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Egypt's Foreign Minister Samih Zhukri (l) speaks during the closing ceremony at the COP27 climate summit in Sharm el-Sheikh.
What We’re Watching: Climate comp fund, Malaysian coalition building
COP27 delivers on reparations but fails on fossil fuels
Two days behind schedule, the COP27 climate summit in Sharm el-Sheikh, Egypt, finally wrapped up with a historic agreement on Sunday. Wealthy countries will pay poor nations for the economic damage caused by climate change. The so-called "loss and damage fund" will compensate the developing world for impacts like droughts and flooding, which rich nations led by the US had resisted for 30 years. But so far it's only a political statement of intentions with no financial commitment, so it'll be up to future COPs to work out the details. What's more, climate activists' joy over the much-awaited reparations deal was overshadowed by a lack of progress in cutting fossil fuels. Efforts to include stronger language on phasing out oil and natural gas on top of coal were rebuffed by top fossil fuel producers as well as by major guzzlers in the developing world who won't jeopardize their economic growth to embrace renewables. In other words, a victory for climate justice but a painful defeat for clean energy at a COP where expectations were low.
Get more COP27 insights from Eurasia Group analyst Franck Gbaguidi on our Instagram and YouTube channels.
Nationalist bloc might take power in Malaysia
As expected, Malaysia's general election on Saturday delivered a hung parliament without a clear winner. But there were plenty of losers. The opposition multiethnic alliance led by former PM Anwar Ibrahim won the most seats (80) but fell far short of a majority in the 222-member parliament, while the once-dominant UMNO party got its worst result ever with only 30. And perhaps the biggest upset was 97-year-old ex-PM Mahathir Mohamad losing his seat — his first election defeat in 53 years. Meanwhile, a Malay-first alliance captained by Muhyiddin Yassin, yet another former PM, overperformed with 73 seats. Muhyiddin is now favored to return to the premiership after clinching the support of two regional parties from Borneo and is wooing UMNO, but Anwar says he should have a go first. Who'll make the call? The current king under Malaysia’s unique rotating monarchy, who has the constitutional power to appoint the next PM and wants a name by Monday.
The world’s largest plastic waste pyramid is revealed in Egypt ahead of COP27 in Sharm el-Sheikh.
What to expect from COP27: “It’s pretty grim”
Last year’s COP26 summit in Glasgow, Scotland, where central governments and the private sector worked together in unforeseen ways, gave us reason to hope for climate progress. Nearly 200 countries gathered to agree on details of the Paris Agreement with an eye toward limiting global warming to 1.5 degrees C. This year was meant to be all about implementation.
But in the last 12 months, the world’s been rocked by war in Europe, soaring inflation, and deepening political and economic divides between rich and poor countries. As world leaders descend this weekend on the Egyptian resort city of Sharm El-Sheikh for the COP27 climate summit, climate warriors are wondering what can be done at this pivotal moment to save the planet.
We spoke with our very own climate expert, Eurasia Group’s Vice Chairman Gerald Butts, for a reality check on the goals and possibilities for this year’s COP27. The interview has been edited for length and clarity.
Last year's COP26 produced some highly ambitious goals. What kind of progress has been made thus far on those goals?
Not a lot, unfortunately. I think that most governments have been distracted by the economic fallout from the war, and those directly involved in the war have been distracted by that. So I think it's been a suboptimal year, to say the least, in climate progress, with the one notable bright spot of the Inflation Reduction Act in the United States, which is the first serious stab at tackling the US domestic emissions problem that we've seen. So one big bright spot, and a lot of backsliding
What are the broad goals for this year's conference? What would success look like?
The advanced billing was that it was going to be an attempt to knit together north and south. And, unfortunately, I think the fault line between northern wealthier countries that emit a lot and the developing world, which historically has not emitted a lot, is going to be bigger than ever in Egypt and that will probably feature prominently in the daily coverage. There will be a big focus on climate finance and greenwashing — expect a bunfight on this front.
To what extent has the war in Ukraine impacted global climate goals?
I think the war in Ukraine will ultimately expedite the energy transition from fossil-based energy to renewables. But in the short term, there's no doubt that it's leading to an increase in the use of fossil fuels to create energy, particularly in Europe. And the most pernicious aspect of climate change emissions is that they persist for a long time in the atmosphere. So you're seeing a lot of coverage where people are saying, “these are temporary increases in emissions in Europe,” but they're not temporary to the atmosphere. That's the key point. They may ramp back down in a couple of years, but the consequences will be there for a very long time.
Do you expect that to shift at all in the coming year? What is the outlook for Europe’s transition away from fossil-based energy?
I think that the geopolitics of Russia's energy leverage over Europe has brought into sharp relief for European governments how ill-advised that was in the first place. And given that Europe does not have a large domestic store of fossil-based energy, it's underscored how important the energy transition away from fossil is in Europe. And European policymakers have really latched onto it. They're going to spend a lot of money to execute it, and it's going to be an expensive fast transition as governments try to manage large increases in energy prices in the short term. There's no doubt that the energy transition is happening and that people underestimate how disruptive it's going to be. The countries that are trying to push fast forward on an energy transition will endure the price spikes. So in a nutshell, it's going to be a lot bumpier than people expect it to be, and it will eventually happen, but there will be a lot of political fallout and turmoil.
Last year, the US and China signed a joint declaration on Climate Action. Is that cooperation in jeopardy today? And what does that mean?
Oh yeah, big time. I think it's part and parcel to the larger structural change in the US-China relationship, where they both see each other primarily as competitors rather than as strategic partners. In the past, the climate as an issue had been set aside from that change, but it's inevitably been sucked into that maelstrom.
This means you don't have the top two emitters and two largest economies cooperating any longer on climate change. I think it's become, for both countries, a field of competition rather than cooperation, which is again something we've been saying was inevitable at Eurasia Group Asia for a long time, but you're seeing it in full force now.
One of the biggest-picture issues that'll be in the background of every conversation at COP27 is the global competition for the rare earth minerals that go into making up the battery supply chain for everything from electric vehicles to storage for electricity grids. The Chinese are way ahead, and the North Americans — including Canada and Mexico — have lately stepped up their efforts to catch up. But we see this as a resource race where large dominant economies are competing with one another to secure a long-term supply of critical minerals that they think will be of strategic economic and security value over the mid to long term.
What other contentious issues will COP27 participants face?
I think the big issue is — and this was brought into sharp relief with the floods in Nigeria and Pakistan — that the developing world is saying, "We didn't cause this problem, but we're dealing with its most severe consequences, and under the loss and damage provisions that the north has signed onto repeatedly, but failed to deliver on, it's time for you guys to pay up.” And the north is going to show up without a lot of money.
As a veteran of several COPs, that's a dynamic that you see all the time, and I think the patience is wearing thin in the south, especially as they see all of this investment get sucked into the United States because of the IRA.
What do you think of Egypt playing host? How will that go down?
There's going to be a lot of bad publicity for Egypt during the course of the COP, in particular on political freedom issues. There are organizations trying to highlight the prevalence of political prisoners in Egypt. And of course, Sharm El Sheikh itself is known as a playground for wealthy Europeans and Middle Easterners. In some ways, having it in an African country so close to Europe is inviting comments on the global divide between north and south.
And finally, where does the world stand on climate targets, and what is your biggest fear?
Everybody’s way off their targets and a lot of very hard heavy lifting is required to get us anywhere near keeping 1.5 degrees alive. And right now we're somewhere in the mid-2’s depending on which projection you look at. And you only need to look around the world to see the manifestations of 1.2 degrees of warming, which is where we are, to know that the next 20, 30, 40, 50 years are going to be really difficult ones, in particular for people who live near the equator, which is most of humanity.
What worries me most is that we're entering a world where even the wealthy countries that can, to a certain extent, use their wealth to insulate themselves from the most severe impacts of climate change, aren't really doing it. It requires us in democratic societies to do things that we're historically not very good at, which is to think long-term on things like infrastructure and to make investments accordingly.
What keeps me awake at night is the migration crisis. I think that a combination of adverse heat events, flooding, and sea level rise will create numerous migration problems over the next 20 years that we have shown ourselves as a global community singularly inept at dealing with.
Sorry to be a downer, but it's pretty grim out there.
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Egypt wants COP27 to be all about implementation
Later this year, Egypt will be hosting the COP27 Climate Summit. What does the gathering hope to accomplish at such an uncertain time for climate action?
It's time to go from pledges and commitments to implementation, Egyptian Minister for International Cooperation Rania al-Mashat says during a Global Stage livestream conversation hosted by GZERO Media in partnership with Microsoft.
"We want it to be an implementation COP," she explains. "And for that to happen, there needs to be a way for all the private-sector commitments that were made in Glasgow to make their ways to countries. And the only way to do that is if more climate finance ... is presented to actually de-risk some of the private-sector investments."
Despite the ongoing conflict in Ukraine, Al-Mashat believes climate is still a common-denominator issue for the entire world. For instance, the war is having a huge impact on food security.
The key, she adds, is nevertheless to show the private sector that it's safe to invest in things in climate partnerships with the private sector that can be scaled up.
Watch more of this Global Stage event: Live from Washington, DC: Financing the Future
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