What happened at COP27
Robert Stavins reports that the most dramatic decision of COP27 was the establishment of the “Loss and Damage” fund, a concept put forth in 1991 by Vanuatu, a small island nation in the Pacific, which suggested the creation of a United Nations fund to help pay for the consequences of rising sea levels. This is an idea that has remained very controversial until this year when China, the European Union, the US and a few other developed countries came out in support of the creation of the fund. The size of this fund could be substantial: only this year’s floods in Pakistan caused $40 billion in damages. Are the countries which expressed support to the “Damage and Loss” fund ready to commit monies to it? Stavins is not convinced. The US might not be able to commit any funds due to the current political situation, while China announced that as a “developing country” it will not be responsible for any contributions to the fund!
This year was officially the “Implementation COP,” and next year’s COP28 in Dubai, United Arab Emirates (UAE), is officially the “Global Stocktake COP.” But if COP27 was, in effect, the “Loss & Damage COP,” we might anticipate that the incoming UAE presidency of COP28 will make it the “Carbon Removal COP,” with renewed attention to carbon capture & storage, carbon capture & utilization, direct carbon removal, as well as solar radiation management. If that happens, it will be controversial, like loss & damage was, but for different reasons and with very different parties.
What Really Happened at COP27 in Sharm El-Sheikh?
By: Robert Stavins – Harvard University
A coherent set of climate change mitigation policies
In this commentary Blanchard et al. propose a portfolio of climate mitigation policies which if implemented in a coherent way they can have a high impact on reducing emissions. These are:
- Carbon pricing done better. There are four possible approaches: a) by setting a floor and a cap for the price of carbon emissions, enabling some price stabilization; b) through the creation of an independent carbon board—a Carbon Central Bank—in charge of adjustments; c) through government issuance of securities that would compensate allowance holders if the future price of carbon fell relative to the preannounced path.
- An intense R&D effort: by setting achievable technological goals for the private sector or through the creation of an agency which will finance high-risk, high-payoff research by the private and public sectors in Europe to address key challenges for green technologies.
- Complementary actions such as such as standards, bans, and targeted subsidies.
- Domestic and international compensation to those who bear the cost of climate change mitigation policies.
The portfolio of economic policies needed to fight climate change
By: Olivier Blanchard, Christian Gollier, Jean Tirole – Peterson Institute, Toulouse School of Economics
