The 27th Conference of the Parties on climate change opened in Sharm El-Sheikh, Egypt, on 6 November 2022, bringing countries together to monitor progress on their climate goals. COPs are controversial, and some chose not to attend this year’s – but what remains true is that they are the only place where the international community comes together en masse to discuss climate change.
Although 90% of the world’s GDP is now covered by net zero targets, recent reports by UNEP and the UNFCCC have shown that these targets are not on track to being met and that even if they were, they are highly insufficient as they would only put us on the path for 2.8°C warming. According to the UN bodies, then, global emissions must be reduced by 45% compared with current policy projections if we are to limit global warming to 1.5°C – the UNFCCC has put this clearly in writing:
“The latest IPCC scenario data set does not contain scenarios of still reaching the goal of 1.5°C with low or limited overshoot after 2030 if emission levels are kept in line with those based on implementation of the current NDCs up until 2030.”
We are not on track.
At COP26, Parties were urged to “revisit and strengthen” their 2030 emissions reduction targets and strategies in line with 1.5°C, but many have yet to do so. Whilst setting ambitious targets remains crucial, countries must also effectively implement these if they are to have any meaningful effect. With COP27 having been hailed as the “Implementation COP,” it fortunately seems like that message has begun to be heard.
Climate tech COP27 factsheet
- Agriculture & food systems
With the global food system responsible for over a third of global emissions, it was good to see the sector represented at this year’s COP.
Both the Food and Agriculture for Sustainable Transformation (FAST) and the Initiative on Climate Action and Nutrition (I-CAN) initiatives were launched. Respectively, they are aimed at driving investment in the agrifood sector, particularly for small-scale producers in developing countries who only currently receive 1.7% of climate finance, and at recognising the interconnectedness of healthy, nutritious diets and climate change by underlining the co-benefits between improved nutrition and emissions reduction.
This was welcomed by many companies within the industry, particularly so by Tessa Clarke, cofounder and CEO of OLIO. OLIO is an app that connects people to each other to share unused food instead of throwing it away, so Tessa was particularly happy to hear food waste specifically mentioned in multiple sessions. The 123 Pledge was launched, for example, aiming to reduce food loss and waste – collectively, it is responsible for more than four times the greenhouse gas emissions of all of the annual aviation sector’s combined. If food waste were a country, it would be the third largest emitter of greenhouse gases (GHGs) globally. Though these types of initiatives are important, Tessa calls for the proper integration of food systems and food waste in the main negotiations themselves – the global food system will be hard to decarbonise, but it is crucial that we don’t ignore the problem and tackle it head on.
On top of the climate mitigation potential, it is important we see agriculture and food systems through the adaptation lens as well. As climate change deepens and weather events and natural disasters get more frequent, food producers are finding themselves in an increasingly difficult position, threatening sustenance and livelihoods. Ironically, the global population reached 8 billion during COP27, and it could reach 10 billion by 2050 – which means that we urgently need to find sustainable ways to feed an ever-growing global population.
Gardin’s Lead Data Scientist Julian Godding explains: “The global food system is extremely vulnerable to changes in weather patterns and, in particular, drought.”
Gardin has developed a crop monitoring platform to empower stakeholders to forecast, predict and prepare for such drought events and to help mitigate negative impacts.
“Moreover, indoor farming will play a crucial role in securing nutritious food supply as the impacts of climate change limit the reliability of outdoor agriculture,” Julian adds. “Leaders must assess the resiliency of the food system and begin plans for ensuring global access to nutritious food in the face of climate risks.”
It is crucial we keep developing solutions like Gardin’s, so it has also been good to see the Agriculture Innovation Mission for Climate (AIM for Climate) doubling its funding commitment from $4bn to $8bn to support the development of sustainable agritech and food systems and accelerate innovation.
The maritime shipping industry is responsible for transporting 90% of global goods trade and is also responsible for 3% of total global emissions, according to the OECD. The US and Norway have launched the Green Shipping Challenge to accelerate green fuel production, green shipping corridors, zero-emissions vessels, the decarbonisation of ports, and more.
The UK specifically has announced a roll-out of green shipping corridors with Norway, the US, and the Netherlands. As Oceanways founder and CEO Dhruv Boruah underlines, for green shipping corridors to scale, having accessible clean fuel in both the port of origin and the port of destination is essential to achieving zero-emission shipping. And Oceanways is doing just that – they’re using green hydrogen as a fuel, but also transporting it as a cargo to harbours for other vessels to use, which is helping the harbours decarbonise.
The green hydrogen and shipping sector have also come together and published a statement on their joint future, emphasising that decarbonisation of the maritime sector will require about 5 million tonnes of green hydrogen by 2030 and that close collaboration will be crucial. The statement calls for national governments and the International Maritime Organisation to set a 100% emission reductions target for the maritime sector by 2050, with robust interim targets, to increase the number of green shipping corridors, and to draft policy incentivising at least 5% zero-emission fuels use by 2030.
According to Dhruv, one of the major problems with green hydrogen, however, is its transportation cost. A catch-22 exists in the green hydrogen market; with its availability and costs, there is high risk to the producer without committed demand from buyers, but also high risk for buyers without security of supply from producers. Oceanways hopes that their lower-cost submarine transport solution will enable producers to start selling smaller amounts of hydrogen, adding more of their submarines to their fleets as demand and supply ramp up.
The International Civil Aviation Organisation (ICAO) has reaffirmed its commitment to net zero carbon emissions by 2050, though as Conor Farrington, head of communications and marketing at SATAVIA, underlines, this “goal remains a non-binding aspirational goal rather than a firm set of commitments from member states and other ICAO member organisations”.
SATAVIA is using cutting-edge data science and atmospheric modelling technology to optimise flight planning and prevent aircraft condensation trails, or contrails. Contrails are the white clouds that you see trailing aircrafts in the sky – they reflect heat downwards and cause surface warming, which causes up to double the climate impact of aircraft engine emissions. Overall, contrails are responsible for up to 60% of aviation’s climate impact, or around 2% of all human climate impact. Contrail climate impact is more complicated than direct engine emissions, however, since only a small minority of flights (around 5%) cause up to 90% of climate footprint, whereas almost all flights currently generate CO2 emissions. According to SATAVIA, the aviation industry has yet to understand the extent of its non-CO2 footprint:
“Without managing non-CO2 effects that arise principally from aircraft contrails, aviation can at best reach ‘carbon neutral’ rather than ‘climate neutral’ operations,” explains Conor.
Conor also points out a lack of clear policy and related price signals encouraging aircraft operators to adopt contrail prevention in day-to-day operations, although he is hopeful this will change in the next couple of years.
COP27 also saw the publishing of the SAF Pocket Guide for Corporate Customers, aimed at incentivising businesses to purchase Sustainable Aviation Fuel (SAF) for their corporate travels and signal increasing demand. According to this analysis, SAF has the potential to reduce up to 60% of global emissions, but only represents 0.1% of global fuel consumption today.
But SAF is not the only fuel being explored in the aviation industry’s strategy for decarbonisation. Green hydrogen, for example, is often praised for its potential as the only real emission the fuel would produce is water vapour (apart from trace particulates arising from the working of the engine). The caveat, however, is that water vapour at altitude is exactly what causes contrails. Conor cautions that “it is therefore important to avoid treating new fuels and propulsion systems as silver bullets to solve aviation’s sustainability challenge”.
BNEF has just published its 2022 Zero-Emission Vehicles Factbook, in which it reports that electric vehicles are expected to avoid almost 1.7m barrels of oil use per day in 2022 and eliminate 152 million metric tons of CO2 per year. Though extremely encouraging, the report does also point out a growing gap between developing and developed countries in adoption of EVs. This reaffirms the need for international collaboration to ensure a truly global transition, and the need for more national governments and auto-manufacturers to make clear commitments on ending the sale of internal combustion engine vehicles.
In the same vein, the Zero Emission Vehicles Transition Council (ZETVC)’s 2022 Action Plan was published and the Low Carbon Transport for Urban Sustainability (LᶜO₂TUS) and Accelerating to Zero Coalition (A2Z) were launched. 214 signatories have committed to 100% zero-emission vehicle sales by 2040, and 2035 in leading markets, and the initiatives include support for developing countries, aiming to mobilise technical assistance, drive investment and support effective policy. The LᶜO₂TUS initiative also specifically identifies the need to focus on informal transportation in emerging markets – a crucial step forward for realistic net zero transitions in many developing economies.
Indeed, as Simon Davis, co-founder and CEO of OX Delivers underlines, working in emerging markets and developing economies implies the need for context-specific solutions – Western solutions are not one-size-fits-all. Simon points out that transport as a concept is very different from place to place; in the West, transport vehicles are generally seen as products, which many people own individually. On the African continent, however, shared transport, including mobility-as-a-service, constitutes the future of mobility, as vehicle penetration is very low. Because EVs are expensive to produce and to buy, but cheaper to operate than internal combustion engine vehicles, shared transport and mobility-as-a-service models are beneficial to accelerating the net zero transition, as switching to EVs make a lot more sense for both the operators and the customers.
Adapting to this context, OX Delivers has developed zero emissions pay-as-you-go trucks and a clean transport ecosystem for rural Rwanda, supporting people who have no individual car through the creation of an affordable, shared transport system.
Contributing a whopping 40% of global emissions, the built environment plays a crucial role in global decarbonisation. Unfortunately, the UNEP has recently concluded that the built environment is off-track in reaching its net zero by 2050 goal. A new Built Environment Breakthrough Outcome has launched, aiming for all new projects completed from 2030 to be net zero carbon with more than 40% reduction in embodied carbon. Keeping in mind the intrinsic link between the built environment and energy sectors, governments must strengthen policies on energy efficiency and procurement policies – but the private market also has a crucial role to play.
The Paris Aligned Asset Owners published their first Progress Report on their commitment to achieving a net zero portfolio by 2050 and increasing investment in climate technology, and the Net Zero Asset Managers’s latest targets estimate that about $21.8 trillion of assets should be net zero by 2050. The concrete and cement industries have joined the First Movers Coalition, committing to purchasing at least 10% of near-zero concrete and cement every year by 2030, creating important market signals that will hopefully translate into more supply.
According to The International Energy Agency’s latest SDG7 tracking, 733 million people globally still had no access to electricity in 2020, and 568 million of these people were based in Sub-Saharan Africa. Pointing out the abundant wind, solar, hydro and geothermal energy resources available on the African continent, the COP Presidency has launched the Africa Just And Affordable Energy Transition Initiative (AJAETI) to translate opportunity into reality. The initiative will aim to increase access to affordable electricity and clean cooking, and expand renewable energy across the continent.
Renewable energy has a unique part to play in today’s political climate. A recent report by IRENA has emphasised the urgent need for a global renewable energy transition, particularly in light of the uncertain geopolitical situation and the resulting energy crisis and economic downturn. As Jo Parker-Swift, founder and CEO of Solivus says, this transition will take place “not just because we need to reduce greenhouse gas emissions but because it makes economic sense for individuals, businesses and governments to choose energy security and energy independence at the lowest possible price”.
Solivus has developed lightweight solar solutions for both homeowners and commercial buildings, particularly for rooftops unable to take the weight of conventional solar. The launch of the Global Renewable Alliance will bring the renewable energy sector together under a single unified voice, and the launch of The Planning for Climate Commission will work to improve planning and approval processes for renewable energy and green hydrogen projects.
Hydrogen was also at the forefront of the energy discussions. A recent analysis by the Africa Green Hydrogen Alliance (AGHA) has concluded that by 2050, green hydrogen could increase the GDP of Egypt, Mauritania, Kenya, Morocco, Namibia and South Africa by up to $126bn and could create up to 4m jobs. The AGHA is calling for strong international collaboration in this transition, which is estimated to cost between $450bn and $900bn between now and 2050.
The Africa Carbon Markets Initiative (ACMI) has launched with the aim of producing 300 million African carbon credits every year by 2030, which would represent a huge economic opportunity for the continent (reportedly $6bn in income and 30 million jobs) and a tangible way forward for Africa’s net zero transition financing. Aware of the concerns posed by an uncertain regulatory landscape, integrity of said carbon credits, and distribution of the resulting revenue, ACMI plans to connect countries with technical and financial support, work with standards on the measurement, reporting and verification of carbon credit projects, and scale the market.
The Carbon Dioxide Removal Breakthrough has been launched, with the aim of scaling carbon removals to remove 3.5bn tonnes of carbon per year, 500m tonnes of which must be stored for at least 100 years. This Breakthrough encourages the use of localised and community-conscious portfolios of carbon removal solutions, including sustainable agriculture, mangrove restoration, seaweed production, afforestation and reforestation, the scaling of Direct Air Capture (DAC) and Bioenergy with Carbon Capture and Storage (BECCS), biochar, and enhanced weathering, amongst others. The Breakthrough has also called on investors to invest in carbon removals, hoping to reach $130bn per year by 2030.
The COP Presidency has also launched the Enhancing Nature-based Solutions for an Accelerated Climate Transformation (ENACT) initiative as part of a crucial climate mitigation and adaptation strategy. ENACT will aim to strengthen both collaboration and coherence surrounding nature-based projects, facilitate information-sharing and best practices, and accelerate investment into nature-based solutions.
A group of organisations launched the High-Quality Blue Carbon Principles and Guidance report – blue carbon can be understood as the marine ecosystem, as well as mangrove forests, tidal marshes or seagrass meadows, amongst others. These natural ecosystems act as powerful carbon sinks – which explains the fact that demand for blue carbon credits has increased. The report makes recommendations, based around five principles, on how to ensure that blue carbon credits are of high-quality and are healthy for both people and planet.
At COP26, the Glasgow Leaders’ Declaration on Forests and Land Use committed 145 countries to halt and reverse forest loss and land degradation by 2030. Following this, COP27 has seen 26 countries and the EU launch the Forests and Climate Leaders’ Partnership (FCLP). Representing around 33% of global forestry and nearly 60% of global GDP, this group will meet a couple times each year to track progress on commitments.
Adaptation and loss and damage
Implementation was not the only priority focus at COP27.
Thirteen years ago at COP15 in Copenhagen, a commitment was made for wealthy nations to contribute a collective $100bn of climate finance per year by 2020, aimed at supporting both climate mitigation and adaptation in developing countries. They have fallen short of doing so and will only likely achieve this goal next year. According to a recent analysis by Carbon Brief which compares national shares of historical emissions with proportionate national contributions to the $100bn target, the US should be contributing nearly $40bn a year, but actually only contributed $8bn in 2020.
Similar to the emissions reduction plans put forward by COP Parties, which are neither sufficient nor on track to be achieved, climate finance commitments have failed thus far, and represent a fraction of the amount of capital required to meaningfully support developing countries mitigate emissions and adapt to the consequences of climate change.
Take the floods that have ravaged Pakistan during its monsoon season, for example – in the space of a couple months, $30bn in loss and damages have been incurred, which represents almost one third of the total amount of “promised” global climate finance in a year. Although Pakistan is responsible for only 1% of global emissions, it has borne the brunt of our man-made crisis with these floods – Over 1,600 people have died, 33 million people have been affected, and infrastructure – including roads, transport systems, sewer systems, hospitals, and homes – has been destroyed. UN Secretary General Antonio Guterres has said he has “never seen climate carnage” on such a scale.
But Pakistan is far from the only country facing such natural catastrophes – so how will we finance post-disaster relief, on top of mitigation and adaptation, with $100bn per year?
According to Pakistan’s Prime Minister Shehbaz Sharifand, developing countries are being pushed into a “debt trap”. Two-thirds of climate finance today takes the form of loans and debt, which developing countries are finding themselves incapable of paying back. Though policy initiatives like the debt-for-nature swaps, amongst others, offer innovative financial models for developing countries to fund their urgent adaptation needs, the COP’s focus still remains on the unreliable assurance of more adaptation funding from wealthy nations.
In its 2022 Adaptation Gap report, the UN has found that estimated annual adaptation needs will reach $160-340 billion by 2030, and $315-565 billion by 2050.
As a comparison point, the Transnational Institute has found that the world’s richest countries are spending 30 times as much on the military as they are on providing climate finance for developing countries – between 2013 and 2021, they collectively spent $9.45 trillion on the military, and the US has just approved a record $840bn military budget for the 2023 fiscal year alone. In May of 2020, the IMF had already found $9 trillion of global fiscal support being deployed in response to the COVID-19 pandemic – and in these past two years, the US alone has laid out a COVID-19 budget of $4.55 trillion. Geopolitical instability and sanitary emergencies have been treated like the priorities they are; we now urgently need to see a similar framing of the climate crisis, with similar amounts of funding disbursed to transform societies and help those most vulnerable.
Understandably so, then, climate finance, loss and damage, and climate justice were at the top of the COP27 agenda, and although the above statistics may paint more of a bleak picture, many encouraging initiatives have come out of Sharm El-Sheikh to help bridge the immense funding gap.
Are we on track?
Overall, COP27 resulted in some clear market signals, which should hopefully drive investment into all key sub-sectors of climate tech innovation.
But the biggest win of Sharm El-Sheikh is the promise to establish a Loss and Damage Fund. Although a promising first step, the clear reticence to establish this fund rings alarm bells and puts into question whether it will suffer the same fate as the commitment for $100bn per year of climate finance – an unfulfilled promise, fuelling distrust between countries. We won’t know much more until next year, but many issues surrounding this new fund will need to be worked out, including which Parties will have to pay, the amount of money they will have to contribute, which countries will receive the money, and what monitoring and enforcement will look like.
In addition to loss and damage, it was great to see adaptation at the heart of many COP27 initiatives. The COP Presidency’s Sharm El-Sheikh Adaptation Agenda for both state and non-state actors led to 30 Adaptation Outcomes, which represent the first comprehensive global plan to address localised climate resilience for 4 billion people. We also saw progress on the Just Energy Transition Partnership (JETP) for South Africa, the launch of a JETP for Indonesia, and further JETPs with Vietnam, Senegal and India are in the pipeline. A new fund was launched to help more than 20 Caribbean islands transition to reliable and affordable clean energy. A Global Shield scheme was launched, which will attempt to improve insurance and social protection for climate-vulnerable countries. The Roof Over our Heads campaign recognises the need for safe and decent houses for the most vulnerable communities living in informal settlements, aiming to bring community leaders and the construction industry together to build sustainable, resilient housing. Discussions around restructuring the global economy, including the IMF and the World Bank, have begun. By no means is this an exhaustive list of COP27 activities, but there has generally been more of a focus on the disproportionate effects of climate change on communities who have contributed the least to global warming.
On the other hand, though an initial push to formalise a “phase-down of all fossil fuels” received support from 80 countries, including the UK, US, EU and small island nations, it didn’t make it into the final text. Instead, the final text now includes reference to “low-carbon emissions” – which, ill-defined, can be interpreted by countries in whichever way suits their interests. Gas, for example, is less emitting than coal. Next year’s COP will be held in the UAE, one of the largest oil and gas producers in the world, which doesn’t give much hope of progress on clamping down on fossil fuels. In some ways, it even seems COP27 embraced fossil fuels, with a record number of more than 600 fossil fuel lobbyists present in Sharm El-Sheikh.
So once again, countries are being asked to update their net zero targets for next year – a failure in itself, as year after year, no consequences befall those who don’t. Though the final text does not mention the need for emissions to peak before 2025, we must act as though it does and invest in our collective future. The truth is that massive amounts of capital have and are still being deployed to fight crises, and that our main blocker is not money but political will. The Climate Change Committee estimates that the cost of reaching net zero in 2050 in the UK has fallen to “less than 1% of GDP by 2050.” When comparing that to the 12% of GDP the UK Government spent on healthcare in 2021, does it seem infeasible? But as of today, the UK is only currently investing one fifth of what is needed for it to meet its net zero targets.
What we need is for climate change to be recognised for what it is; an emergency that needs all of our attention and all of our resources.
Thank you to the climate tech founders on our Net Zero programmes who have contributed their insights to this article – Tessa Clarke from OLIO, Julian Godding from Gardin, Dhruv Boruah from Oceanways, Conor Farrington from SATAVIA, Simon Davis from OX Delivers, and Jo Parker-Swift from Solivus.