The global community will be watching closely to see if COP27 can help drive implementation and action from countries committed to the Paris Agreement and to targets set at COP26.
In October 2022, just ahead of the 27th Conference of the Parties (COP27), which will be hosted by the Government of the Arab Republic of Egypt from November 6 to November 18, the United Nations released its Emissions Gap Report1 for 2022. The report shows that even after taking Glasgow commitments into account, global temperatures are expected to rise by 2.8° C by the end of the century. According to the World Economic Forum’s Global Risks Report 2022, climate action failure ranks as the most severe risk facing the world over the next decade (Figure 1).2
Therefore, stakes are high for the 35,000 delegates expected to be in attendance including US President Joseph Biden and more than 100 heads of state. The global community will be watching closely to see if COP27 can help drive implementation and action from countries committed to the Paris Agreement and to targets set at COP26 (see Post COP26: Outcomes and Opportunities).
Figure 1: Climate Action Pegged as Top Global Risk, per WEF (Risks in Order of Severity)
Given the growing calls to action, the to-do list for participating countries is long and important. We outline several of the key areas of potential focus during the two-week conference:
COP27 will be held in Sharm El-Sheikh, Egypt. As host nation, Egypt has defined the summit’s four key goals as mitigation, adaptation, finance, and collaboration:3
As chair of the G77 group of developing nations, Pakistan is expected to be vocal on the issue of who should pay for climate-related disasters. The country experienced the worst natural disaster in its history this year, as heavy rains and flash flooding displaced 33 million people, destroyed 1.7 million homes, and took the lives of nearly 1,500 citizens.4 Climate change may have increased the rainfall intensity by up to 50%, according to the World Weather Attribution group.5 In recent years, countries such as Haiti and the Philippines have also experienced weather patterns that have devastated their lands and citizens’ livelihood.
At the same time, these nations contribute relatively small amounts to global greenhouse gas (GHG) emissions versus larger emitters, such as China (Figure 2). For example, Pakistan’s total CO2 emissions for 2021 ranks 28th globally.6 On a per capita basis, Pakistan ranks even lower at 152nd. Similar trends play out in Haiti, Myanmar, Philippines, and Puerto Rico; five countries that have been most affected by climate change in the 21st century.7
Figure 2: The Lowest-Emission Countries Bear Significant Costs
Given the impact of climate change on global food supplies and its disproportionate effects on developing countries, the scarcity of food is expected to be a major topic of discussion at COP27. Many nations, particularly in sub-Saharan Africa, are expected to experience a population boom over the next few decades. However, only three percent of public climate finance goes towards food systems.8 This is true even though food insecurity is one of the most inequitable facets of society, as over 820 million people face food shortages and three billion people lack access to a healthy and nutritious diet.9
However, it is undeniable that the global food system is a large contributor to global GHG emissions and is the primary driver for biodiversity loss.10 Squaring the need to feed its citizens while also mitigating the impact of climate change will be a key challenge for countries, particularly those that are experiencing significant population growth. Accordingly, for the first time, there will be a dedicated Food Systems Pavilion at the conference to tackle these thorny issues.
We look forward to sharing takeaways from COP27 in a few weeks.
1 UN Environment Programme – Emissions Gap Report (27 Oct 2022)
2 World Economic Forum: Global Risks Report 2022. 11 January 2022 (Global Risks Report 2022 | World Economic Forum)
3 COP 27:Vision & Mission
4 Peshimam, Gibran Naiyyar and , Syed Raza. “Death Toll in Pakistan Floods Nears 1,500.” Reuters. September 15, 2022. And World Weather Attribution: Climate change likely increased extreme monsoon rainfall, flooding highly vulnerable communities in Pakistan (14 September 2022).
5 World Weather Attribution: Climate change likely increased extreme monsoon rainfall, flooding highly vulnerable communities in Pakistan (14 September 2022).
6 European Commission – Emissions Database for Global Atmospheric Research (EDGAR) EDGAR - The Emissions Database for Global Atmospheric Research (europa.eu)
7 Iberdrola: Countries most affected by Climate Change
8 Global Alliance for the Future of Food: Untapped Opportunities: Climate Financing for Food Systems Transformation (10 October 2022) https://futureoffood.org/wp-content/uploads/2022/10/climatefinancereport-english.pdf
9 The Food and Land Use Coalition, “Growing Better: Ten Critical Transitions to Transform Food and Land Use.” September 2019, the latest report available.
10 Citi, July 19, 2022. “Food and Climate: Creating Sustainable Food Systems for a Net Zero Future.”
Information Classification: Limited Access
State Street Global Advisors Worldwide Entities
The trademarks and service marks referenced herein are the property of their respective owners. Third party data providers make no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the data and have no liability for damages of any kind relating to the use of such data.
The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.
The returns on a portfolio of securities which exclude companies that do not meet the portfolio’s specified ESG criteria may trail the returns on a portfolio of securities which include such companies. A portfolio’s ESG criteria may result in the portfolio investing in industry sectors or securities which underperform the market as a whole.
All information is from SSGA unless otherwise noted and has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.
The views expressed in this material are the views of Michael Andeberhan through the period ended October 31, 2022 and are subject to change based on market and other conditions.
This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Investing involves risk including the risk of loss of principal.
This communication is directed at professional clients (this includes eligible counterparties as defined by the appropriate EU regulator or applicable Swiss Regulator) who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) should not rely on this communication.
The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the Markets in Financial Instruments Directive (2014/65/EU) or applicable Swiss regulation. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research.
© 2022 State Street Corporation.
All Rights Reserved.
Tracking Code: IDXXX-5081933.1.1.GBL.RTL
Expiry Date: November 30, 2023