Key progress in volatile year for energy transition raises implications for path to COP28

December 2, 2022
Charles River Associates offshore wind farm sunset

Building on the COP26 summit in Glasgow last year, this year’s UN summit on climate change in Sharm el-Sheikh, Egypt brought together more than 45,000 participants. Highlights of the summit included new promises by Brazil and the creation of a ‘loss and damage’ fund.

In this infographic, we outline key trends as context for this year’s conference and highlight selected announcements with potential implications.

Context: Year from COP26 to COP27 brought extreme climate events, news findings impacting the outlook

  • 2022 saw floods in Pakistan; heatwaves in Europe, China, and other countries; droughts in North America – showcasing the urgency of any climate change action.
  • Shortly before the meeting, a new report by the UN Environment Program estimated that current pledges would result in a global heating of 2.4-2.6C by the end of the century if implemented fully.1

Price increases and volatility put focus on clean energy transition while maintaining security of supply

Since COP26, price increases and volatility on gas markets, in part driven by Russia’s invasion of Ukraine, have also led to significant price increases in electricity wholesale markets. This has resulted in a challenge for industry and political leaders as well as regulators to dampen the impacts of these price movements and ensure sufficient security of energy supply despite ongoing limitations of established gas supply channels.

Despite this increased focus on supply security, most governments are continuing or even accelerating their transition to renewable energy sources to generate electricity. However, there continues to be a funding gap for clean energy investment in emerging and developing economies. Amounts invested have remained flat since the 2016 Paris Agreement according to the IEA.2