SHARM EL-SHEIKH, EGYPT—It’s the final day of COP27 and the hodgepodge of corporate information booths, art installations and protestors is quickly clearing out of the Sharm el-Sheikh conference centre. But leaders from the nearly 200 countries that have convened in the Red Sea resort town for the last two weeks have yet to reach a consensus on how to address climate change. 

Away from the conference centre floor, negotiations are expected to drag on through the weekend, with debate continuing on the defining issues of this UN climate conference. Those sticking points include language around phasing out fossil fuels, rules for a global carbon trading market and funding for loss and damage. 

On Thursday, Canada’s Environment Minister, Steven Guilbeault, joined Frans Timmermans, the European Commission’s vice-president, and Alok Sharma, the U.K. politician who was president of last year’s COP26 in Glasgow, to meet with COP27 president Sameh Shoukry to pressure him to amp up ambition and warn him against backsliding on existing commitments.

Though this summit was supposed to be about finally putting words into action, a draft document released Friday morning showed little progress on key issues agreed to in the pact made last year in Glasgow, and in some cases, ambition has even lessened. 

As they pack up the information booths and protest signs, here’s a look at the possible outcomes for this so-called “implementation COP.”

Phasing down ambition to curb fossil fuels: In Glasgow, world leaders agreed to phase down the use of coal and phase out “inefficient” subsidies for fossil fuels. This year, India has pushed for a commitment to phase down all fossil fuels, including oil and gas. Though the proposal received support from the European Union and the U.S., along with most island nations, it didn’t appear in the draft document published Friday morning. Instead, the document includes language that weakens last year’s commitment to limit fossil fuel subsidies and coal production, said Catherine Abreu, climate advocate and advisor with the Net-Zero Advisory Board, which counsels Canada’s environment department on its emissions goals. The draft language “suggests some countries don’t have to phase down coal if their national circumstances don’t dictate they should,” she said. “Even those baby steps [made in Glasgow] risk being watered down.”

Canada has recommended against phasing down all fossil fuels, citing the lack of federal jurisdiction over natural resources in the country. “Every single piece of regulation we put out on climate change is being challenged in court—by provinces and companies, and sometimes both,” said Guilbeault during a briefing for COP27 participants Thursday. “If we’re not careful from a constitutional point of view, then our regulations will be shut down by the courts.”

In a press conference Friday, Guilbeault sought to clarify those remarks, saying he supports a broad-based reduction of Canada’s dependence on fossil fuels while opposing prescribed oil production cuts. The federal government has floated an emissions cap on oil-sands development. 

“I was asked if Canada would curtail production,” he said. “And that’s a very different thing than saying, ‘Would you support reducing dependency on fossil fuels.’”

Abreu acknowledged that limitation, but said there’s growing precedent for the Supreme Court determining the federal government has authority over issues related to climate change, citing the national carbon pricing decision. 

Abreu said resisting language around phasing out fossil fuels will hinder the energy transition. “No one’s here pushing for the inclusion of fossil fuel phase out in the text because we think that means that all fossil fuel production ends tomorrow,” she said. “But it’s very clear that this transition has to take place, so let’s set up a process that brings us all together to talk about how it’s going to happen and make sure that happens in a just and fair way.”

1.5 C is still (barely) alive: Friday’s draft text reaffirms the need to keep global warming from exceeding 1.5 C above pre-industrial levels, and that getting there requires cutting greenhouse gas emissions by 45 per cent by 2030 and to net-zero by mid-century. The language echoes the declaration the G20 made this week and assuages fears a COP27 deal would soften that target. 

The missing loss and damage fund: Loss and damage, which would see upper middle-income countries pay emerging economies for harms they’ve suffered because of climate change, has been the defining theme of COP27 and many countries in the latter camp have said they won’t accept an outcome that doesn’t include a specific fund or financing mechanism through which money will start flowing.

As of Friday morning the draft document included only a blank placeholder where language on a loss and damage funding arrangement could be added, suggesting an agreement on the issue is far off. 

Speaking to reporters on Friday, Guilbeault said leaders agreed in principle on establishing a loss and damage fund, but said it needed to include the world’s biggest polluters in order to be effective.

“I think we’re close to that, we agree to the creation of the fund,” he said, adding that “there are some differences of views.” 

“We believe that the fund should include all large emitters, which would include a country like China, and larger emitters such as Saudi Arabia or Qatar—countries that not only are large emitters, but also have a much higher standard of living than they did when the Rio Convention was adopted in 1992.” 

The EU gave the issue a boost Friday by formally agreeing to establish a loss and damage fund. The move puts pressure on big polluters like the  U.S. and China, which have rejected the idea for a dedicated loss and damage fund. “Skillful presidency needed to ensure this doesn’t fall through the cracks,” Rachel Kyte, dean of the Fletcher School at Tufts University in Massachusetts and former World Bank Group vice president and special envoy for climate change, said in a message to The Logic. 

Kicking the can on carbon markets: The Glasgow Climate Pact made some progress on establishing global accounting rules for buying and selling carbon credits, known as Article 6. But last year’s conference punted some of the finer details to this year’s, including how and under what circumstances parties can use carbon credits to offset their emissions. However, discussions here on these details have reportedly been strained, with the draft text raising concerns that credits could be double counted, compromising the market’s credibility. 

“It is inexcusable that parties move Article 6 negotiations along at this pace,” said Kyte. She said there’s a need for “urgent action” to create an effective carbon pricing system, particularly given the interest from the private sector, from which investments for climate change solutions have been hard to wrangle. 

The implementation COP that wasn’t: It’s been repeated again and again: this summit was supposed to be the “implementation COP,” where leaders were expected to be held accountable for decades of climate commitments and the devastation that has resulted from their inaction. While the outcome of COP27 still hangs in the balance, Eddy Pérez, international climate diplomacy director at Climate Action Network Canada, said the conference so far hasn’t lived up to its branding. “There is a possibility of backsliding on critical issues,” he said. He said failing to clinch a strong agreement on issues like funding for loss and damage and the 1.5 C target could also erode credibility in the COP process.  

“People expect that this space where governments come together to deliver on climate action, actually sends a signal of hope of accountability,” he said, “and a vision that the world can come together to tackle these multiple crises.”

With files from Jesse Snyder in Calgary