how firmly do the US and Europe stand by Ukraine against Russia? During his visit to Kyiv, National Security Adviser Jake Sullivan assured that the United States would continue to support the country “steadfast and unwavering” after Tuesday’s congressional midterm elections. Behind the scenes, Washington is apparently urging President Volodymyr Selenskyy to appear ready for talks.
Peace talks with Moscow may be pointless at the moment, but Selenskyj should thus take the edge off the growing demands. War fatigue is also growing in Europe – in Rome tens of thousands demonstrated against further arms deliveries to Ukraine on Saturday. Meanwhile, Commission President Ursula von der Leyen assured Selenskyj of the EU’s long-term support. She wants to present plans for a new aid package of up to €18 billion this week. Read more in the News section.
The World Climate Conference in Sharm el-Sheikh started yesterday with a first success for the developing countries: Dealing with loss and damage due to climate change in the global South is now officially on the agenda of COP27. Lukas Scheid analyzes for you what to expect from the negotiations over the next two weeks.
Also highly controversial is the Energy Charter Treaty, which allows investors to sue governments’ climate policies in arbitration courts. As Charlotte Wirth learned, several EU states want to withdraw from the treaty, but they are unlikely to oppose the reform in the Council. Experts warn that the balancing act could lead to legal problems.
I wish you a good start to the new week!
Despite all the criticism of the Energy Charter Treaty (ECT), the EU states in the Council are expected to approve the reform. The discussion is “constructive,” several diplomats reported in an interview with Europe.Table. A blocking minority is not to expect, they said. “No one has an interest in staying with the old treaty,” said one diplomat. That also applies to countries not wanting to remain members of the ECT, he added.
In the meantime, a corresponding proposal for a Council decision is circulating. This states that the EU’s position is to “cast a vote and not to object.” This would mean that the EU as a whole would de facto agree to the reform.
Spain, the Netherlands, Poland, Slovenia, and most recently, France had announced their intention to leave the ECT. Italy already left the charter in 2015.
The agreement, which dates back to the 1990s, allows investors to sue states before private arbitration tribunals if their plants are at risk because of stricter climate laws. This happened last April when German energy company Uniper sued the Netherlands over its coal phase-out. The ECT primarily protects fossil fuels for as long as 20 years after a state withdraws from the charter (Europe Table reported).
In June, the signatories were able to agree in principle on a reform of the charter. ECT Secretary General Guy Lentz spoke of a “significant milestone” on the road to climate neutrality. EU states had supported the move of the former advisor to Luxembourg’s Energy Minister Claude Turmes to head the ECT. “He manages to implement the European mandate to reform the Energy Charter,” was the argument. On Nov. 22, the 53 ECT states are now scheduled to vote on the reform. Unanimity is required.
Meanwhile, the traffic light coalition in Berlin is struggling to find a common position (Europe.Table reported): The decision-making process within the federal government has not yet been completed, a spokesman for the Federal Ministry of Economics said on request. The Greens in particular do not consider the reform a success.
Time is pressing. Before Nov. 22, the EU states must agree on a position in the Council. The ECT is a mixed treaty: Not only the individual member states are members, but also the EU. The EU Commission is promoting the reform text – saying it is a “substantial improvement in terms of European energy and climate targets.” The member states are to give the mandate to approve the reform.
In fact, Brussels was able to negotiate a special clause under which investment protection within the EU will no longer apply to fossil energies. New investments will no longer be covered by investment protection once the treaty enters into force. For existing investments, however, protection will apply for another ten years; if ratification takes too long, even until Oct. 31, 2040.
Transition periods apply to investments in “low-carbon” gas products, gas infrastructure, and especially gas-fired power plants: they enjoy ECT protection until the end of 2030 or even 2033 if they replace coal-fired power plants.
The definition of “low-carbon” makes experts take notice. It is more generous than the controversial EU taxonomy for sustainable finance, where the limit was 270 grams of carbon per kilowatt hour. The ECT flexibility clause talks about 380 grams of carbon/kWh. “This is enormous and absolutely incomprehensible,” criticizes climate expert Yamina Saheb. The former Energy Charter employee now works as an expert for the Intergovernmental Panel on Climate Change (IPCC).
Saheb warns, “Even the reformed text is a huge hurdle in the fight against climate change.” Experts from France’s High Climate Council (HCC), whose job is to evaluate France’s climate strategy, take a similar view. Even in its modernized form, the ECT is neither compatible with the decarbonization of the energy sector nor with the Paris climate goals, they judged. The HCC recommends: The EU should withdraw from the ECT.
Investments in renewable and low-carbon energies are not affected by the flexibility clause. From now on, hydrogen, synthetic fuels, and biomass, among others, will also be covered by investor protection. Nuclear power will continue to be protected. Against this background, it may be surprising that neither Austria nor Luxembourg prepare to withdraw from the Energy Charter. Austria filed a complaint with the European Court of Justice in October against the EU’s Sustainable Finance Taxonomy because it classifies nuclear power as sustainable. Luxembourg provides legal aid.
Legally, however, EU member states that want to withdraw are treading on thin ice if they agree to the reform in the Council. “If the member states adopt the Council decision, they agree on a common strategy,” says Christina Eckes, a public law expert at the University of Amsterdam. “Then individual states cannot say at the same time that they want to leave after all. They are bound by their loyalty obligation.”
That would significantly delay their withdrawal from the Energy Charter, Eckes warns. Because then EU states could only withdraw if their national parliament rejected ratification.
Eckes also emphasizes that the EU can only bind itself to the treaty within its competencies. If it adopts the reform, it will bind all EU states to the arbitration courts. “But it cannot do that, because it is not a competence that the EU can exercise alone.”
The EU would then have to make clear that it only binds ECT members to the investor-state settlement whenever a member state leaves, not the entire EU – otherwise it would be legally contestable. The best strategy is thus for the EU27 not to give the Commission a mandate for the Nov. 22 reform vote, he said. At the same time, Eckes recommends withdrawal from the ECT, coupled with neutralization of the sunset clause within the EU.
The latter would mean that the Energy Charter’s arbitration tribunals can no longer be entrusted with lawsuits between EU states. The Commission earmarks such an additional protocol, concluded separately between the EU, Euratom, and the 26 EU members of the ECT. The corresponding proposal has been sent to the EU member states together with the proposal for the Council Decision. According to the ECJ (Achmea 2018; Komstroy 2021), such arbitration proceedings are incompatible with European law.
An additional protocol would significantly reduce the risk of lawsuits against EU states: About two-thirds of ECT lawsuits would probably be eliminated. In many cases, however, there is not just one but several plaintiffs. It is not uncommon for at least one of them not to be based in the EU. Example: RREEF LTD and RREEF Europe v. Spain (2019). Under the Additional Protocol, the former could easily continue to sue EU states because it is a UK corporation.
To prevent energy companies from circumventing the Additional Protocol thanks to shell companies, the reformed text has tightened the definition of “investors” and “parties” to the agreement. For example, they must prove “substantial business activities” in the country under which they are suing. “Whether these conditions are met, however, is decided by the arbitral tribunal, and anew for each claim,” explains Christina Eckes.
It is not yet clear how the decision will turn out on Nov. 22. It was the EU in particular that pushed for the modernization of the treaty. Members such as Japan and Turkey were against a reform from the beginning (Europe.Table reported). The risk of sticking with the old text is quite tangible.
The COP27 in Sharm el-Sheikh started with a first victory for the developing countries: Dealing with loss and damage resulting from climate change in the global South will become a so-called “Agenda Item” and is thus officially on the agenda of the climate conference. The issue of loss and damage has so far divided rich and poor countries. According to Egypt’s Foreign Minister Sameh Shoukry, the breakthrough was reached after 48 hours of tough negotiations. A final decision on loss and damage will be sought “no later than 2024,” said Shoukry, who was elected COP president on Sunday.
Back in 1991, small island nations were already calling for a kind of insurance system against the climate crisis. Since then, the issue has come up again and again, but it has never been taken seriously. Last year, however, the Glasgow Dialogue provided a platform for discussion on loss and damage. According to Shoukry, the agenda breakthrough on loss and damage was achieved through a compromise: the discussion will be based on “cooperation” rather than “liability or compensation.”
Specifically, developing countries call for a financing instrument for damage and losses, for example in the event of droughts, floods, but also economic damage. The idea is that the industrialized countries, as the main perpetrators of climate change, should also bear financial responsibility for the consequences of years of carbon emissions. The USA and also some EU countries have so far shied away from such a step. They fear that they will be held liable for natural disasters and that the demands for compensation will increase dramatically.
Before committing to a financial framework, the EU first wants to clarify with the countries of the Global South how great the need is. The EU mandate for the COP27 only includes talks. A high-ranking EU official said on Friday that the Global South’s willingness to engage in such talks was surprisingly low. He said the EU is willing to provide funding for loss and damage. However, this would have to be based on demand, otherwise complicated and years-long negotiations on compensation criteria would ensue, he said.
One option could be to agree on a capped funding framework that compensates for losses and damages. That would be a major success. At the same time, failure on this issue could also mean failure of the entire conference.
State Secretary at the German Federal Foreign Office, Jennifer Morgan, is responsible for negotiating a loss-and-damage roadmap with Chilean Environment Minister Maisa Rojas.
At COP27, previously adopted agreements are once again up for debate. In Glasgow, the countries agreed to use less fossil fuels and to end government subsidies for fossil infrastructure.
But because more and more coal-fired power plants are once again added to the grid, especially in the EU, or their operating lives are being extended, and liquefied natural gas (LNG) supplies are being sought, for example from Azerbaijan, Qatar or the United Arab Emirates, there are doubts that these agreements will be upheld. The climate policy credibility of Europe and the West is at stake. In addition, China approved new coal mines, and Vietnam and Indonesia are also trying to expand their coal production.
For this reason, some African states in particular are demanding to be allowed to develop their fossil energy sources. This position could complicate the talks in Sharm El-Sheikh.
In 2009, industrialized countries pledged to provide $100 billion each year from 2020 for investments in carbon abatement and climate adaptation measures in less wealthy countries. In 2020, the target was missed by a wide margin at $83.3 billion. According to an OECD forecast, the figures for 2022 are a maximum of $88 billion.
The sum of 100 billion is expected to be reached in 2023, however. But for that to happen, the United States in particular will have to ramp up its funding pledges. Joe Biden’s Emergency Plan for Adaptation and Resilience (PREPARE) earmarks $3 billion a year for climate adaptation and a total of $11 billion for climate financing – but only starting in 2024. The EU also needs to step up. According to its own figures, the EU states provided just over €23 billion for public climate financing in 2021, excluding private capital.
The Egyptian COP presidency will pressure the industrialized countries to fulfill the promise by next year at the latest. As the African host country, Egypt’s demands also represent the Global South as a whole.
However, not only the amount alone is important, but also how much money comes from grants and how much from loans. Countries such as Japan and France do exceed their share of climate financing, but a large part consists of loans. The Global South, however, demands grants, especially for adaptation measures. In Glasgow, countries agreed that at least 50 percent of climate finance should go to adaptation measures.
According to calculations by the UN Environment Programme (UNEP), international aid payments to date to the Global South for climate adaptation are between five and ten times lower than what the countries actually need. The UN Office for Trade and Development (UNCTAD) estimates that developing countries will require $300 billion in adaptation funding by 2030. During negotiations, the industrialized countries will once again be accused of not doing enough.
By 2025, the share of climate financing that flows into adaptation measures will be doubled. From the current level of around $20 billion (about a quarter of the total amount) to $40 billion – that was decided in Glasgow. If the $100 billion pledge is viewed together with the plan to allocate 50 percent to adaptation, then another $10 billion would have to flow. The less developed countries will also insist on this.
COP27 also marks the start of talks on a new financing target beyond 2025, which is supposed to be based on the needs of developing countries. However, an agreement is considered unlikely and is not planned until the Global Stocktake at COP28 on – the progress review of the Paris Agreement.
Despite the enormous need for adaptation measures, the EU in particular has repeatedly warned that avoiding climate-damaging carbon emissions must not be overlooked in the process. The European negotiators will also reiterate this point in Sharm el-Sheikh.
All countries were urged to raise their 2030 climate targets in the run-up to the COP27. Of the industrialized countries, only Australia submitted an update to the UN before the summit began. Although the EU is also prepared to increase its Nationally Determined Contribution (NDC), it will wait until the negotiations of the Fit-for-55 package have been completed.
Instead, so-called Just Energy Transition Partnerships (JETPs) are to be promoted at the behest of the G7 and the EU. A first JETP with South Africa (Climate.Table reported) worth $8.5 billion was agreed upon in Glasgow. Others are planned with Vietnam, Indonesia, India and Senegal – among others, to end the use of coal in these countries.
Furthermore, additional energy and hydrogen partnerships are planned. The EU and Egypt want to seal their joint project at the COP27. Ursula von der Leyen will sign memoranda of understanding with Namibia and Kazakhstan during the high level segment of the summit.
He is one of the three key officials negotiating for the EU at the upcoming climate conference: Jacob Werksman is traveling to Sharm El-Sheikh with Commission Vice President Frans Timmermans as an advisor on international climate law. In the EU Commission, he is the main advisor for the international aspects of European climate policy.
“When I went to law school in the late 1980s, there was no course in international environmental law,” says the US American. After graduation, he came across the Center for International Environmental Law (CIEL). At the time, the organization was advising developing countries preparing for the 1992 Earth Summit in Rio de Janeiro. Werksman starts as an intern at CIEL, then stays for ten years. “My colleagues and I were among the first lawyers to practice international environmental law as a separate discipline,” Werksman says.
He stops at the United Nations Development Program, the Rockefeller Foundation, and the World Resources Institute. Then Connie Hedegaard brings him to Denmark to prepare for the 2009 climate conference in Copenhagen. When Hedegaard becomes EU Commissioner, Werksman moves with her to Brussels.
He now works for Timmermans. Werksman is one of three Chief EU Negotiators at the upcoming climate conference in Egypt. This means that whatever is undecided in the technical committees ends up on his desk before Timmermans negotiates at the ministerial level. For the ministers, there are usually not many decisions left, Werksman says. How many end up at his desk? “Too many.”
In Egypt, Werksman does not expect any groundbreaking, completely new results. Unlike in Glasgow, there will be fewer concrete decisions to negotiate. He said it will be about climate adaptation, damage and loss, and funding for particularly affected poorer nations. “We’re not going to fully resolve any of these issues, but there will be a formal space to find and accelerate solutions,” Werksman says.
This is the third EU Commission Werksman has worked for. His work changed since the Green Deal came into existence: “For the first time, we no longer had to lobby the other parts of the Commission for climate protection. All of a sudden, we were being asked for advice all the time,” Werksman says. Since then, the entire Commission had to focus on climate protection.
For Werksman, it’s also one of the most important examples of how internationally negotiated goals prevail at the regional and national level – something the international law expert has never seen before: “I don’t think it was ever really appreciated from the outside how revolutionary it was.” Jana Hemmersmeier
how firmly do the US and Europe stand by Ukraine against Russia? During his visit to Kyiv, National Security Adviser Jake Sullivan assured that the United States would continue to support the country “steadfast and unwavering” after Tuesday’s congressional midterm elections. Behind the scenes, Washington is apparently urging President Volodymyr Selenskyy to appear ready for talks.
Peace talks with Moscow may be pointless at the moment, but Selenskyj should thus take the edge off the growing demands. War fatigue is also growing in Europe – in Rome tens of thousands demonstrated against further arms deliveries to Ukraine on Saturday. Meanwhile, Commission President Ursula von der Leyen assured Selenskyj of the EU’s long-term support. She wants to present plans for a new aid package of up to €18 billion this week. Read more in the News section.
The World Climate Conference in Sharm el-Sheikh started yesterday with a first success for the developing countries: Dealing with loss and damage due to climate change in the global South is now officially on the agenda of COP27. Lukas Scheid analyzes for you what to expect from the negotiations over the next two weeks.
Also highly controversial is the Energy Charter Treaty, which allows investors to sue governments’ climate policies in arbitration courts. As Charlotte Wirth learned, several EU states want to withdraw from the treaty, but they are unlikely to oppose the reform in the Council. Experts warn that the balancing act could lead to legal problems.
I wish you a good start to the new week!
Despite all the criticism of the Energy Charter Treaty (ECT), the EU states in the Council are expected to approve the reform. The discussion is “constructive,” several diplomats reported in an interview with Europe.Table. A blocking minority is not to expect, they said. “No one has an interest in staying with the old treaty,” said one diplomat. That also applies to countries not wanting to remain members of the ECT, he added.
In the meantime, a corresponding proposal for a Council decision is circulating. This states that the EU’s position is to “cast a vote and not to object.” This would mean that the EU as a whole would de facto agree to the reform.
Spain, the Netherlands, Poland, Slovenia, and most recently, France had announced their intention to leave the ECT. Italy already left the charter in 2015.
The agreement, which dates back to the 1990s, allows investors to sue states before private arbitration tribunals if their plants are at risk because of stricter climate laws. This happened last April when German energy company Uniper sued the Netherlands over its coal phase-out. The ECT primarily protects fossil fuels for as long as 20 years after a state withdraws from the charter (Europe Table reported).
In June, the signatories were able to agree in principle on a reform of the charter. ECT Secretary General Guy Lentz spoke of a “significant milestone” on the road to climate neutrality. EU states had supported the move of the former advisor to Luxembourg’s Energy Minister Claude Turmes to head the ECT. “He manages to implement the European mandate to reform the Energy Charter,” was the argument. On Nov. 22, the 53 ECT states are now scheduled to vote on the reform. Unanimity is required.
Meanwhile, the traffic light coalition in Berlin is struggling to find a common position (Europe.Table reported): The decision-making process within the federal government has not yet been completed, a spokesman for the Federal Ministry of Economics said on request. The Greens in particular do not consider the reform a success.
Time is pressing. Before Nov. 22, the EU states must agree on a position in the Council. The ECT is a mixed treaty: Not only the individual member states are members, but also the EU. The EU Commission is promoting the reform text – saying it is a “substantial improvement in terms of European energy and climate targets.” The member states are to give the mandate to approve the reform.
In fact, Brussels was able to negotiate a special clause under which investment protection within the EU will no longer apply to fossil energies. New investments will no longer be covered by investment protection once the treaty enters into force. For existing investments, however, protection will apply for another ten years; if ratification takes too long, even until Oct. 31, 2040.
Transition periods apply to investments in “low-carbon” gas products, gas infrastructure, and especially gas-fired power plants: they enjoy ECT protection until the end of 2030 or even 2033 if they replace coal-fired power plants.
The definition of “low-carbon” makes experts take notice. It is more generous than the controversial EU taxonomy for sustainable finance, where the limit was 270 grams of carbon per kilowatt hour. The ECT flexibility clause talks about 380 grams of carbon/kWh. “This is enormous and absolutely incomprehensible,” criticizes climate expert Yamina Saheb. The former Energy Charter employee now works as an expert for the Intergovernmental Panel on Climate Change (IPCC).
Saheb warns, “Even the reformed text is a huge hurdle in the fight against climate change.” Experts from France’s High Climate Council (HCC), whose job is to evaluate France’s climate strategy, take a similar view. Even in its modernized form, the ECT is neither compatible with the decarbonization of the energy sector nor with the Paris climate goals, they judged. The HCC recommends: The EU should withdraw from the ECT.
Investments in renewable and low-carbon energies are not affected by the flexibility clause. From now on, hydrogen, synthetic fuels, and biomass, among others, will also be covered by investor protection. Nuclear power will continue to be protected. Against this background, it may be surprising that neither Austria nor Luxembourg prepare to withdraw from the Energy Charter. Austria filed a complaint with the European Court of Justice in October against the EU’s Sustainable Finance Taxonomy because it classifies nuclear power as sustainable. Luxembourg provides legal aid.
Legally, however, EU member states that want to withdraw are treading on thin ice if they agree to the reform in the Council. “If the member states adopt the Council decision, they agree on a common strategy,” says Christina Eckes, a public law expert at the University of Amsterdam. “Then individual states cannot say at the same time that they want to leave after all. They are bound by their loyalty obligation.”
That would significantly delay their withdrawal from the Energy Charter, Eckes warns. Because then EU states could only withdraw if their national parliament rejected ratification.
Eckes also emphasizes that the EU can only bind itself to the treaty within its competencies. If it adopts the reform, it will bind all EU states to the arbitration courts. “But it cannot do that, because it is not a competence that the EU can exercise alone.”
The EU would then have to make clear that it only binds ECT members to the investor-state settlement whenever a member state leaves, not the entire EU – otherwise it would be legally contestable. The best strategy is thus for the EU27 not to give the Commission a mandate for the Nov. 22 reform vote, he said. At the same time, Eckes recommends withdrawal from the ECT, coupled with neutralization of the sunset clause within the EU.
The latter would mean that the Energy Charter’s arbitration tribunals can no longer be entrusted with lawsuits between EU states. The Commission earmarks such an additional protocol, concluded separately between the EU, Euratom, and the 26 EU members of the ECT. The corresponding proposal has been sent to the EU member states together with the proposal for the Council Decision. According to the ECJ (Achmea 2018; Komstroy 2021), such arbitration proceedings are incompatible with European law.
An additional protocol would significantly reduce the risk of lawsuits against EU states: About two-thirds of ECT lawsuits would probably be eliminated. In many cases, however, there is not just one but several plaintiffs. It is not uncommon for at least one of them not to be based in the EU. Example: RREEF LTD and RREEF Europe v. Spain (2019). Under the Additional Protocol, the former could easily continue to sue EU states because it is a UK corporation.
To prevent energy companies from circumventing the Additional Protocol thanks to shell companies, the reformed text has tightened the definition of “investors” and “parties” to the agreement. For example, they must prove “substantial business activities” in the country under which they are suing. “Whether these conditions are met, however, is decided by the arbitral tribunal, and anew for each claim,” explains Christina Eckes.
It is not yet clear how the decision will turn out on Nov. 22. It was the EU in particular that pushed for the modernization of the treaty. Members such as Japan and Turkey were against a reform from the beginning (Europe.Table reported). The risk of sticking with the old text is quite tangible.
The COP27 in Sharm el-Sheikh started with a first victory for the developing countries: Dealing with loss and damage resulting from climate change in the global South will become a so-called “Agenda Item” and is thus officially on the agenda of the climate conference. The issue of loss and damage has so far divided rich and poor countries. According to Egypt’s Foreign Minister Sameh Shoukry, the breakthrough was reached after 48 hours of tough negotiations. A final decision on loss and damage will be sought “no later than 2024,” said Shoukry, who was elected COP president on Sunday.
Back in 1991, small island nations were already calling for a kind of insurance system against the climate crisis. Since then, the issue has come up again and again, but it has never been taken seriously. Last year, however, the Glasgow Dialogue provided a platform for discussion on loss and damage. According to Shoukry, the agenda breakthrough on loss and damage was achieved through a compromise: the discussion will be based on “cooperation” rather than “liability or compensation.”
Specifically, developing countries call for a financing instrument for damage and losses, for example in the event of droughts, floods, but also economic damage. The idea is that the industrialized countries, as the main perpetrators of climate change, should also bear financial responsibility for the consequences of years of carbon emissions. The USA and also some EU countries have so far shied away from such a step. They fear that they will be held liable for natural disasters and that the demands for compensation will increase dramatically.
Before committing to a financial framework, the EU first wants to clarify with the countries of the Global South how great the need is. The EU mandate for the COP27 only includes talks. A high-ranking EU official said on Friday that the Global South’s willingness to engage in such talks was surprisingly low. He said the EU is willing to provide funding for loss and damage. However, this would have to be based on demand, otherwise complicated and years-long negotiations on compensation criteria would ensue, he said.
One option could be to agree on a capped funding framework that compensates for losses and damages. That would be a major success. At the same time, failure on this issue could also mean failure of the entire conference.
State Secretary at the German Federal Foreign Office, Jennifer Morgan, is responsible for negotiating a loss-and-damage roadmap with Chilean Environment Minister Maisa Rojas.
At COP27, previously adopted agreements are once again up for debate. In Glasgow, the countries agreed to use less fossil fuels and to end government subsidies for fossil infrastructure.
But because more and more coal-fired power plants are once again added to the grid, especially in the EU, or their operating lives are being extended, and liquefied natural gas (LNG) supplies are being sought, for example from Azerbaijan, Qatar or the United Arab Emirates, there are doubts that these agreements will be upheld. The climate policy credibility of Europe and the West is at stake. In addition, China approved new coal mines, and Vietnam and Indonesia are also trying to expand their coal production.
For this reason, some African states in particular are demanding to be allowed to develop their fossil energy sources. This position could complicate the talks in Sharm El-Sheikh.
In 2009, industrialized countries pledged to provide $100 billion each year from 2020 for investments in carbon abatement and climate adaptation measures in less wealthy countries. In 2020, the target was missed by a wide margin at $83.3 billion. According to an OECD forecast, the figures for 2022 are a maximum of $88 billion.
The sum of 100 billion is expected to be reached in 2023, however. But for that to happen, the United States in particular will have to ramp up its funding pledges. Joe Biden’s Emergency Plan for Adaptation and Resilience (PREPARE) earmarks $3 billion a year for climate adaptation and a total of $11 billion for climate financing – but only starting in 2024. The EU also needs to step up. According to its own figures, the EU states provided just over €23 billion for public climate financing in 2021, excluding private capital.
The Egyptian COP presidency will pressure the industrialized countries to fulfill the promise by next year at the latest. As the African host country, Egypt’s demands also represent the Global South as a whole.
However, not only the amount alone is important, but also how much money comes from grants and how much from loans. Countries such as Japan and France do exceed their share of climate financing, but a large part consists of loans. The Global South, however, demands grants, especially for adaptation measures. In Glasgow, countries agreed that at least 50 percent of climate finance should go to adaptation measures.
According to calculations by the UN Environment Programme (UNEP), international aid payments to date to the Global South for climate adaptation are between five and ten times lower than what the countries actually need. The UN Office for Trade and Development (UNCTAD) estimates that developing countries will require $300 billion in adaptation funding by 2030. During negotiations, the industrialized countries will once again be accused of not doing enough.
By 2025, the share of climate financing that flows into adaptation measures will be doubled. From the current level of around $20 billion (about a quarter of the total amount) to $40 billion – that was decided in Glasgow. If the $100 billion pledge is viewed together with the plan to allocate 50 percent to adaptation, then another $10 billion would have to flow. The less developed countries will also insist on this.
COP27 also marks the start of talks on a new financing target beyond 2025, which is supposed to be based on the needs of developing countries. However, an agreement is considered unlikely and is not planned until the Global Stocktake at COP28 on – the progress review of the Paris Agreement.
Despite the enormous need for adaptation measures, the EU in particular has repeatedly warned that avoiding climate-damaging carbon emissions must not be overlooked in the process. The European negotiators will also reiterate this point in Sharm el-Sheikh.
All countries were urged to raise their 2030 climate targets in the run-up to the COP27. Of the industrialized countries, only Australia submitted an update to the UN before the summit began. Although the EU is also prepared to increase its Nationally Determined Contribution (NDC), it will wait until the negotiations of the Fit-for-55 package have been completed.
Instead, so-called Just Energy Transition Partnerships (JETPs) are to be promoted at the behest of the G7 and the EU. A first JETP with South Africa (Climate.Table reported) worth $8.5 billion was agreed upon in Glasgow. Others are planned with Vietnam, Indonesia, India and Senegal – among others, to end the use of coal in these countries.
Furthermore, additional energy and hydrogen partnerships are planned. The EU and Egypt want to seal their joint project at the COP27. Ursula von der Leyen will sign memoranda of understanding with Namibia and Kazakhstan during the high level segment of the summit.
He is one of the three key officials negotiating for the EU at the upcoming climate conference: Jacob Werksman is traveling to Sharm El-Sheikh with Commission Vice President Frans Timmermans as an advisor on international climate law. In the EU Commission, he is the main advisor for the international aspects of European climate policy.
“When I went to law school in the late 1980s, there was no course in international environmental law,” says the US American. After graduation, he came across the Center for International Environmental Law (CIEL). At the time, the organization was advising developing countries preparing for the 1992 Earth Summit in Rio de Janeiro. Werksman starts as an intern at CIEL, then stays for ten years. “My colleagues and I were among the first lawyers to practice international environmental law as a separate discipline,” Werksman says.
He stops at the United Nations Development Program, the Rockefeller Foundation, and the World Resources Institute. Then Connie Hedegaard brings him to Denmark to prepare for the 2009 climate conference in Copenhagen. When Hedegaard becomes EU Commissioner, Werksman moves with her to Brussels.
He now works for Timmermans. Werksman is one of three Chief EU Negotiators at the upcoming climate conference in Egypt. This means that whatever is undecided in the technical committees ends up on his desk before Timmermans negotiates at the ministerial level. For the ministers, there are usually not many decisions left, Werksman says. How many end up at his desk? “Too many.”
In Egypt, Werksman does not expect any groundbreaking, completely new results. Unlike in Glasgow, there will be fewer concrete decisions to negotiate. He said it will be about climate adaptation, damage and loss, and funding for particularly affected poorer nations. “We’re not going to fully resolve any of these issues, but there will be a formal space to find and accelerate solutions,” Werksman says.
This is the third EU Commission Werksman has worked for. His work changed since the Green Deal came into existence: “For the first time, we no longer had to lobby the other parts of the Commission for climate protection. All of a sudden, we were being asked for advice all the time,” Werksman says. Since then, the entire Commission had to focus on climate protection.
For Werksman, it’s also one of the most important examples of how internationally negotiated goals prevail at the regional and national level – something the international law expert has never seen before: “I don’t think it was ever really appreciated from the outside how revolutionary it was.” Jana Hemmersmeier
