The 28th Conference of Parties (COP28), held in Dubai, UAE, from November 30, 2023 to December 12, 2023, had a couple of firsts to its credit. The first-ever Global Stocktake (GST), which was conducted at the summit, is a key component of the UAE Consensus. The summit also saw the maiden commitment towards transitioning away from fossil fuels. Notably, the first day of COP28 started with a facilitating agreement to operationalise a loss and damage fund (LDF), which had first been tabled in the previous edition of the summit. By the close of the summit, around $792 million had been pledged by several countries towards the fund. In total, COP28 mobilised over $85 billion in funding, including commitments towards the various funds.
Global Stocktake
The GST maps the progress (or lack thereof) made since the Paris Agreement, and outlines strategies to close implementation gaps by 2030. GST 2023 underscores the need for deep, rapid and sustained reductions in greenhouse gases (GHGs) in line with 1.5 °Celsius pathways, and outlines strategies for achieving the target. Following debates on building a consensus on the “phasing out” or “phasing down” of coal, the fifth and final iteration of the GST zeroed in on accelerating efforts towards phasing down unabated coal power and transitioning away from fossil fuels in energy systems in a just, orderly and equitable manner in this critical decade, to enable the world to reach net zero emissions by 2050. The other key targets adopted for achieving 1.5 °Celsius pathways include global tripling of renewable capacity and doubling of energy efficiency by 2030; accelerating efforts towards net zero emission; and accelerating zero- and low-emission technologies including, inter alia, renewables, nuclear power, abatement and removal technologies such as carbon capture, utilisation and storage (particularly in hard-to-abate sectors), and low-carbon hydrogen production.
A new mention in the GST is the timeline for the peaking of GHGs across nations. It notes that the peaking of GHG emissions by 2020-25 has not been implied for all countries in the modelled pathway that aims to limit warming to 2 °Celsius and assumes immediate action. It also states that the “time frames for peaking may be shaped by sustainable development, poverty eradication needs and equity considerations, and be in line with different national circumstances”.
The finance section of the “means of implementation and support” in the GST recognises the needs of developed nations in leading climate finance, and highlights the need for “a progression beyond previous effort”. It recognises that developing countries will need $5.8 trillion-$5.9 trillion in the pre-2030 period, particularly to implement their Nationally Determined Contributions, and highlights that they require adaptation financing of $215 billion-$387 billion annually up until 2030, among other things. It calls for the scaling up of new and additional grant-based, highly concessional and non-debt finance instruments to support developing countries. It also recognises the role of the private sector and highlights the need to strengthen policy guidance, incentives, regulations and enabling conditions to reach the required scale of investments.
Key pledges and commitments
COP28 saw the launch of several voluntary actions across the four key pillars set out by the presidency: fast-tracking a just, orderly and equitable energy transition; fixing climate finance; focusing on people, lives and livelihoods; and underpinning everything with full inclusivity.
Fast-tracking an equitable energy transition: To increase the pace and scale of deployment of renewable energy, and energy efficiency, the Global Renewables and Energy Efficiency Pledge, launched at the summit, was endorsed by 132 countries. These countries have collectively committed to tripling the world’s installed renewable energy generation capacity to at least 11,000 GW by 2030. The countries have also committed to doubling the global average annual rate of energy efficiency improvements from around 2 per cent to over 4 per cent every year until 2030, as well as to putting the principle of energy efficiency as the “first fuel” at the core of policymaking, planning and major investment decisions. Funds aggregating $5 billion have been mobilised to operationalise the pledge globally, including to support the deployment of renewables in the Global South.
On the energy transition front, at least 10 new members (including the US) joined the Powering Past Coal Alliance (PPCA), which works on transitioning from unabated coal power generation to clean energy. Notably, France, together with other countries and several organisations including the PPCA, has launched the Coal Transition Accelerator, which aims to share expertise and design new policies to facilitate just transitions from coal to clean energy. A significant development in the nuclear energy space was the newly launched Declaration to Triple Nuclear Energy, which aims to triple nuclear energy capacity globally by 2050. To promote electrification, renewable-ready grids and clean energy deployment in line with the goals of the 2030 Breakthroughs, the Utilities for Net-Zero Alliance was launched, comprising 31 partners, including 25 global utilities and power companies. In addition, new 2030 Breakthroughs on methane reduction in the oil and gas sector and electrification were launched.
In order to combat emissions across sectors, the Global Cooling Pledge, launched under this pillar, aims to reduce cooling-related emissions across all sectors by at least 68 per cent by 2050; this is relative to the 2022 levels. Another key launch was the Mutual Recognition of Certification Schemes for Renewable and Low-Carbon Hydrogen and Hydrogen Derivatives, which aims to foster mutual recognition of respective certification schemes on low-carbon hydrogen and hydrogen derivatives. It is significant that at a summit organised by one of the largest producers of crude oil, 52 signatories (representing 40 per cent of global oil and gas production) committed to the Oil and Gas Decarbonisation Charter, aiming to achieve net zero operations by 2050 at the latest, end routine flaring by 2030 and achieve near-zero upstream methane emissions. Meanwhile, endorsed by 35 companies, the Industrial Transition Accelerator aims to catalyse decarbonisation across heavy-emitting sectors, including energy, industry and transportation.
Apart from this, to decarbonise hard-to-abate sectors, the Cement and Concrete Breakthrough was launched by Canada and the UAE. It aims to accelerate industry decarbonisation by enabling the sharing of best practices, working on policy and standards and fostering innovation in emerging areas such as carbon capture, storage/utilisation and circular economy. In the shipping industry, several companies have joined Cargo Owners for Zero Emission Vessels, a collaborative platform to drive ambition and action toward zero-emission ocean transport. Moreover, the Green Maritime Africa Coalition promotes the supply and use of zero-emission fuels in Africa’s maritime sector, in line with the International Maritime Organization’s 2050 decarbonisation plan. In addition, 30 stakeholders in the shipping sector signed a joint commitment at COP28 to facilitate the use of renewable hydrogen-derived shipping fuel within this decade, to meet maritime industry decarbonisation targets.
Fixing climate finance: The key highlight on the climate finance front was the agreement to operationalise the LDF. The fund, meant to support vulnerable communities and developing countries, will be hosted by the World Bank for an initial period of four years and will allocate resources based on the available evidence and with a minimum percentage allocated to the least developed countries and small islands. By the close of the summit, around $792 million had been pledged by several countries. The UAE announced its commitment of $100 million, the UK committed GBP 40 million, Japan committed $10 million, the US committed $17.5 million and the European Union (including Germany) committed Euro 225 million.
In total, COP28 mobilised over $85 billion in funding, including commitments towards the various funds. The pledges to the Green Climate Fund took this year’s replenishment total to a historic $12.8 billion, with cumulative contributions of $317 million for the Adaptation Fund and the Least Developed Countries Fund.
COP28 saw the launch of a new vision for climate finance – the COP28 UAE Declaration of Leaders on a Global Climate Finance Framework, endorsed by 13 leading countries. It summarises the need for collective action, opportunities for all and delivering at scale, while recognising the need for investing $5 trillion-$7 trillion annually in greening the global economy by 2030. The UAE also announced a finance forum, to be held in 2024, to track progress against commitments made at COP28.
On the international financing front, innovative financing mechanisms were announced to support impacted countries with high debt burdens, particularly through pledges to the IMF Resilience and Sustainability Trust, commitments for Special Drawing Rights to the African Development Bank, and wide adoption of climate-resilient debt clauses to pause a country’s debt when it is hit by a natural disaster. Overall, the Multilateral Development Banks announced over $180 billion in additional climate finance commitments. The ADB launched the Nature Solutions Hub for Asia and the Pacific, aiming to attract at least $2 billion to investment programmes incorporating nature-based solutions, with a focus on capital markets. African leaders launched the Africa Green Industrialization Initiative, with more than $4 billion worth of projects announced to harness the continent’s vast, high quality resources, and expand clean energy access and economic growth.
On the private funding front, the UAE launched the $30 billion catalytic climate fund ALTÉRRA, equipped with a special $5 billion risk mitigation facility dedicated to incentivising investments in developing countries. It aims to mobilise $250 billion from 2030 towards climate transition by private and institutional investors.
Conclusion
While COP28 ended with a slew of pledges for mitigating climate change and combating greenhouse emissions, on-the-ground progress under these commitments and providing for the climate finance requirement to deliver these are crucial. The maiden commitment from nations to transition away from fossil fuels is a milestone, and future summits are expected to build on this further. The commitment to tripling renewable energy capacity and doubling energy efficiency are other welcome moves.
That said, the biggest gaps continue to be the lack of climate finance and the paucity of adequate commitments from developed nations. The financial commitment of $792 million towards the LDF falls significantly short of the actual climate finance needs of developing nations. There are various estimates for the climate funds required globally, with the number usually being over $500 billion – well above the pledges made at COP28. The pledged amount is even lower than the $100 billion per year that the developing world had long been waiting for.
In addition, there are concerns about the real impact of some of the COP28 pledges. A case in point is the Oil and Gas Decarbonisation Charter, whereby companies (representing 40 per cent of global oil and gas production) pledged to become carbon-free only in their direct operations, rather than addressing the carbon footprint associated with the use of their products by consumers. Moreover, experts opine that a number of propositions, including the adoption of carbon capture technologies, could be gateways to greenwashing.
While nations will endeavour to deliver on their commitments at COP28, for COP29, which will be hosted in Azerbaijan in 2024, the key tasks at hand will remain the same as this year – to deliver a strong commitment towards transitioning away from fossil fuels and mobilising the required climate financing.
Priyanka Kwatra
