COP27 Through the Lens of Nature: Sharm El Sheik’s Guest of Honour
For the first time, the UN Climate Change Community of Practice (COP), placed nature at the heart of its discussions to address the climate crisis, while at the same time, clearly linking nature to the financing discussion of nature-based solutions.
The Taskforce onNature Markets Secretariat was deeply engaged on the ground, contributing to the debates and discussions.
- Finance was center stage and much more focused on pay for performance models, such as finance instruments like sustainability linked sovereign debt, as well as the role of emerging markets herein, namely nature credit markets, including carbon and biodiversity credit markets. The key area of debate was that of data, specifically as it relates to measurement reporting verification (MRV) as well as its key role in good governance, traceability and transparent design of these new nature markets. NatureFinance’s partners, Hedera and ETH were actively engaged in this debate throughout COP27.
- Equity and climate justice was another paramount issue at the ‘African COP’.Above and beyond the loss and damage discussions, the call for an equitable way to address the climate crisis ran deep throughout COP27. While much of the debate focused on geopolitical inequities among North and South, equity was a theme across all conversations.
- Notable for the Taskforce was a marked silence on Governance, in particular the question of market and public policy governance innovations. On rare occasions the discussion was focused on the governance of nature credit markets, but only that relating to products, which is to say governance instruments rather than market wide governance. Furthermore, the inability to advance the negotiations on ArticleVI, with regards to carbon credits, indicates a worrying shift for the development and governance of these nascent markets, a topic the Taskforce remains deeply engaged in.
- Finally, the elephant in the room was the 1.5°C target, the increasingly elusive goal of the ParisAgreement. The global impacts of the war in Ukraine, from energy to global food security, has made many question the feasibility and consider scenarios for a world beyond 2.0°C. To our knowledge, NatureFinance and WBCSD were the only participants at COP27 to hold an event addressing market and public policy responses to the social, economic and political implications this would have on the natural world as we know it.
Having addressed many of these debates already, the Taskforce and its host,NatureFinance, demonstrated the connections between nature, development and financial market reform in pursuit of nature positive and equitable outcomes.
The discussion on performance based and KPI sustainability linked sovereign debt provided a promising indication of whatthis could look like in practice. Herein, the formal launch of the highly anticipated Sustainability-linked Sovereign Debt Hub, with the endorsement of theCOP27 Presidency and in partnership with ADB, AIIB, WB, EBRD, ICMA, and others, was a welcomed contribution.
The Taskforce remains engaged with many of these burning issues and will release a series of papers in the coming weeks which will address and contribute to these ongoing debates more directly.
Reflecting on the highlights from COP27, the Taskforce finds that nature rich countries have a unique opportunity to leverage their natural technology to lead in pioneering ways to address the climate crisis, while pursuing a new development model. Many of the geopolitical discussions at COP27 were charged for precisely this reason.
The Taskforce Secretariat left Sharm El Sheik convinced that the Taskforce’s mandate is timely, relevant and critical. The Secretariat will also be on the ground in Montreal for COP15.
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