COP27 at Sharm el-Sheikh, is reported to have brought together over 45,000 participants, with the shared goal of finding ways to ease the catastrophic effects of climate change, by limiting global temperature rise to 1.5°C beyond pre-industrial levels. The event provided a forum to review climate ambitions, ventilate ideas, disseminate critical innovations, research, and best practices, and to initiate strategic partnerships. Being the first COP in Africa, expectations heading into the conference were that issues important to the global south, i.e., climate change financing, and the ravaging effects of climate change, on developing countries especially, were to be top of the agenda. However, the possibility of such expectations being tapered by the challenging geopolitical landscape of the Russia-Ukraine War, and the consequent energy crisis in Europe, as well as the breakdown of ties between the USA and China over Taiwan, were also forecasted.
Despite mixed feelings, COP27 made progress, some of which mimic expectations going into the conference. The fact that the decades-long conversation of establishing a loss and damage fund eventually came to fruition, the launch of the African Carbon Market Initiative, the emphasis on the need to accelerate financial support to developing countries by developed nations to address access to finance inequities, the call on the World Bank and other multilateral development institutions to be more aggressive with scaling up private capital mobilisation in blended finance schemes, and the reproach to developed nations in particular, on the temptation of using the global geopolitical situation and the energy crisis, as a pretext to sliding back on climate change commitments, are reminiscent of these reflections.
The conference witnessed several dozens of forums at different levels, on different themes, and across different sectors, but with the common denominator of winning the climate change fight. Participating on behalf of the Ghana Climate Innovation Centre, our Entrepreneurship, Partnership, and Investments Director, Dramani Bukari, who attended the conference with Roland Ganah, our Finance Officer, reflected on some of the conversations that took place at the conference. According to them, the sessions covered several important topics including regenerative agricultural, methane emission concerns, fossil fuel non-proliferation, insurance for climate resilience, voluntary carbon markets in Africa, the role of innovation, science, data, and research, biodiversity restoration, private finance mobilisation, circularity or circular economy practices, decarbonisation of transport, steel and cement sectors, just energy transition, climate-resilient infrastructure, loss and damage, green entrepreneurship, and inclusivity of business driven climate action, among others.
On accelerating private capital mobilisation for resilience financing, the team observed that discussions often highlighted effective pricing of climate risks, expansion of investor base, innovative financing instruments, growing the involvement of multilateral development banks and development finance institutions, and strengthening of climate data, as key solution points. The Alliance of CEO Climate Leaders, which involves over 120 global CEOs in 26 countries across 12 industries, and who have committed to delivering corporate climate action in line with the Paris Agreement, actively advocated for their peers to join in accelerating the transition to net zero, by setting science-based environmental targets, collaborating within and across sectors, and contributing to harmonising reporting standards. Whilst such initiatives can help to expand private capital investor base in developed nations, their effectiveness may still be tempered by the general lack of obligation and attention to ESG investing by corporates and investors in the global south.
Institutional investors such as insurance companies, impact investors, and philanthropic capital, were frequently mentioned to be crucial as well to scaling up resilience finance, although insignificant at present. Herein, the declaration by 85+ African insurance companies, including two insurance companies in Ghana (Ghana Reinsurance PLC and GN Reinsurance Company), under The Nairobi Declaration on Sustainable Insurance, to underwrite $14 billion of cover for Africa’s climate risks by 2030, can be said to be a major step forward. The increasing inclusion of carbon credits in the net zero efforts of many global companies, is seen to be a significant opportunity for African countries for driving development priorities. However, concerns around greenwashing and the integrity of some credits, fair distribution of value, paucity of expertise, and the complex and uncertain nature of regulatory frameworks, were noted to be capable of impeding the potential of voluntary carbon markets in Africa.
On biodiversity day, the conversations suggested that the current focus on emissions reduction and carbon sequestration to address climate change, was a narrowed approach to solving an interlinked environmental crisis. And that, a broader systems level approach, involving biodiversity conservation, would go beyond the slow down climate change to supporting resilient ecosystems. There were calls on governments and companies, to move beyond net zero commitments to nature positive ones, underpinned by bioprospecting, ecotourism, and biodiversity offset and tokenised markets. The voluntary biodiversity credit market is however deemed to be more complex and currently suffer from the lack of an agreed method of biodiversity quantification and standards, but organisations such as rePLANET UK are offering thought leadership in this light.
In the context of energy transition, activists’ groups mainly pushed the issue of oil non-proliferation treaty, on the backdrop of the recent energy crisis in Europe and the resulting flurry of deals to expand gas production and exports in countries such as Egypt, Senegal, Angola, and Republic of Congo. Despite the push, not much progress was made in this regard. Some blamed the lack of progress on the large presence of oil companies and lobbyist at this year’s COP. However, African leaders appeared to be unanimous on the position that the fossil fuel phase out needs to be gradual as the financial resources therein, are still needed to lift a large majority of its citizens out of poverty. The role of green entrepreneurship featured in the discussions but can be said to have been a shadow of itself in the scheme of events. Organisations such as SEED, held a few side events to highlight the potential and raise awareness on the challenges of sustainable businesses. They also presented the Sustainable SME Action Agenda, outlining five areas of support needed for accelerating the impact of the sustainable business sector, as well as launched the Coalition for Innovation, Circularity and Entrepreneurship.
At the invitation of GCIC’s Advisory Board Chair, Christina Stanton, the team also had the rare privilege of attending a side event at which Atlantic Ocean hosted Speaker of the US House of Representative, Nancy Pelosi. The discussion emphasised a number of issues including America’s strong commitment to leading the fight against climate change, referencing the landmark Inflation Reduction Act, 2022 and climate change commitments therein.
Overall, COP27 was exciting, and insightful, but tainted with exhaustion and mixed prospects. That said, we look forward to building forward better in partnership with various institutions and professionals encountered during the event.
