COP27: Money is increasingly central to climate negotiations

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COP27 climate talks: Money is increasingly central to climate negotiations

This special COP27 briefing originally appeared in our flagship daily newsletter, Grid Today. Sign up for it here to get the context and consequences of the news in your inbox each day.


U.S. climate negotiators’ jobs in Egypt just may have gotten a little easier, as the ‘red wave’ predicted for the midterm elections failed to materialize.

While Republicans may yet win one or both houses of Congress when all the votes are counted, Democrats avoided a drubbing that would make it easier for Congress to undercut funding or block implementation of major climate provisions of the Inflation Reduction Act. That could have put a wrench in the American negotiating position at the talks this week in Egypt, as the Biden administration tries to position the U.S. as a climate leader.

Experts told me previously that the new law and other domestic policy moves do give the world’s biggest economy some additional leverage, so a sharply split Congress rather than one entirely under control of those opposed to climate action could help grease the wheels in Egypt. But even without an election-related hiccup, the Biden administration’s climate accomplishments haven’t gone over entirely smoothly at the climate talks. Some U.S. trading partners, including the EU, Japan and South Korea, are apparently irked at the IRA’s provisions heavily incentivizing domestic production of electric vehicles and clean energy. On a global playing field, it’s rare to end up with a clear victory.

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Focus on finance

Wednesday was Finance Day at the COP. Money is increasingly central to climate negotiations — money to help countries transition away from fossil fuels and toward renewable energy, money to pay for adaptation efforts like migration and adjusted agricultural practices, money to compensate developing countries for the loss and damage the rich world’s emissions have unleashed. The fundamental issue, of course, is that there isn’t enough of it.

“Humanitarian action alone is not enough to overcome the many challenges people suffering from violence and climate shocks face,” said Robert Mardini, director-general of the International Committee of the Red Cross, in a statement focused on the loss and damage discussions in Egypt. “Without decisive financial and political support to the most fragile countries, the suffering will only worsen.”

While loss and damage discussions are clearly ramping up, among the biggest and most immediate finance gaps is the adaptation gap: the huge distance between what is needed to adapt to the changing climate today and in the coming years, and the amount of money actually flowing toward that issue.

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A new report commissioned by Egypt and the U.K., the current and previous COP hosts, suggests that overall, developing countries will need $1 trillion in overall annual climate finance by 2030 — 10 times the amount pledged in 2009, a target the world still has not reached. Meanwhile, the U.N. released a report detailing a roadmap to quickly ramping up financing, with a $120 billion collection of projects — aimed at both climate change mitigation and adaptation — that could be funded immediately.

“Financing is available but often goes untapped,” John Furlow, director of Columbia University’s International Research Institute for Climate and Society, told me during a pre-COP press briefing. “And a lot of it that is being spent is not being spent well.”

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In other words, all those reports on dollar amounts needed and where to spend those dollars could stand to be better acquainted, bringing what’s available to what will work best. As Finance Day winds down in Egypt, there does seem to be some progress on that front.

What’s next

I’ll be heading out to Egypt on Thursday, so some other Grid reporters will fill in with some COP-related updates tomorrow. Other “thematic days” like finance are coming up, including on decarbonization, adaptation and agriculture, and others. President Joe Biden speaks in Sharm el-Sheikh on Friday, and then the week two negotiation sprint begins. More from Egypt!

  • Dave Levitan
    Dave Levitan

    Climate Reporter

    Dave Levitan is a climate reporter for Grid where he focuses on interconnected stories about climate and science, and politics shaping action around both.