“COP27: Did it deliver for developing countries?” Event reflections

Recently I was at an event by the UCL Institute for Sustainable Resources’ event on “COP27: Did it deliver for developing countries?”. My reflections:

1.COP27 did not deliver for the developing world.
2.The justified rage from developing world.
3.Not just exploitative, now “extractive capitalism”.
4.All positive routes lead to deep reform of global finance.
5.Main action is outside the COP negotiations


One of my hats is Honorary Lecturer at the UCL Institute for Sustainable Resources. The institute exists to “generate knowledge in the globally sustainable use of natural resources and train the future leaders in the field”. I co-lead one of the Masters modules, on business, innovation and sustainability (more here, including the interview series I do for the students which is also available as a podcast).

ISR held an event on COP27: Did it deliver for developing countries?, ably moderated for Institute Director Jim Watson with Bernard Tembo (co-founder of Tec Analytics, Zambia), Tom Mitchell (Executive Director of IIED) and Jacqueline Kimeu (WWF in Kenya). My notes aren’t good enough to attribute quotes, but all were of them were excellent.

It was a rich and varied discussion. I had five reflections.

1.COP27 did not deliver for the developing world.

So, did it deliver for developing countries? A big fat no.

There were some significant agreements for developing countries: Loss and Damage, and adaptation.

Loss and Damage, as CarbonBrief explains here, is “a term used to describe how climate change is already causing serious and, in many cases, irreversible impacts around the world – particularly in vulnerable communities.”

COP27 agreed to:

establish new funding arrangements for assisting developing countries that

are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage, including with a focus on addressing loss and damage by providing and assisting in mobilizing new and additional resources, and that these new arrangements complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement”

This was a significant and hard won step, as CarbonBrief explain here. Many of the most vulnerable nations had been campaigning on this for years. It acknowledges that those countries most able to help should help those who are most vulnerable (which is not the same as those most responsible should help).

But, the panellists made it clear that this is only a small step in a longer journey. The old hands had seen this before, and characterised it as “CIA delay 101”. Bury a proposal in ‘process’ of more research, more details figured out, more consultation. It will take years to set up the fund, and even then it is unlikely to get the scale of money that is required.

Adaptation countries agreed to develop a framework for delivering the goal and tracking progress on a global goal for adaptation (the detail from CarbonBrief is here). There was also an agreement to prepare a report into doubling adaptation finance — an example of ‘delay by process’.

Even these two supposed victories were partial, late, too small, under-funded and the next steps delayed by process.

The bigger picture is that we need larger and faster reductions of greenhouse gas emissions, so that there is less need for both Adaptation, and Loss and Damage. But the COP did not see a big stepping up in mitigation from countries.

The previous COP26 in Glasgow asked countries to revise their targets every year, and there would be a stocktake of overall progress every year, rather than every 5 years. There was great hope that this would act as a ratchet mechanism and keep alive staying under 1.5C of warming.

There was weak evidence of the ratchet mechanism working in COP27. There was little revisiting and strengthening of Nationally Determined Contributions (NDCs — what each country gives as its own voluntary target). CarbonBrief walk through all these disappointments in mitigation here.

There were slivers of progress by business outside of the negotiations, for instance the cement industry joining the First Movers Coalition. But overall there was drift and delay on actually reducing emissions.

2.The justified rage from developing world.

The speakers were clear on their disappointment, all within professional bounds. The questions from the floor expressed the justifiable rage of the developing countries.

That has to be the first response of anyone faced with the sheer long-term injustice. The countries least responsible are getting hurt the most now, and will be hurt most in the future. The countries that have done best out of fossil energy are often also the former colonial powers, who distorted and de-industrialised the economies of their colonies to serve the home country first.

For Africa and many other developing countries, history is repeating, this time not as farce, but as an even deeper tragedy.

3.Not just exploitative, now “extractive capitalism”.

In the discussions, to describe what was happening to the developing world, many people used the term “extractive capitalism”.

My intuition on the evening was that I had been hearing that phrase much more recently, and previously people would have said exploitative capitalism. This Google Books search gives some credence to my instinct: extractive capitalism is a term on the rise.

As with any rising term, I don’t think there is one agree definition — and I’m also sure there is a whole history of the term which I am missing. A bit of Google search turns up this explanation of ‘extractive capitalism’ as where a “small elite securing an excessive slice of the economic cake”.

On the night people were using extractive capitalism as if it meant a global political economy where any value add generated gets taken by a powerful elite, usually far away from the people and places which were doing the work.

For instance, any transition to renewable energy will require metals and materials. There is a literal extractive industry, to get these out of the ground and into manufacturing supply chains. But the deeper point here is that little of the value of that mining activity accrues to the local communities or governments where the mines are located. All too often the vast majority of the value added goes to global corporations and the countries where they are based.

Outside the event, I have heard people use extractive capitalism to mean the set up since even before the industrial revolution. For many people I speak with, all really existing forms of capitalism have been extractive; over the last 300+ years the form has shifted from mercantile through industrial into consumerism.

Whether or not that is true, Will Davies on the LRB makes this point: “The picture painted by [Resolution Foundation report on the UK economy of the 2020s] Stagnation Nation is familiar from the work of many political economists, such as Brett Christophers and Jodi Dean, who have tracked the drift of contemporary capitalism towards ‘rentierism’ and even ‘neo-feudalism’.”

My reflection is that many more people are describing the capitalism we are currently experiencing as extractive, rather than just exploitative.

Typically, for these people the opposite is regenerative capitalism (for instance at here The Capital Institute). That again happened in the event, with some speakers arguing for regenerative economic.

I have my doubts about the regenerative metaphor. Advocates typically say that nature is regenerative, but I don’t think it is. Nature adapts to circumstances, starting from where it is. That may be to go back to the state before the disturbance, or it may not. The “re-” in regenerative implies a return. But my understanding is that nature is generative not regenerative.

I wonder if the coming decade will see the rise regenerative economics, and then of generative economics. We shall see.

4.All positive routes lead to deep reform of global finance.

Almost every answer from the panelists ended up talking about global finance (‘”‘Point 1, leads to Point 2, to Point 3, which must lead to global finance’). They control the money that is needed to invest. They require the returns which push companies to maximise profits, exploiting people and nature. They receive a disproportionate amount of the value generated by economic activities. They are the beneficiaries of extractive capitalism.

As I know from my role as chair of EIRIS Foundation (charity with a mission to pioneer the next steps for sustainable finance), and as a tutor on the CISL Sustainable Finance online course, the global finance sector has played a huge role in driving the current status quo.

Enough money and financiers are now able to be beyond national borders. They behave globally rather than an internationally (‘between-nations’). That means a national government or a company is always competing against all the other governments or companies for funding. The global finance sector accumulates the power to dictate terms over everything that needs finance. Which is everything. The players in global finance dictate those terms to drive their own benefit.

In this way, having a global finance sector becomes an accelerator of the extractive mode of capitalism, and seemingly inevitably so.

That’s not to say international finance wasn’t important in the past. London as a financial centre was crucial to the British Empire, and to beating Napoleon after all. But I’d argue today that being global gives the finance sector a different order of importance, and makes it much, much harder for nations to shape finance for national concerns.

Anyway, the hope is of using that huge power for a better future. If global financial can dictate terms, can we not just make those terms sustainable?

There were some of those hopes in the event. Speakers were most excited by The 2022 Bridgetown Initiative,

This argues for reform of the global financial architecture:

“We cannot be good at rescuing banks but bad at saving countries.

“While addressing these immediate needs, we must also lay the path toward a new financial system that drives financial resources towards climate action and the Sustainable Development Goals (SDGs). These goals require the rapid scaling up of investment in the low-carbon transition in the energy, transport and agricultural sectors to safeguard the 1.5-degree Celsius target, providing for substantial investment in building climate-resilience and sustainability and critical investments in public health and education.”

At the G20 conference, just before the climate COP, President Macron of France revealed that Paris will host a conference next June that will seek to develop “a new financial pact with the South”.

5.Main action is outside the COP negotiations

At the event the speakers also highlighted how much of what was good was not in the negotiations themselves. There were business announcements. There was civil society action.

More generally, it seems to me that the main action is outside the formal COP process. And I’m not just saying that because the next one is in the UAE, which has a strong reliance on fossil fuels (and so the best realistic outcome for the formal proceedings next year is no backsliding).

For one thing, the COP agreements have to be full consensus. One country says no, and there is no agreement. There are a number of countries that are hugely reliant on fossil fuels. They will always be able to slow down negotiations. That isn’t a failure of the COP, or the UN. It is a reality of having nation states with different interests. Unless you can create a world government, or are able to conquer Saudi Arabia, (both very bad ideas, in my view) then we have to accept the reality of sovereign nations.

For another, the COPs have delivered a direction and just-enough rules. The Paris Agreement commits countries to “Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels”.

Globally, what needs to happen now is transforming economies. And that doesn’t happen through UN conferences. It happens through the global architecture which frames economic activity: the World Trade Organisation agreements, the World Bank, the International Monetary Fund and so on.

It happens at the national level too. We need governments to enact policies which drive sustainability transformations, and make the unsustainable status quo harder to maintain. They won’t do that through well-argued policy papers (alas). We need national political movements (both moderate flank and non-violent protest direct action like Just Stop Oil), which push political parties to take climate change seriously.

Many business sectors are also more global than they are national or international. We need those sectors to aggressively drive for Net Zero. I’m a big fan of the We Mean BusinessAmbition Loop: climate action from business driving climate policy from governments.

Overall, the climate COPs have an importance. But responding to climate is a whole-of-society and whole-of-economy endeavour. And that means the main action is outside of the realpolitik of the formal negotiation process. Indeed, the realpolitik of influencing the negotiations is that countries will only shift when they have to, which means driving all that stuff outside the formal process.


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