Living With Climate Change: COP27 wins and losses: U.S. on the hook to pay for its pollution; natural gas gets nod as transition fuel

The deal, called “loss and damage” in summit shorthand, was struck as the U.N.’s Conference of Parties, or COP27, gaveled to a close near dawn Sunday in Egypt. Official talks ended Friday, but negotiations extended into the weekend.

Read: Historic compensation fund approved at U.N. climate talks

It was a big win for poorer nations which have long sought money — sometimes viewed as reparations — because they are often the victims of climate-worsened floods, famines and storms despite contributing little directly to the pollution that heats up the globe. It took last-minute, pre-summit negotiations to even get the topic on the official agenda.

“Three long decades and we have finally delivered climate justice,” said Seve Paeniu, the finance minister of island nation Tuvalu, according to the Associated Press. “We have finally responded to the call of hundreds of millions of people across the world to help them address loss and damage.”

Pakistan’s environment minister, Sherry Rehman, said the establishment of the fund “is not about dispensing charity.” Pakistan, hit by devastating drought and more, dominated climate-change headlines this year.

“It is clearly a down payment on the longer investment in our joint futures,” she said, speaking for a coalition of the world’s poorest nations.

According to many conference participants, the U.S. was a late-stage roadblock to establishing this official payout language, though it signed off in the end. U.S. participation was also impacted once chief climate negotiator John Kerry tested positive for COVID-19, although he continued to work from his hotel.

How does COP27 ‘loss and damage’ work? And where’s China?

According to the agreement, the fund would initially draw on contributions from developed countries and other private and public sources such as international financial institutions, including the World Bank and the International Monetary Fund.

While major emerging economies such as China wouldn’t automatically have to contribute, that option remains on the table. This is a key demand by the European Union and the U.S., who argue that China and other large polluters currently classified as “developing” countries have the financial clout and responsibility to pay their way.

The fund would be largely aimed at the most vulnerable nations, though there would be room for middle-income countries that are severely battered by climate disasters to get aid.

Getting serious about methane

Attention on methane, a more-potent but shorter-lasting greenhouse gas than carbon, was considered a major win at the summit. Some 150 countries have now signed on to the voluntary Global Methane Pledge, an official effort to cap the release of the GHG whose reduction presents perhaps the easiest way to reduce the global warming.

Read more: Natural gas-focused methane pact expands at climate summit, minus China

With the pledge, countries representing 45% of global methane emissions have vowed to reduce their emissions by 30% by 2030. If methane-reduction pledges are met, the result would be equivalent to eliminating the GHG emissions from all of the world’s cars, trucks, buses and all two- and three-wheeled vehicles, according to the International Energy Agency.

China, the world’s largest polluter by some measures, has not signed the deadline-based pledge, but has agreed to reduce methane emissions.

Still largely voluntary

COP27 talks wrapped without concrete progress on the contentious issue of shifting an overall 1.5 degrees Celsius temperature limit from a voluntary marker to an established requirement of nations. Most voluntary pacts among nations and private entities, including a vow by Amazon.com
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Ford Motor
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Apple
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and others signing on to a “First Movers” pledge, loosly use the 1.5-degree limit set in 2015 when talks took place in Paris.

Private banks, insurers and institutional investors representing $130 trillion said they would align their investments with the goal of keeping global warming to 1.5 degrees Celsius, toward a pledge to net-zero emissions economy-wide by 2050. Advocacy groups cheer the pledge and its expanding roster but are also keeping up pressure on the signatories to speed up progress toward this goal and to stop undermining the pledge with fossil-fuel investment.

Read: Here’s where the big U.S. banks stand up and fall down on climate change

The Egypt pact was also void of firmer language on emissions cutting and the desire by some officials to target all fossil fuels
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for a phase-down.

Natural gas, which is relatively cheaper to produce than other fossil fuels, has been the major alternative to more-polluting coal in electricity generation. Still, it has its own emissions risk.

In the U.S., for example, electricity is the most common energy source used for cooking — electricity often powered by gas. Still, about 38% of U.S. households use natural gas directly for cooking, according to the U.S. Energy Information Administration.

Natural gas providers also own an established pipeline infrastructure that may serve alternative energy, and is pushed by the industry as a viable alternative alongside solar, wind
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  and other means. The industry also promotes its efforts to cap methane leaks.

Related: World’s richest nations stick to 1.5-degree climate pledge despite energy crunch

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