COP 27 review: progress amidst the setbacks

COP 27 review: progress amidst allianzgi.com the setbacks November 2022 The close of COP 27 (the UN Climate Change Conference) seems coloured by frustration at an apparent lack of positive outcomes. Yet looking past the negative headlines reveals some progress and reasons to be optimistic. However, genuine net-positive progress will require greater collaborative action from stakeholders. The concept of a “just transition” in tackling Matt Christensen climate change was high on the agenda Key takeaways Global Head at COP 27 leading to an agreement for a Sustainable and – High profile ideological strategic Impact Investing “loss and damage fund”1 to be established setbacks distracted from many for vulnerable countries. This was a major notable positive implementation highlight of the conference, however the achievements details of the agreement have yet to be fully – Many may struggle to see a net defined, but it certainly marked a positive benefit from COP 27, but the scale step and formal recognition of the need to of progress in areas like renewable align the financial burden with those countries energy highlights the significant which have both the financial means and the scope to accelerate progress if we footprint. Another welcome announcement reduce headwinds was Indonesia joining the Just Energy Transition Partnership2, which coincided with – We expect a greater focus on South Africa reporting its first-year progress biodiversity and “just transition” in update having adopted the approach at last 2023. year’s conference. While we welcome these positive outcomes, it Additional renewable energy capacity reached is important to note that the loss and damage record levels last year and there remains very fund is a function of the future trajectory of climate mitigation and adaptation, where strong momentum towards renewables as some elements appear to have stalled. This we approach 2023. Yet, this has been offset is where gross versus net progress kicks in. by the resurgence of fossil fuel demand and 1. https://www.unep.org/news-and-stories/story/cop27-ends-announcement-historic-loss-and-damage-fund. 2. https://www.iea.org/news/iea-welcomes-indonesia-s-just-energy-transition-partnership-as-key-step-forward-for- international-cooperation-on-energy-and-climate. Value. Shared.