The U.N. Climate Conference 2022 (COP27): Outcomes
December 19, 2022
The U.N. Climate Conference 2022 (COP27): Outcomes
The 27th Conference of the Parties (COP27) to the United
U.S. GHG Mitigation Pledges in Its NDC
Nations Framework Convention on Climate Change
(UNFCCC) met November 6-20, 2022, in Sharm el-Sheikh,
In 2021, the United States communicated a nonbinding pledge
Egypt. Over the course of two weeks, Parties to each of the
“[t]o achieve an economy-wide target of reducing its net
three primary international treaties and agreements on
greenhouse gas emissions by 50-52 percent below 2005 levels
climate change (the 1992 UNFCCC, the 1997 Kyoto
in 2030.” This “exceeds a straight-line path to achieve net-
Protocol, and the 2015 Paris Agreement [PA]) took part in
zero emissions, economy-wide, by no later than 2050.”
negotiations. Several issues received particular attention,
Distinct from its NDC pledge, the Biden Administration also
including (1) the realism of avoiding a global temperature
has pledged to achieve net zero emissions by 2050.
increase of 1.5° Celsius (C) above the pre-industrial level
and how to phrase related policy language; (2) the provision
of climate finance to assist developing countries to mitigate
Demand for climate finance, including adaptation
greenhouse gas (GHG) emissions and adapt to climate
finance, exceeds delivery
change; and (3) the establishment of new funding
The Sharm el-Sheikh Implementation Plan largely repeated
arrangements to assist vulnerable countries with addressing
the call of the PA and the Glasgow Climate Pact to
the loss and damage associated with the adverse effects of
mobilize and provide for the climate finance goals of past
climate change, including extreme weather events and slow
negotiations. It also highlighted that “delivering such
onset events. The principal decisions from COP27 were
funding will require a transformation of the financial
procedural. They were laid out in the “Sharm el-Sheikh
system and its structures and processes, engaging
Implementation Plan” and additional decisions, currently in
governments, central banks, commercial banks, institutional
advanced unedited versions.
investors and other financial actors.”
Selected Outcomes at COP27
At COP16 in 2010, developed country Parties pledged to
achieve a goal of mobilizing jointly $100 billion in climate
GHG emission pledges and implementation are not
finance per year by 2020. The COP21 decision to carry out
on track to achieve Paris Agreement aims
the PA reiterated this $100 billion pledge. That decision
The language of the COP27 decisions largely repeated the
also called for continuing this collective mobilization
temperature-aim language of COP21 PA and the COP26
through 2025 and for setting, prior to the 2025 meeting, a
Glasgow Climate Pact. It requested Parties to revisit and
new collective quantified goal for mobilizing financial
strengthen their 2030 Nationally Determined Contributions
resources of not less than $100 billion annually beginning
(NDCs) by the end of 2023. Parties agreed to a new work
in 2026. Further, the Glasgow Climate Pact called on
program through 2030 to seek stronger GHG mitigation
Parties to at least double their collective provision of
action.
climate finance for adaptation assistance from 2019 levels
by 2025 (i.e., to an estimated $40 billion annually).
At COP27, some Parties debated the realism of avoiding a
1.5°C increase in global temperature compared with pre-
While assessments vary, most agree the climate finance
industrial levels or “keeping 1.5°C alive,” on which COP26
pledge has not been met and may not be met until at least
focused. The PA’s temperature aim is “[h]olding the
2023. A report released during COP27 by the UNFCCC
increase in the global average temperature to well below
Standing Committee on Finance estimated climate finance
2°C above pre-industrial levels and pursuing efforts to limit
provided and mobilized by developed countries for
the temperature increase to 1.5°C above pre-industrial
developing countries was $83.3 billion in 2020, an increase
levels.” Researchers estimate that to avoid overshooting a
of 4% from 2019 but $16.7 billion below the goal. Of the
1.5°C increase, global GHG emissions would need to
$83.3 billion, an estimated $28.3 billion was for adaptation.
decline by 43% (uncertainty range: 34%–60%) by 2030
compared with the 2019 level. In contrast, Parties’ GHG
U.S. Pledged and Delivered Climate Finance
pledges, if achieved, may lead to 2030 GHG emissions
President Biden, in 2021, pledged $11.4 bil ion annually, by
0.3% below the 2019 level (uncertainty range: -6.6% to
2024, for the U.S. publicly funded contribution to climate
+6.0%). According to the UNFCCC’s October 2022 NDC
finance. Congress, as of September 30, 2022, provided budget
Synthesis Report, “the best estimate of peak temperature in
authority of not less than $1.1 bil ion of public finance for
the twenty-first century [if current pledges were achieved]
FY2022 (P.L. 117-103; Consolidated Appropriations Act,
... is in the range of 2.1°C–2.9°C depending on the
2022).
underlying assumptions.” Many Parties likely view Brazil,
China, India, Russia, and sometimes the United States as
candidates to strengthen their GHG mitigation pledges.
https://crsreports.congress.gov
The U.N. Climate Conference 2022 (COP27): Outcomes
There is general agreement among Parties that the demands
Selected U.S. Issues at COP27
for climate finance are many times higher than the current
mobilization pledge of $100 billion annually. Some
Investments in natural gas and alignment with the
estimates of demand are in the trillions annually. Others
aims of the Paris Agreement
argue that these higher estimates of financing needs include
The Sharm el-Sheikh Implementation Plan repeated the
broad developmental goals, or possibly income transfers,
COP26 Glasgow Climate Pact’s call for “accelerating
and may not be investments aimed strictly at addressing the
efforts towards the phasedown of unabated coal power and
incremental impacts of GHG-induced climate change.
phase-out of inefficient fossil fuel subsidies.” At COP27,
India proposed to expand this phasedown call to all fossil
Beyond the $100 billion pledge, Parties included a call in
fuels. However, the recent curtailment of Russian gas
the COP27 decisions to reform the existing international
supplies to Europe, and the rise of energy prices globally,
financial architecture, in particular, the International
have increased the use of coal-fired electricity and
Monetary Fund and the multilateral development banks.
investment in new natural gas capacity above anticipated in
Proposals for institutional reform of climate finance could
some countries’ GHG mitigation plans. At COP27, Egypt,
take many forms, including (1) offering only grants as
Nigeria, the United Arab Emirates, and other gas-producing
opposed to non-concessional debt instruments; (2) allowing
countries promoted increased production and export of
countries to access funding irrespective of per capita
natural gas to Europe and elsewhere as a “transition fuel”
income; (3) extending debt maturities and applying more
toward zero-emitting options; the United States and others
affordable interest rates; and (4) suspending debt for
announced investments in new natural gas facilities. These
countries facing loss and damage events, potentially by
circumstances raised questions about the consistency of
redirecting debt servicing payments to climate resilience
energy security efforts with GHG mitigation pledges.
and energy transition investments (sometimes referred to as
“debt for climate swaps”).
China’s role and effort
During the November 2022 G-20 meeting, the United
Process continues regarding financing
States and China announced resumption of their bilateral
arrangements to address loss and damage
dialogue on climate change. The United States and other
The Sharm el-Sheikh Implementation Plan noted, “with
developed country delegations at COP27 were largely allied
grave concern…the growing gravity, scope and frequency
about (1) pressing China to strengthen its pledge to abate its
in all regions of loss and damage associated with the
GHG emissions, currently set to peak carbon dioxide
adverse effects of climate change, resulting in devastating
emissions before 2030; (2) resisting China’s positioning of
economic and non-economic losses, including forced
itself as a “developing country,” thereby taking advantage
displacement and impacts on cultural heritage, human
of flexibilities and climate finance afforded these countries;
mobility and the lives and livelihoods of local
and (3) confronting China’s policies and practices that may
communities.” After years of debate over ways to respond
provide it economic and trade advantages.
to loss and damage, Parties formally decided to establish
“new funding arrangements” to provide for and mobilize
Trade concerns
“new and additional resources, and that these new
The PA recognizes that each country may design its
arrangements complement and include sources, funds,
strategies in line with domestic circumstances and
processes and initiatives under and outside the Convention
preferences. At the same time, certain policy approaches
and the Paris Agreement.” “[I]n that context,” Parties
raise trade concerns among countries. For example, the
decided “to establish a fund ... whose mandate includes a
Director-General of the World Trade Organization praised
focus on addressing loss and damage.” Parties created a
free trade in support of the PA goals but warned against a
new Transitional Committee to develop recommendations
“subsidy war” among countries. Subsidies have long been a
on the funding arrangements and the fund and requested the
subject of complaint against China and have arisen
Secretariat to hold workshops and deliver a synthesis report
concerning the U.S.-enacted P.L. 117-169, often referred to
for consideration at COP28 in November 2023. Further,
as the Inflation Reduction Act of 2022 (IRA). The EU, the
two initiatives were launched to help address loss and
Republic of Korea, and others expressed concern about
damage: the Global Shield against Climate Risks, largely an
domestic content requirements for electric vehicle tax
insurance, assistance, and capacity-building approach, and
credits under IRA. President Biden, in meetings with
the U.N. Secretary-General’s Early Warnings for All to
European leaders, stated that he may revisit the
extend early extreme weather warning systems to all
implementation of these provisions, and the EU is
countries, especially those in Africa.
considering new subsidies. In another policy example, the
EU is working on a Carbon Border Adjustment Mechanism
The European Union (EU) tied its support for a new loss
(CBAM) that would levy fees on imports of GHG-intensive
and damage fund to deepening GHG reduction
goods. Though the United States and China have expressed
commitments, a view that did not prevail. The United States
concerns about the EU’s CBAM, similar measures were
and some other countries continue to oppose any legal
proposed in the 117th Congress (e.g., H.R. 4534 and S.
structure tied to compensation or liability, consistent with
4355).
the provision in the COP21 decision to carry out the PA. In
addition, the United States, the EU, the group of Small
Richard K. Lattanzio, Specialist in Environmental Policy
Island States, and others hold that China, India, and all
Jane A. Leggett, Specialist in Energy and Environmental
high-emitting countries should be among those contributing
Policy
funds to address loss and damage.
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The U.N. Climate Conference 2022 (COP27): Outcomes
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