Energy and ESG Editor, Reuters Digital
It's day two at COP27 and time to figure out who foots the bill for climate damage. Small island nations suffering the brunt of climate change due to ocean storms and rising sea levels are demanding Big Oil pays.
Speaking on behalf of the Alliance of Small Island States, Antigua's prime minister Gaston Browne told delegates in Egypt on Tuesday: "The oil and gas industry continues to earn almost 3 billion United States dollars daily in profits. It is about time that these companies are made to pay a global carbon tax on their profits as a source of funding for loss and damage."
He's not the only one thinking of making big corporations pay - the United States wants businesses to pay countries to stop burning coal via carbon markets, in a proposal it will announce at the conference this week. The initiative, expected to launch on Wednesday, proposes that companies buy carbon credits and the proceeds be used to fund renewable energy projects in countries seeking to replace fossil fuels such as coal, people familiar with the matter said.
Elsewhere, a report shows that developing countries need to work with investors, rich countries and development banks to secure $1 trillion a year in external financing for climate action by the end of the decade and to match that with their own funds.
The report – commissioned by the current and previous climate summit hosts, Egypt and Britain – said the funding was required to cut emissions, boost resilience, deal with damage from climate change and restore nature and land.
And finally, world leaders will take the stage again today at COP27 including Prime Minister Shehbaz Sharif of Pakistan, which was recently hit by devastating floods, and the leaders of small island nations Tuvalu and Antigua and Barbuda, which are susceptible to hurricanes and sea-level rise. Ursula von der Leyen, President of the European Commission, will also speak today, along with European Council President Charles Michel, South African President Cyril Ramaphosa and dozens of others.
More at COP27
- Austria will provide 50 million euros (dollars) to developing countries facing unavoidable damage and losses caused by climate change as it joins a small group of European nations to offer such funds, the country's climate ministry told Reuters.
- BP has signed an agreement with Mauritania to explore ways to develop low-carbon hydrogen on a large scale in the West African country, the British energy company said.
- Australia's corporate watchdog is investigating several companies and financial institutions for "greenwashing", or exaggerated claims regarding environment-friendly investment and products, a senior official said.
- Drought-stricken countries, led by Senegal and Spain, announced an alliance to help each other manage water scarcity by sharing technology and expertise.
- More than 25 countries at the COP27 climate talks launched a group they said would ensure they hold each other accountable for a pledge to end deforestation by 2030, and announced billions of dollars to finance their efforts.
- New EU budget rules should take into account the need to invest in climate policies and defense when setting the pace for debt reduction, Internal Market Commissioner Thierry Breton said in an interview with Dutch financial daily FD.
- Botswana has won its bid to host the permanent secretariat of the Kimberley Process (KP), the grouping that certifies that diamonds are not used to fund rebel groups, but its members remain divided over Russia's invasion of Ukraine.
- Financial regulators warned Britain's government against "political rulemaking" which would damage the City's global competitiveness and reputation for independent oversight of markets.
- Insight: Billed as Africa's COP, the Egyptian presidency hosting this year's United Nations global climate summit hopes it will deliver desperately needed commitments to help the continent meet its development goals and to adapt to a hotter world.
Commenting on the launch of the Transition Plan Taskforce Disclosure Framework at COP27 today, Bridget Beals, partner and co-head of climate risk and decarbonization strategy at multinational financial services firm KPMG UK, said:
"This marks another vital step forward in guiding UK businesses from intent to delivery of real climate action. If we are going to stay on course for limiting global temperature rises to 1.5C a key challenge for businesses is to figure out ‘how’ to reach their net zero goals – with a clear implementation plan that stacks up.
"Many UK businesses will be impacted by this latest development as we expect to see the outputs of the Transition Plan Taskforce's work integrated into climate disclosure listing rules, enabling investors and other stakeholders to hold businesses to account to ensure real climate action is taking place. Even those not directly exposed to the new rules can expect to see real world impacts though supply chain interconnectivity and the choices and actions their customers and suppliers make in order to deliver on the expectations.
"Importantly this comprehensive guidance builds upon the recommendations of the Taskforce for Climate-Related Financial Disclosures (TCFD), therefore allowing companies to make use of work already done to create meaningful transition plans that are robust and credible."
Column: There are several ways to slice and dice data on CO2 emissions to help inform discussions on how to monitor, manage and mitigate global pollution trends - and determine a fair split in the responsibility for causing the climate crisis in the first place.
Quote of the Day
"The climate crisis is creating a feedback loop where financial institutions are financing activities that are accelerating irreversible climate change. This in turn increases their exposure to climate-induced financial crises."
Julia Symon, head of research and advocacy at Pan-European NGO Finance Watch
- Egyptian Prime Minister Moustafa Madbouly will highlight the challenges and opportunities in climate finance for climate action in the first speech of the day at COP27 on Nov. 9.
- Finance ministers convene to reflect on their commitment to climate action at COP27 on Nov. 9
- The EU top court rules in a case regarding the protection of minorities on Nov. 9.
- What do terms like green bonds, vehicles and structures, sustainability-linked bonds and social bonds really mean? Find out in our Reuters factbox on Nov. 9.
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