The Bonn Debrief: On the way to COP27.

Before COP27 comes the 2022 Bonn Conference, a big step in shaping the climate change agenda. Here’s what to expect when the conversation continues. 

by Rahul Ramesh

You may have heard of the upcoming United Nations Conference of the Parties 27 (or COP27 for short), but have you heard of its less glamorous sibling summit? It happens in Bonn, Germany and works behind the scenes, shaping the world’s climate change agenda. In June 2022, delegates representing the nations and territories (aka Parties) that signed on to the United Nations Framework Convention on Climate Change (UNFCCC) met for the 2022 Bonn Climate Change Conference.  

Their discussions give a clear indication of what you can expect at COP27 in Egypt (November 2022). Read on for my takeaways from the event – and how the next steps might affect your business. 

First Bonn before moving on: How does it relate to COP27?

At the end of every year, the UN hosts the COPs. They are 2-week climate summits where the 197 Parties of the UNFCCC come together to set a global response to limit and respond to climate change and its impacts.  

Here, the focus is on the larger big-ticket negotiation items. For example, it was at COP3, in Kyoto (Japan), where the Kyoto Protocol was formulated and COP21, in Paris (France), where the Paris Agreement was born. It’s within these treaties that a Party’s obligation to reduce greenhouse gas (GHG) emissions stems. 

As the COPs involve discussions and negotiations on a range of complex issues, the UN convenes another annual 2-week conference in Bonn before the COPs, where the 197 Parties of the UNFCCC meet to prepare for them. More specifically, these Bonn Climate Change Conferences serve as a meeting of the 2 permanent subsidiary bodies established by the UNFCCC – the Subsidiary Body for Scientific and Technological Advice (SBSTA) and the Subsidiary Body for Implementation (SBI).  

As their names suggest, these subsidiary bodies use the Bonn Conference to discuss scientific and technological matters relating to the 3 treaties – the UNFCCC, Paris Agreement and Kyoto Protocol – alongside assessing and reviewing their effective implementation.  

Hot topics and takeaways from the 2022 Bonn Conference

So, what happened this year? The 2022 Bonn Conference was the first climate summit after COP26 in Glasgow, where the Parties committed to revisiting their 2030 GHG emissions reduction targets, formally referred to as Nationally Determined Contributions (NDCs) within UN processes. This commitment is enshrined in a document called the Glasgow Climate Pact.  

COP26 also saw the “Paris Rulebook” finalized, a detailed set of operational rules and procedures to implement the Paris Agreement. It comes as no surprise then that implementation was a major theme at the conference to prepare for COP27, where “together for implementation” is the official tag line. Here’s a glance at what was covered at Bonn: 

Topic: IPCC Sixth Assessment Report (AR6) 

As the closest thing to scientific consensus on climate change, the Intergovernmental Panel on Climate Change (IPCC) reports form the scientific bedrock for climate policies and targets. During the 2022 Bonn Conference, Party delegates and non-Party observers interacted with the scientists responsible for drafting the IPCC’s latest set of reports: the Sixth Assessment Report trilogy.  

Specifically, they discussed the findings of Working Group II (WG II – Climate Change 2022: Impacts, Adaptation and Vulnerability) and Working Group III (WG III – Climate Change 2022: Mitigation of Climate Change). It’s WG III’s contributions that propelled discussion on the hot topics around assessing methods for reducing GHG emissions and removing GHG from the atmosphere – including the following insights based on their modelling: 

  • Global implementation of pre-COP26 NDCs will likely result in warming exceeding 1.5°C 
  • Global GHG emissions continue to rise but must peak before 2025 to avoid overshooting the 1.5°C target and potentially crossing irreversible tipping points 
  • Global net zero CO2 emissions are reached in the early 2050s to avoid overshooting the 1.5°C target 

Takeaway: Deep cuts will keep coming 

These interactions, particularly with Party delegates, are critical to shaping the negotiation and policy agenda going into COP27. They also help inform Parties as they revisit their emissions reductions target this year, as mandated by the Glasgow Climate Pact.  

The findings in the most recent IPCC Assessment Report support a key conclusion: we require deep and rapid emissions cuts across all systems, sectors and industries to stay within the 1.5°C limit. 

Topic: The Global Stocktake (GST) 

The Global Stocktake (GST) – the process of assessing the world’s progress towards the Paris Agreement’s goals – is critical to the Conference of the Parties discussions, especially COP27. The GST has 3 phases: information collection and preparation, technical assessment, and consideration of outputs. At the 2022 Bonn Conference, the technical assessment phase began – rolling out in several discussions, both formal and informal.  

Using the IPPC as a foundation for their discussion, many Parties relied on their Report to state that more needs to be done, and urgently.  

Takeaway: A successful start to the conversation 

While the formal discussions were largely a Party-driven process (facilitated by experts where there was limited capacity for non-Party observers to contribute), the informal discussions saw contributions from a greater range of stakeholders in a more interactive process.  

This technical assessment phase will continue across multiple climate conferences. But it’s safe to say that input at the 2022 Bonn Conference has prepared the way for more progress in future discussions. The key findings will be presented at COP28 in 2023 as part of the final phase of the GST. 

Topic: Loss and damage due to climate change 

Within the context of UN climate change negotiations, loss and damage broadly refers to negative climate change impacts. Impacts to business operations, agricultural production, infrastructure, and human health caused by, for example, severe weather events and sea level rise, are all included within the loss and damage umbrella. Broadly speaking, the topic captures economic losses to income and physical assets, in addition to non-economic losses to individuals and society.  

The discussion on loss and damage at the 2022 Bonn Conference was the beginning of the Glasgow Dialogue – first established at COP26. The Dialogue is a commitment from all Parties to discuss the establishment for the funding of activities to avert, minimize and address climate-related loss and damage. 

Takeaway: There’s still more talking to do, and time to do it 

There were no concrete developments to report on from the loss and damage financing discussions at the 2022 Bonn Conference, largely due to disagreements between developed countries and developing countries. However, the Glasgow Dialogue is scheduled to conclude during the 2024 Bonn Conference. As such, there is still ample opportunity for Parties to come together and agree on a financing mechanism. 

While no specific decisions were made at the 2022 Bonn Conference that will directly impact businesses right now, companies will need to keep watch. The Conference’s dialogues and workshops will, however, directly influence and shape the conversation at the next Conference of the Parties – and climate policy in the future. If a loss and damage financing mechanism is established in the future, Parties may require companies to pay additional taxes or fees in order to fund it. 

Steps your business can take ahead of COP27

Although the 2022 Bonn Conference didn’t generate any concrete measures responding to climate change itself, it served its purpose in laying the groundwork for COP27, where such measures are expected. More ambitious climate targets and policies must be rolled out across the world in the near future given the IPCC’s conclusion that emissions must peak at the latest in 2025 to remain within the 1.5°C limit. This could happen as soon as COP27. 

Therefore, I suggest that your company anticipates this and takes pre-emptive action, to ensure you’re a leader in this space, – instead of being left behind or caught unaware when these policy changes are eventually implemented. Doing so includes:  

Making emission reduction plans: This includes long-term strategies, such as setting a net-zero goal and planning steps towards reaching this goal to ensure that your company is prepared for the changes to come. 

Investing in greener assets: Investment by companies in carbon-intensive assets (e.g., industrial machinery) may lead to stranded assets, as regulations may prohibit or impact their use. This can result in financial losses and significant extra costs. 

Opting for a greener supply chain: Your company may have sustainable low-carbon practices that will not be impacted by the anticipated regulatory changes. But, your suppliers, transporters, distributors and other partners may have failed to adjust. Seek to engage the services of like-minded companies that have concrete emission reduction plans and are moving towards a greener business. Importantly, this works both ways – if your company is moving in a greener direction, you will attract the attention of other companies who are doing the same – as they too want to ensure their supply chains are low-emission.) 

In short: Move quickly, but smartly. Companies that restructure their business to operate more sustainably before regulatory changes will be climate leaders and reap the financial benefits of moving early, all while helping carve the green path that we must move towards. However, as doing so involves significant investments and contacts that will lock them in for the long-term, companies must not move rashly and ensure their decisions are considered and informed.  

Bonn, the COP27, and your business in between

As we wait for COP27, it’s of course tempting to adopt a wait-and-see attitude. Especially now when there are still so many unfilled gaps at the policy level around regulating climate change. However, the 2022 Bonn Conference showed us that everyone worldwide has their eyes on climate change.  

With the world increasingly experiencing the growing and grave consequences of climate change, COP27 might just get down to business and accelerate the process of reducing emissions. Companies that do what they can now to align their processes and procedures in anticipation of what is to come, well, they’ll come out ahead. 

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