COP 27 and the VCM market

This Monday marked the beginning of the second week and halfway point of the COP-27 conference in Sharm el-Sheikh, Egypt.

Last week in his opening speech, UN Secretary General António Guterres stated that, "Human activities are the cause of climate change. Human actions need to be the solution.” There is evidently no doubt that human activities, especially from the combustion of fossil fuels and industrial activity, are indeed the main driver of climate change. A report released at COP27 today revealed that emissions from fossil fuels could be up to three times higher than oil and gas companies claim (1). The urgency of taking climate action swiftly and impactfully is acute, with scientists warning that global temperatures must be kept to 1.5°C by 2100. Surpassing this figure would lead to irreversible changes to the climate system, widespread destruction of ecosystems and an unimaginable toll on both nature and human life.

As government officials and leaders from around the world join together to create a global climate action agenda, a slew of different climate solutions are being discussed and examined. Increasingly, officials are looking to climate-related technology as a means of mitigating climate change (approaches like direct carbon capture, for example). The goal is simple: According to the UN’s IPCC, CO2 emissions need to be cut 45% by 2030. But how can natural processes and services be harnessed in order to contribute to this goal?

Conversations between high-level government officials, climate envoys, and global envoys stress the importance of finding strategies to ramp up financing for nature-based climate solutions. Reducing deforestation and restoring, conserving and sustainably managing forest cover and lands is a crucial factor in capturing/storing carbon while simultaneously building resilience against the unavoidable effects of climate change that we are already seeing.

As such, the Forest and Climate Leaders’ Partnership (FCLP), which consists of 26 countries that account for over 33% of the world’s forests, was officially launched at COP 27 this week (2). This voluntary partnership, co-chaired by the United States and Ghana, is dedicated to halting and reversing forest loss and land degradation by 2030. Some of their key action areas include the mobilization of public and private finance, a global collaboration on the sustainable land use economy, and importantly, the scaling and strengthening of carbon markets. These actions come with good reason: the UN had previously stated that “Nature-based solutions can potentially contribute over one-third (11.3 GtCO2e per year) of the total climate change mitigation needed by 2030 to keep global warming to just below 2°C” (3) while simultaneously securing economic prosperity, biodiversity, and building resilience across vulnerable lands. In this manner, nature-based climate solutions are amongst the most effective and important climate actions that can be taken. Ursula von der Leyen, the President of the European Commission summarized this point perfectly by stating that, “Only with healthy forests we can deliver on our shared climate commitments under the Paris Agreement” (4).

(1) (2) (3) United Nations Environment Programme (2021). Becoming #GenerationRestoration: Ecosystem restoration for people, nature and climate. Nairobi. (4)