Inside Story

Agreement by ordeal

Nearly forty hours behind schedule, a final climate compromise was reached in Sharm el-Sheikh. But important action was going on elsewhere too

Michael Jacobs 22 November 2022 2654 words

The future: Indonesia’s president Joko Widodo (centre) with US president Joe Biden and (top left) Japan’s prime minister Fumio Kishida, who announced a Just Energy Transition Partnership at this month’s G20. John MacDougall/AFP

United Nations climate conferences have developed their own sadomasochistic way of reaching a conclusion.

After ten days of talks between officials end in deadlock, pairs of ministers (one from a developed country, the other from a developing one) are charged with seeking out compromises on the major issues. After two more days, still largely deadlocked, the ministers hand over to the host country’s COP president — this year, Egypt’s foreign minister Sameh Shoukry — to try to produce a compromise text. The president initially develops what are essentially shopping lists of options that define the differences between different countries’ positions but do little to resolve them.

By now it is Friday morning, and the conference is due to end at 6pm. The negotiations fall silent as the president takes further “soundings.” The exhibition halls and food stations are dismantled; anyone who isn’t a country delegate, UN staffer, journalist or NGO analyst leaves for home, their COP done. Six o’clock comes and goes. A new text is shown to the heads of delegation at 3am on Saturday morning, but there are no printed versions and phones are confiscated so they can’t take photos. The president again retreats to his cell, inviting individual ministers in for more hours of bilateral contemplation.

Finally, at 1pm on Saturday, a new compromise text is published. The major negotiating groups go into separate meetings to discuss how much they dislike it. The compromise is “unbalanced,” each of them says, leaning too far towards the other side. The groups take a long time to work through the various documents, not least because many countries are members of more than one group. (China, for example, is part of the “G77 and China,” which includes all the countries deemed “developing” when the UN Framework Convention on Climate Change was signed in 1992, but also part of a much more tightly knit and hardline “Like-Minded Group” with India, Saudi Arabia and Malaysia.)

Teams of NGO analysts pore over the documents, examining what has shifted and what has not, and issue briefings to grateful journalists on-site and geeky campaigners back home. As the concluding plenary is postponed multiple times amid further consultations, and the meeting climbs up the league table of “longest-ever COPs,” bets are taken on when it will end.

By Saturday evening most COPs have at last finished, with a compromise agreement no one likes but everyone is too exhausted to oppose. The process is masochistic because it’s the delegates themselves prolonging their own irritable sleeplessness. It’s sado- because the only other people left are sad individuals who still care. Your correspondent included.

COP27 seemed determined to inflict even more pain than normal. By Saturday midnight, leaks revealed that Saudi Arabia had introduced new text not just watering down but reversing the opposition to fossil fuels. Britain’s head of delegation, Alok Sharma (president of last year’s COP26 in Glasgow), was spitting, while the venerable US deputy head Sue Biniaz — John Kerry by this time confined to his hotel with Covid — was seen talking at length on two phones. Presumably one was to Kerry; was the other the White House?

It’s now 2am and journalists and NGO staffers are sprawled out on chairs asleep. The Egyptian presidency announces there will be a plenary between 3am and 6am. It actually starts at 4am. When it does, it seems that final texts have at last been agreed. Shoukry takes no chances. Post-last-minute amendments have been made at this stage in the past (in fact, last year). He names the key document. “Seeing no objections,” he says, not looking up to the hall in case he sees any, “it is so decided,” and bangs his gavel down. Further pauses ensue, more documents are approved, but at around 6am on Sunday morning the texts have been concluded.

Not that it’s actually finished at this point. A further three hours of speeches come from the floor, as countries and negotiating groups explain their grudging welcome for some aspects of the text and their deep disappointment at others. It’s not till past 9am, fourteen days after the conference opened and nearly forty hours after it was due to close, that we can say that another COP is over.

Was it worth it? In the end, just two significant decisions caused all the conflict. The first was “loss and damage,” UNFCC-speak for the economic and human costs faced by developing countries as a result of the greenhouse gas emissions of developed ones over the past two centuries.

Loss and damage was recognised as a concept in the Paris climate agreement, but with a huge caveat: the developed countries secured an explicit exemption from legal liability for the multibillion-dollar impact of a warming world.

For the same reason the developed countries have held out against any kind of financing mechanism for loss and damage, which would require both more aid money and the tacit acceptance of moral responsibility. For the last six years, as developing countries’ demands for a loss and damage “finance facility” surged ever more strongly, the developed countries held them off with a variety of designed-to-be-useless discussion forums.

But this year the dam broke. After John Kerry had spent the first ten days insisting that the United States could not and would not support a financing facility or a fund, with the European Union equally adamant, each produced a new draft on the final Friday accepting just that. It was surprisingly poor diplomacy on their part: if they actually were prepared to concede this (and most observers thought they would have to), they would have gained much more credit by doing so early in the conference.

Crucially, this would also have given them a much better chance of winning their primary condition of support, namely that China could no longer hide behind its historical “developing country” status and would have to contribute to the funding pool as well. By leaving it so late to concede the creation of a loss and damage fund, the United States and the European Union wasted the opportunity to put public pressure on China, and the final wording included merely a vague reference to “other sources” of financing beyond the developed nations.

Nor was any actual money promised for the fund. Before that happens, further consultation on what precisely the fund can be used for, which countries will be eligible, and how it will be governed will proceed for at least a year. Nevertheless, this was a historic moment for climate-vulnerable countries, whose delegates were exhausted but jubilant at the end.

Ultimately, though, the more contentious final issue was fossil fuels. Last year, for the first time, the COP addressed not just greenhouse gas emissions in the abstract, but also their direct causes in the combustion of fossil fuels. A scientifically self-evident but nevertheless unprecedented bit of text was agreed noting that holding warming to the 1.5°C temperature limit would require the “phasing down” of coal use. (China and India baulked at the last at the aim of “phasing out.”)

In Sharm el-Sheikh the vulnerable countries’ and NGOs’ goal was an agreement that such phasing down should apply to all fossil fuels (that is, also oil and gas) and not just coal. Their cause was surprisingly taken up by India, keen to deflect attention from its still-abundant coal use.

But Saudi Arabia and next year’s COP hosts, the United Arab Emirates, were not having that. No doubt with a little gentle pressure on their import-dependent neighbour Egypt, they instead redefined “clean energy” to include “low-emission” fuels as well as renewables. By “low emission” they mean gas, a much lower-emitting fuel than oil, but not in the slightest a near-zero one in the manner of hydro, wind, solar, tidal, geothermal or nuclear. To the anger of many, the Gulf states’ language made it into the final agreed text.

The significance of these textual niceties is often overplayed. Nothing in general COP decision text is legally binding, and no petro-state will change its behaviour as a result of it. Last year’s bitter endgame argument over whether coal should be “phased out” or merely “phased down” was a case in point: without a date for phasing out, the two phrases in practice mean the same.

Yet the Sharm el-Sheikh language approving “low-emission fuels” as part of emissions reduction plans is a serious blow to the climate action cause. It will be used to justify the expansion of gas production and consumption everywhere this is government policy, giving the apparent seal of approval of the UN climate regime. The climate-vulnerable countries and NGOs were aghast; it was this issue that took the talks into the small hours on Sunday morning.

It won’t only be the Gulf states, however, who are pleased. One of the most insistent arguments running through COP27 pitched a range of African countries against the European Union and NGOs over the financing of gas. Africa has a lot of unexploited gas resources, and the countries under whose territory they lie are understandably keen to exploit them. Yet it is also true that keeping within the 1.5°C goal will require, as the International Energy Agency has pointed out, the cessation of all new oil and gas (as well as coal) production anywhere in the world.

The European Union and NGOs insist that Africa could supply all its energy needs through solar, wind, geothermal and other renewable resources. But that’s not the issue. The value of gas is in the foreign exchange it earns — a major source of the hard currency dollars to which few African countries have much access. They are simply not going to pass the opportunity up — and particularly not at the behest of a hypocritical Europe that built its own wealth on fossil fuels and is currently scouring the world for new gas contracts to make up for lost Russian supply.

In fact, the issue of African gas heralds the emergence of a new era in climate policymaking. It’s a focus on the so-called “just transition”: the principle that decarbonisation strategies must be aimed not just at cutting emissions but also at providing alternative sources of jobs and livelihoods in the process.

As countries get serious about tackling climate change, moving from generalised target-setting to specific economic policymaking, this imperative is coming to the fore. African countries desperate to reduce poverty and develop into middle-income economies won’t allow decarbonisation to stop them. And nations already dependent on homegrown fossil fuels will only be willing to reduce their dependence if they can see a viable alternative source, not just of domestic energy, but also of employment and foreign exchange earnings.

The argument over fossil fuels in the final text was symbolic, but in this context it was not nearly the most important development at COP27. That came in two separate announcements that were not part of the formal conference but merely part of its fringe; and indeed one of which was not made in Egypt at all.

During the first week of COP27 the government of South Africa announced a new US$8.5 billion “Just Energy Transition Partnership,” or JET-P, with the United States, the European Union, France, Germany and Britain. It aims to transform South Africa’s energy and industrial landscape by reducing its dependence on coal, increasing its renewable supply, upgrading its electricity grid, and developing its car manufacturing sector to become a domestic and global supplier of electric vehicles.

For a country that employs 92,000 coalminers, and whose giant, sclerotic state-owned energy company, Eskom, is unable to prevent regular blackouts across the country, this is a hugely ambitious program. The loans and loan guarantees from the donor countries will barely begin to cover the scale of the investment needed, but it is hoped they will leverage in orders of magnitude more from the private sector.

Even more importantly, the political challenges will be enormous. In a country already experiencing social unrest as a result of the rising cost of living and persistently high levels of unemployment, laying off coalminers could be a recipe for trouble. The coalmining union is one of the bastions of political support for the country’s ruling African National Congress. During the year-long consultation process the government undertook to prepare the partnership plan, it was clear that many sections of the public remain to be convinced that reducing coal consumption is in the country’s interest, or will make their own lives better.

The same challenge also faces the government of Indonesia, which, a week after South Africa, announced its own Just Energy Transition Partnership with the United States, Japan and others. This time the package of loans and guarantees was worth US$20 billion. The announcement was made not in Sharm el-Sheikh but in Bali, where Indonesia was hosting the annual G20 summit. But it had the same COP27 resonance: another huge coal-producing nation choosing ultimately to leave the coal in the ground and pledge its long-term future to renewable and geothermal energy. The partnership plan envisages Indonesia embarking on an industrial strategy designed to exploit the country’s world-leading nickel and tin mining to create battery factories and other high-technology plant.

If the world is to succeed in cutting greenhouse emissions at the same time as enabling developing countries to grow and to modernise, these JET-Ps, or something like them, are surely the form it will take. Vietnam is currently in talks with the Western powers to do the next deal, and India is making interested noises as well. It has not escaped anyone’s notice that such partnerships are potentially a means by which the West can offer developing countries financial assistance — and political influence — to rival those of China’s huge Belt and Road Initiative.

More widely, the principle of the “just transition” is likely to be the basis for much climate policy over the coming years. It already informs Joe Biden’s Inflation Reduction Act, whose trillion-dollar subsidies for green energy and industrial production are conditional on components being sourced from US manufacturers (or those within the North American Free Trade Association, namely Canada and Mexico), a fact which has led the European Union to threaten to take the United States to the World Trade Organization for breaching trade rules.

This is essentially a form of green protectionism — but it is also surely the inevitable political consequence of serious decarbonisation. Moves away from fossil fuels and energy-intensive industry will only be supported by the workers and communities affected if alternative jobs and livelihoods are on offer. Imposing domestic supply chains may not be economically efficient according to neoclassical free-trade theory, but in the eyes of any politician it makes perfect political sense.

Although these issues were animatedly discussed in COP27 fringe meetings — there was an entire pavilion devoted to Just Transition policy, sponsored by the International Labour Organization — very few measures or proposals entered the decision text. But they almost certainly will in due course.

COP27 has demonstrated the notable shift that has occurred since the 2015 Paris agreement. Before then, COPs came first, setting out principles and mandating national action, which countries subsequently followed. Today the order has been reversed. Countries are designing and implementing policies for mitigation, adaptation, and loss and damage. If a few years later they get mentioned in COP texts as important examples to follow, that is just a bonus.

This is indeed how it should be. The Paris climate agreement sets out the principles and legally binding rules of climate action, with more detailed regulation negotiated at subsequent COPs. But now the international rules are in place, the focus of debate must inevitably shift to the national political arena, where policy is made and politics rule. Given how tortuous they have become, that COPs have less and less for their negotiators to do is a boon to them as well as to the watching world. •