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New Energy World magazine logo
New Energy World magazine logo
ISSN 2753-7757 (Online)

COP27: Progress on loss and damage; less on emissions reductions

30/11/2022

6 min read

UN Climate Change Executive Secretary Simon Stiell standing at podium and speaking at the closing plenary session of COP27 Photo: UNFCC
UN Climate Change Executive Secretary Simon Stiell speaking at the closing plenary session of COP27

Photo: UNFCC

Disappointing, after all the progress made in Glasgow a year ago – that was the general consensus on the outcome of COP27, which closed earlier this month and was held in very different market circumstances. Here, Nick Cottam takes a look at how UK energy policy and practice may proceed as a result.

If COP27 was a World Cup football match we might imagine a final score of Loss and Damage 2 Mitigation 0. Certain vulnerable states played a blinder in finally reaching an agreement to set up a fund to repair loss and damage caused by climate change. Meanwhile, however, any hardening of commitments to actually reduce emissions got kicked down the road (although hopefully not out of the park).  

 

What had been billed as Africa’s implementation COP proved a little nervous in this respect and no surprise there, as the war in Ukraine enters a new phase and winter in the developed north begins to bite. Short-term concerns about energy security provided a backdrop, alongside the sheer economic muscle of the fossil fuels lobby who made their mark at a hectic, often bad tempered, Conference of the Parties.

 

The Sharm-El-Sheikh COP, you could argue, was a win-win for the energy sector. With over 600 fossil fuel lobbyists wielding their influence and a gas-friendly host country, there was no commitment in the final text to phase out fossil fuels, building as had been hoped on last year’s agreement to phase down the use of coal.

 

But then the world has moved on dramatically since Glasgow and who can be surprised that COP27, with 35,000 delegates and 200 represented countries, kept all energy options on the table – for the foreseeable future at least.

 

Light on commitments
There was disappointment for many, both at the failure to commit anything more concrete on exiting fossil fuels and the assumption that a commitment to ‘lower emissions and renewable energy’ in the final text included gas. ‘Emissions peaking before 2025, as the science tells us, is necessary. Not in this text,’ commented an emotional COP26 President, Alok Sharma, as proceedings drew to a close. ‘Clear follow-through on the phase down of coal. Not in this text,’ he added.

 

In the meantime, the UK energy sector must scramble to come up with innovative solutions, from hydrogen hubs and smaller scale nuclear to wind and wave power. The UK can justifiably claim to lead the world in areas such as green hydrogen development and smaller scale nuclear power, which the government wants to account for up to 25% of projected electricity demand – some 24 GW – by 2050.

 

Rolls-Royce in the driving seat?
The fallout from COP27 includes an announcement that Rolls-Royce is heading a government-backed consortium to develop between 20 and 30 small modular nuclear reactors, the first for the Ineos petrochemicals plant at Grangemouth, Scotland. The first batch of these reactors would be on existing or decommissioned nuclear sites, each with the capacity to generate 470 MW of electricity, equivalent to more than 150 onshore wind turbines and enough to power around one million homes.

 

A new body established earlier this year by the UK government, Great British Nuclear, will be responsible for getting planning permission and carrying out other preparatory work on the new sites.

 

Meanwhile, the phase down of coal, as committed to at COP26, is unlikely to happen in the short term with supplies of gas remaining both expensive and unpredictable. Latest figures from Kpler, a commodity analytics firm, show that in October more than 560,000 tonnes of coal came into British ports, compared to 291,089 tonnes that arrived in October 2021, a 93% increase.

 

As noted, the world has moved on even though Prime Minister Rishi Sunak told his COP27 audience that climate security goes hand-in-hand with energy security.  

 

The latter, inevitably, is about putting everything into the mix, while the former, for the UK at least, must mean more onshore wind and new nuclear capacity, including the smaller scale reactors being developed by Rolls-Royce. This still leaves a perceived need for Hinkley Point and the now £30bn Sizewell C project but perhaps less large-scale nuclear in the future.

 

In the context of Hinkley and Sizewell C, the smaller, faster turnaround, more cost-effective modular reactors look very attractive indeed. The Scottish Nationalist Party’s Ian Blackford recently pointed out that tidal energy could produce up to 15% of the UK’s requirements as a replacement for nuclear, but that particular made-in-Scotland scenario is almost certainly not to be taken seriously.

 

Keeping 1.5 alive
Despite everything, there were lengthy COP27 discussions about how to ‘keep 1.5 alive’ or at least in range in the spirit of the Paris Agreement. To restrict global warming to within a 1.5°C increase on pre-industrial levels, global emissions would have to be reduced by 50% by 2030. That means weaning China and India off coal in double quick time while bringing more of those much vaunted green and blue hydrogen projects to fruition to help take up the load.

 

Despite an optimistic hydrogen session in Sharm El-Sheikh, this also looks unlikely to happen anytime soon. In the UK the gas distribution network may one day be made ready for a mix of hydrogen, but natural gas will remain the dominant partner for the foreseeable future. While China produces some 60% of the world’s hydrogen – when not in lockdown – most of this is made from fossil fuels.

 

The other option to keep 1.5°C in range, rather than the current 2.8°C trajectory, is more carbon capture and storage (CCS), another big investment but one which allows fossil fuels to stay in the mix while decarbonisation goes ahead. The science of climate change, says Richard Black of the Energy & Climate Intelligence Unit, means that you cannot meet warming targets while continuing to use unabated gas – carbon sequestration has to be on the agenda.

 

Chris Neidl, Co-Founder of the The OpenAir Collective, notes that: ‘It is no longer enough to just reduce emissions. We need to remove existing carbon dioxide from the atmosphere at scale, in tandem with the crucial work of reducing emissions and preparing for climate impacts.’ In other words, a score draw between mitigation and adaptation.  

 

A challenge for next year’s COP will be to determine a credible mechanism for the loss and damage fund, whose size, nature and structure has yet to be agreed.

 

We need to electrify the hell out of everything
Speaking shortly after this year’s COP at a Frontier Energy Summit in London, Scottish Power’s Chief Executive Keith Anderson didn’t pull his punches. ‘We need to electrify the hell out of everything in this country and we need to do it over the next two decades,’ he said. ‘The simple message to governments and regulators is this change is coming and it’s coming faster than you think. We need to invest in the future of the network, and we need to decarbonise transport and heat.’

 

This is understood as a key element of transition – the issue being how fast you can make the change and at what cost to the economy. A keynote speaker at the Frontier Summit, Anderson noted that the technology was already there. It was simply a question of making the investment in what the UK Labour Party now identifies as the green economy.

 

This, claims Labour Party Leader Keir Starmer and his Shadow Cabinet, would involve his (potential future) government setting up a state-owned organisation, GB Energy, to create and own home-produced sustainable power, including a larger proportion of onshore and offshore wind assets – and presumably maintain a stake in those Rolls-Royce turbines.

 

The Kpler figures show that, in the short term at least, it is simply a question of keeping the power switched. In the first 10 months of this year the UK imported more than 5.5mn tonnes of coal, exceeding the 4.2mn tonnes imported throughout the whole of 2021. Coal may be the most polluting fuel, but it is currently the UK’s most cost-efficient option in the face of sky-high gas prices, comments the firm. The extra coal is thermal coal and pretty much all of it is being used to generate electricity.

 

The priority for the UK and other countries returning from the heated deliberations of COP27 is the need for a more balanced, more sustainable energy policy to provide a shield against future energy shocks.

 

A just transition for all
What comes out of the latest COP is another glimpse at how rich and developing countries must work together to bring about a just transition. That means a fund to help vulnerable states repair loss and damage caused by climate change while also seeking to reduce carbon emissions through sequestration and the deployment of zero-carbon energy wherever possible.

 

It also means supporting initiatives such as the Just Transition Partnership, which currently has promised funding to the tune of more than $20bn and is supporting South Africa and now Indonesia in their efforts to cut carbon.

 

In short, there have to be new and innovative mechanisms to get rich world funding to the parts which need it most. ‘The loss and damage fund was hugely significant for what it means to the climate process,’ says Dr Nina Seega of the Cambridge Institute of Sustainability Leadership. ‘The way we do business will have to change fundamentally and that means resilience and adaptation alongside mitigation.’

 

A challenge for next year’s COP, to be hosted by the United Arab Emirates, will be to determine a credible mechanism for the loss and damage fund, whose size, nature and structure has yet to be agreed.

 

Another key challenge for delegates at COP28 will be to look at the whole area of how international finance works to address climate change. Energy transition in developing countries needs private capital and it will be for the development banks to take a lead on this. To keep the World Cup analogy alive: there is still everything to play for.