Publication
The New Collective Quantified Goal on Climate Finance: Elements for Consideration
This paper was submitted to the UNFCCC in July 2024.
The C2ES team is headed to Sharm El-Sheik, Egypt, for the annual UN climate conference, along with tens of thousands of other attendees, including government officials, representatives of intergovernmental organizations, business leaders, civil society observers, and journalists.
Like its predecessors, COP27 (short for the 27th “Conference of the Parties,” under the auspices of the UN Framework Convention on Climate Change, or UNFCCC) might best be described, with apologies to Churchill, as a climate negotiation, wrapped inside a conference, inside a trade fair. But in truth, the negotiations themselves—once the heart of the conference—are waning in importance. Since the Paris Agreement was concluded in 2015, and especially after last year’s talks in Glasgow finalized the Paris “rulebook” providing guidance to Parties on issues like measuring and reporting progress toward meeting their targets, there are fewer details for governments to decide.
Instead, the talks in the inner rooms of the COP are being eclipsed by the meetings in the halls outside them. Those side events have an increasingly important focus: the “action agenda,” or the concrete steps countries and companies must take to meet the goals they have set.
At COP26 last year, the combination of the European Union’s leadership on policy and the renewed diplomatic vigor of the United States helped lead to more ambitious targets for 2030, as well as new mid-century goals to reach net-zero emissions—the point when greenhouse gases emitted into the atmosphere will be balanced by the carbon dioxide being removed and permanently stored. Modeling estimates suggest that meeting those net-zero targets (as well as the 2030 pledges) would yield better-than-even odds of limiting warming below 2 degrees Celsius, in line with the upper end of the Paris Agreement’s temperature goal.
The reality of policy, however, has not yet caught up with the rhetoric of ambition. Those same models project that policies currently on the books will likely lead to temperatures rising between 2 and 3 degrees. Temperatures are currently 1.1 degrees above preindustrial levels and continuing to rise. As a result, what is urgently needed now is a pivot to implementation—one that must occur at an exponentially faster speed and scale than we are seeing.
This new focus on concrete action opens a critical pathway for the private sector, along three dimensions:
The COPs must adapt to this new context by creating channels for corporate engagement that support and accelerate this pivot to implementation. In practice, that means organizing the conferences around the action agenda: The side events should take center stage, while the negotiations become the side event. It means strengthening the new ways for the private sector to engage with countries on implementation, including the High-Level Champions created after the Paris conference to serve as liaisons with businesses and other non-Party stakeholders.
Most importantly, the UNFCCC must take advantage of the global stocktake (GST) established by Article 14 of the Paris Agreement: a periodic assessment of global progress in emissions reductions, adaptation, and climate finance that is to take place every five years, beginning next year in 2023. The agreement gives broad discretion as to the design of the GST, making it the perfect vessel for business involvement, and last year’s COP26 specifically encourages the engagement of non-Party stakeholders.
The GST creates an opportunity for a new mode of interaction at the COPs—not countries haggling among themselves over brackets and commas, negotiating over text, but governments coming together with the private sector to share information, knowledge, and experience: Which policies have succeeded and which have failed? Which investments are most effective at accelerating technology deployment, where public-private partnerships can make further progress?
The most important issue at stake COP27 is the continued pivot to implementation. The success of the Paris Agreement depends on it.