COP27 negotiations run into overtime as delegates haggle over reducing emissions: Climate negotiators from almost 200 countries have reportedly sealed an agreement to set up a fund to help poor countries face the impact of climate change but discussions over reducing emissions remain deadlocked. The high-stakes talks, which were supposed to have wrapped in Sharm El Sheikh on Friday, appear to have made progress the contentious debate over “loss and damage” but the decision over how fast to reduce emissions is still being discussed, with some countries pushing for a tougher global agreement that will “keep 1.5°C alive.”

A victory for the global south? After more than two weeks of tense negotiations, multiple outlets reported yesterday developing and developed nations had reached an agreement to set up a fund that will pay out to poorer countries on the front lines of the effects of climate change. Rich countries have for years avoided having to discuss the loss and damage question, rejecting the idea that they could be held liable for their outsized contributions to global CO2 emissions since industrialization began. But in a surprise turn on Thursday, the EU came out in support of setting up a fund on the proviso that high-emission countries such as China make contributions and that countries agree to adopting tougher action on cutting emissions. On Saturday, the US agreed to the creation of a fund after arguing against the concept just days earlier.

The small print will be key: Few details about the negotiations have been offered by insiders, and many questions about how the fund will work remain unanswered. Officials in the Biden administration have briefed some in the media that the fund will not use compensation to create legal liability. They said the US is working to sign the agreement on the L&D fund, with one official adding that the administration had requested USD 11.4 bn from Congress for international climate aid.

“Keeping 1.5°C alive”: The main sticking point now is how fast to slash emissions and phase out the use of fossil fuels. Countries like Russia and Saudi Arabia are refusing to sign on to the EU and India’s demand to phase down “all fossil fuels,” while the EU had earlier threatened to walk out of the talks if the agreement didn’t keep the 1.5°C target alive. “We’d rather have no decision than a bad decision,” the bloc’s climate chief, Franz Timmermans, said. “Our message to partners is clear: We cannot accept that 1.5°C dies here and today.” The US has also come out in support of calls for include “all fossil fuels” in the text of the agreement, Bloomberg reported.

Egypt’s proposal didn’t go down too well: A proposal put forward by Egypt was criticized for backtracking on pledges made at last year’s COP26 in Glasgow, which made a commitment to limiting global warming to 1.5°C, according to the Associated Press. COP27 President Sameh Shoukry defended the plan during a presser (watch, runtime: 10:02), saying that a majority of parties had backed the text, and calling for parties to “rise to the occasion” and “show the necessary flexibility.”

Shoukry calls for methane holdouts to sign up: Shoukry urged countries that haven’t joined the global methane pledge to sign up and commit to reducing their methane emissions.

The world’s two biggest polluters are continuing to mend climate ties: Talks between China and the US were “candid, friendly, positive and active,” China’s top climate negotiator said yesterday, according to Reuters. The two countries will continue cooperation on climate change after the summit is over, Xie Zhenhua said. This comes nearly a week after US President Joe Biden and Chinese Premier Xi Jinping agreed to restart climate cooperation during the G20 summit.

The ongoing talks are the big story everywhere this morning: AP | Reuters | FT | Bloomberg | WSJ | BBC.

USD 10 BN IN NWFE PLEDGES-

The climate funding agreements we secured at COP for the Nexus on Water, Food and Energy (NWFE) program add up to nearly USD 10 bn, International Cooperation Minister Rania Al Mashat told Reuters on the sidelines of COP27. The investments already secured for the USD 15 bn program — which include more than USD 550 mn in concessional loans, debt swaps, and grants from the US, Germany and other European countries — can provide a “template” for other developing countries to access climate-related finance, Al Mashat said. Many countries have already started talking to multilateral development banks about launching programs like NWFE, she added. The program includes an energy project worth USD 10 bn and eight food security, agriculture, and irrigation and water projects.

GOOD NEWS FOR OUR ENERGY EXPORT AMBITIONS?

Fresh renewables agreements could help Egypt accelerate energy exports to Europe: Agreements on renewable energy projects signed during COP27 could help Egypt accelerate plans to export electricity to Europe, potentially within five years, Oil Minister Tarek El Molla told Bloomberg on the sidelines of the summit. Egypt has been preparing to link its electricity grids with Greece and Cyprus through a subsea cable as part of the USD 4 bn EuroAfrica Interconnector project since 2018, while Europe is facing an ongoing energy crisis as it phases out reliance on Russian fossil fuels. “The momentum that we got from having hosted COP27 will help us to boom and speed up projects for emissions reduction,” El Molla said.

WASTE MANAGEMENT-

Egypt to build EGP 4.2 bn waste recycling facilities + sanitary landfills: The Local Development Ministry is within days set to sign contracts worth EGP 4.2 bn to establish sanitary landfills and waste recycling facilities for municipal waste, according to a cabinet statement. The first EGP 3.3 bn contract will create 13 new recycling and waste treatment facilities across eight governorates and increase efficiency at 5 waste treatment and recycling plants in Sharqiya, El Wadi El Gedid, Beheira and Aswan. The second EGP 938.6 mn contract will see the ministry build 9 sanitary landfills in Matrouh, Sinai, the Red Sea and Sohag.

Background: This comes as part of a wider EGP 12 bn waste management program to develop recycling facilities, close illegal garbage dumps, boost the efficiency of the waste management system, and raise awareness, the statement said.

ON THE POLICY SIDE-

Egypt will invest EGP 3 bn to plant 100 mn trees over the next seven years, according to a cabinet statement. The initiative could offset about 20% (or 61.2 mn tons) of our annual carbon emissions as well as improve air quality, the statement said, adding that some 10 mn trees will be planted by the end of FY 2022-2023.

We also launched four initiatives to help drive the development of sustainable infrastructure and transport in cities in developing countries:

• The Sustainable Cities Initiative in partnership with the World Bank aims to promote sustainable urban development projects in Egypt, according to a cabinet statement.
• The Low Carbon Transport for Urban Sustainability Initiative will support the development of clean transport systems in developing countries over the next ten months leading up to COP28. It will agree on a roadmap and pilot initiatives by next February, according to a cabinet statement.
• Friends of Greening National Investment Plans in Africa and Developing Countries Initiative aims to help developing countries increase the share of green projects in their national investment plans by at least 30% by 2030, according to a ministry statement.
• The Waste 50 by 2050 Initiative aims to raise the recycling rate of African waste to 50% by 2050 from a current 10%, according to a cabinet statement.