it warns that the institutions have been far too cautious in their capital management, and urges a more aggressive approach. And it asks rich countries’ governments to bolster the resources available to multilateral development banks — arguing that this could be done at relatively small cost to taxpayers, through instruments like guarantees.

There is also a strong focus on debt, a source of great economic stress for many developing nations. The report argues for easier access to liquidity for such countries — something that could dramatically lower the costs of their climate-related investments. And it calls for innovative approaches to climate risk — such as loan clauses that would grant repayment holidays for two years after a disaster hits.

As for the private sector, the report says that the Glasgow Financial Alliance for Net Zero has been an important step forward in galvanising action. But companies must do more, it says, to commit to increased investment in developing countries, while building serious partnerships with local partners. There can be no substitute for real understanding of the conditions and challenges on the ground. (Simon Mundy)

Quote of the day 

“Are you going to pay for the environmental damage you have caused in Ukraine?”

BBC climate editor Justin Rowlatt’s provocative question at Russia’s first public COP meeting yesterday, before he was removed by security guards.

Beyond COP27: Oceans in focus ahead of biodiversity summit

The fight to slow the trash washing into the world’s oceans was dealt a significant blow during the Covid-19 pandemic as fear of the virus reignited demand for plastics.

But the material, a top source of ocean pollution, is getting fresh attention at COP27. In a report released ahead of today’s biodiversity day in Sharm el-Sheikh, the Nippon Foundation Ocean Nexus Center said global efforts to reduce plastic pollution in oceans had failed.

Almost 14mn tons of plastics end up in the ocean each year, comprising about 85 per cent of ocean trash, according to the report. Plastics and their associated chemical additives are killing aquatic life and even harming humans as the additives travel through the food chain.

A crucial part of the problem is corporate accountability, the report said. Though specific companies are not named by the Ocean Nexus Center, the biggest producers have been oil major ExxonMobil, chemicals group Dow and Chinese oil refiner Sinopec.

“[The] current framing of the plastics crisis is heavily influenced by the plastics industry,” the report’s authors write, adding that the sector “creates alternative scapegoats” to deflect opprobrium. With help from lobbyists in Washington, big plastics companies have fought to dodge responsibility for ocean pollution.

When COP27 wraps up this week, the world’s environmentalists will turn their attention to the UN’s biodiversity conference in Montreal next month. One of its central goals is to sign up countries to conserve at least 30 per cent of the world’s oceans by 2030. To reach this, environmentalists are pressing governments to finish a UN treaty to protect the high seas, as climate and biodiversity concerns increasingly advance hand-in-hand. (Patrick Temple-West)

Smart Read & Listen

• Scientists say replicating nuclear fusion — the reaction that powers stars — on Earth could produce all the energy we’ll ever need, and take carbon out of the equation. The FT’s climate change columnist Pilita Clark discusses this and more on the FT’s Tech Tonic podcast. Listen to the star-power episode, or last week’s on the hydrogen hype.

• How is climate change affecting the Nile Delta, Egypt’s richest agricultural region? The FT’s Heba Saleh reports on declining yields and bouts of unseasonal heat from Kafr al-Batikh.