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Cop27 bulletin: Could polluter taxes fund loss and damage?

The finger pointing on who pays out to climate victims continues. The US’ John Kerry has hinted China, now the (distant) second biggest historic emitter in the world, should chip in.

China’s Xie Zhenhua told a press briefing Kerry had not asked him directly during their informal meetings. (Relations are still frosty since US house speaker Nancy Pelosi’s visit to Taiwan “hurt China’s peoples’ feelings”.)

Warning against reopening the Paris Agreement, Xie said China made voluntary contributions through south-south cooperation and was under no obligation to do more.

“We hope…. that we can set up this new mechanism and then we can discuss how to resolve it in a more in depth way,” said Xie.

Meanwhile a few millions of dollars trickling in from the likes of New Zealand and Scotland won’t go far.

This stalemate has vulnerable nations looking for so-called “innovative finance”. That could mean anything from air passenger taxes to debt cancellation.

Barbados’ prime minister Mia Mottley is pushing a levy on fossil fuels – including during a phone call to John Kerry.

“It’s time for the private sector to stand up and we need to hold them accountable”, said Michai Robertson, the small island (Aosis) negotiator on loss and damage, on Wednesday.

Developed nations seem more open to this idea than to another demand on their public finances. Asked about it in a Cop27 press conference, after pausing for a plane to pass overhead, the EU’s Jacob Werksman said “we’re all looking for innovative finance”.

But it’s not going to be easy. Robertson said it was only in the “exploratory phase”. Getting buy-in from petrostates is an obvious obstacle.


Kerry’s offset plan is ‘raw cookie dough’

UN special climate envoy John Kerry came to Cop27 determined to have something to say about how to fund the transition from coal to clean energy.

Perhaps he recognises that the US’ $1 billion in loans for South Africa’s just energy transition deal didn’t cut the mustard. As he prepared for Cop27 the midterms were not looking promising for a climate-friendly majority to pass more support through Congress.

On Wednesday, Kerry sketched out a plan to use carbon credits to finance coal retirement and deploy solar, wind and geothermal energy in developing countries.

Philanthropic groups Rockefeller Foundation and Bezos Earth Fund are interested in the idea and have partnered with the US State Department to put flesh on the bones. It’s being called the Energy Transition Accelerator.

Kerry’s team “worked on this like crazy for a while,” he said. We first reported the idea at the start of November.

Yet the result “is not so much half-baked as it is raw cookie dough,” said Leo Roberts, of E3G’s coal transition team. There are virtually no details.

That makes it difficult to judge against the recommendations of UN chief António Guterres’ greenwashing taskforce, which set high standards for using offsets to meet net zero pledges.

Kerry promised “strong safeguards” and no repeating past mistakes, which allowed dodgy carbon credits to flourish.


Anti-Eacop campaigner confronts Japanese banker

A campaigner against the East Africa Crude Oil Pipeline confronts an adviser to Japan’s MUFG bank at Cop27. According to 350.org, campaigners asked the bank to say they would not support the pipeline and the bankers replied they could not comment on individual cases. (Photo: 350.org)


In brief…

Distancing – Sustainable Energy for All (SE4All) has pulled out of Team Energy Africa, a UN-backed initiative to mobilise private sector energy investments across Africa. The move comes after we reported on the involvement of NJ Ayuk, an oil and gas lobbyist and convicted fraudster.

Should China pay? – After reports that small islands (Aosis) want China to pay into loss and damage, Antigua and Barbuda’s prime minister and Aosis lead Gaston Browne told Climate Home: “All polluters, especially large ones, must contribute to the fund.” He added the “differentiated assessment” should include “historical emissions and the current level of development”.

Scramble for green hydrogen – Egypt and Norway have signed a deal to establish a 100 MW green hydrogen plant 100 MW in Ain Sokhna on the Red Sea. Egypt and Belgium also announced a green hydrogen project, Egypt Today reports.

Methane action – China has drawn up a draft national strategy on methane, its climate envoy Xie Zhenhua said at Cop27. The strategy will target the three main source of emissions – energy, agriculture and waste. They will set preliminary targets which are only preliminary because China has “rather weak statistical capability in this area”. He said public leveraged finance would be key.

Congress in balance – The Democrats are doing better than expected in the mid-term elections, winning Senate seats in Pennsylvania. At the time of writing, who will control the two chambers of Congress – the House and Senate – was unclear. Democratic control would improve prospects for climate finance.

Nature gets money – The Climate Investment Fund announced it will deploy over $350m for nature-based solutions, globally, starting in Egypt, the Dominican Republic, Fiji, Kenya. COP27 host Egypt is set to invest in adaptation of the Nile Delta area, which stands to lose 30% of its food production by 2030 as a result of climate change.

Latin America united – The Community of Latin American and Caribbean States (CELAC in Spanish) issued a joint call for new climate finance through sovereign funds and debt-for-nature swaps. Colombia’s Environment minister, Susana Muhamad, said debt swaps could help unify the region at climate talks, which is usually divided in two groups: left-leaning Alba nations and right-leaning Ailac.

Petroleum financing – The African Development Bank (AfDB) signed an agreement with OPEC Fund to “to expand their partnership to support sustainable economic and social development”. OPEC has contributed more than $1 billion to projects co-financed by the AfDB.

UK ups adaptation – The UK will provide £200 million ($228m) to the African Development Bank Group’s climate action window, a new mechanism set up for adaptation finance.

Weather watching wonga – Spain has announced it will fund the Systematic Observations Financing Facility, which aims to bring early warning systems to more countries. Norway has increased its donation. The beneficiaries of the facility are mainly African nations or small islands.

The post Cop27 bulletin: Could polluter taxes fund loss and damage? appeared first on Climate Home News.

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