Cop 27 warning for LatAm oil producers

Cop 27's closing words sent out a strong message on decarbonisation to the region's oil industry, writes Jacqueline Echevarria

Latin America and the Caribbean kept a relatively low profile at the Cop 27 UN climate summit, but the debates that took place around the talks' final text should serve as a warning for the region's oil and gas producers.

During Cop 27's closing negotiations, Colombia and Chile were among more than 80 countries, including the US and the EU, supporting the goal of phasing out fossil fuels — a proposal ultimately watered down by several countries including Saudi Arabia and other Arab League oil producers.

The energy and mitigation section of the agreement was instead unchanged from last year's Glasgow Climate Pact, speaking only of striving for a "phase-down" of unabated coal power and a "phase-out" of inefficient fossil fuel subsidies as part of efforts to rapidly reduce greenhouse gas emissions.

The fact that a significant number of countries were prepared to back this proposal is of "extreme importance for Latin America's oil producers because it is telegraphing what is in store in future Cops", and there is the "urgent need to decarbonise and fully mitigate emissions", argues Luisa Palacios, senior research scholar at Columbia University's Centre on Global Energy Policy. "Cop 27 might have failed to include a phase-down of all unabated fossil fuels in its final wording, but this is not the last we have heard of this phrase," says Palacios, who was chair of the board of directors at Venezuela's US refining affiliate Citgo.

Some view Cop 27's final agreement as a message to the region's oil industry, but others see a lack of movement on fossil fuels as encouragement for oil and gas investment. "The scale of influence of the fossil fuel industry and state supporters was on full display," Brazilian non-profit group ClimaInfo notes. "The new language, including ‘low-emission' energy, is a significant shortcoming, as the undefined term could be used to justify development of new fossil fuels against the clear guidance of the Intergovernmental Panel on Climate Change and the IEA."

Unity, always unity

Latin American and Caribbean governments showed unity elsewhere at Cop 27 in highlighting the urgent need to mobilise climate finance for developing economies and to increase protection of the Amazon.

Mexico announced a more ambitious nationally determined contribution (NDC), including uniting with Washington on methane emissions cuts, while Chile announced more ambitious methane emissions reduction goals in its updated NDC.

On forestry, Colombian president Gustavo Petro and Venezuelan counterpart Nicolas Maduro committed to creating a regional alliance that draws the necessary guidelines and public and private funding to save the Amazon. At the same time, Colombia, Ecuador, Costa Rica and 23 other countries joined forces with the EU to launch a partnership committed to accelerating momentum to halt and reverse forestry loss and land degradation by 2030.

On the critical issue of finance, the agreement reached on establishing a loss and damage fund would be of particular importance to Latin America, Palacios says, as would the call on shareholders of multilateral development banks and international financial institutions to introduce reforms to meet the financing challenge presented by the climate crisis.