COP28 begins this week. Here, we look at the issues that will dominate the conference.
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Key takeaways
COP28 starts this week and will run from 30 November to 12 December. Current geopolitical conflicts like the US-China rivalry, Russia’s Ukraine invasion and the Israel-Hamas war in Gaza all risk making agreement more difficult. However, the main fault line runs between developed (global north) and developing (global south) countries. A few issues will dominate the conference:
- The Global Stocktake (GST). This will highlight the gap between pledges and delivery, show how far behind the world is on delivering 2°C, and increase pressure for more ambitious commitments.
- The Loss and Damage Fund. COP28 is likely to adopt text based on what was agreed earlier this month, but the key questions have yet to be bottomed out in detail: who benefits, who pays, and how much. The fund is a bone of contention between global north and south. The US appears isolated, but, like the EU (which has promised a substantial contribution to the fund), it thinks wealthy emitters like Saudi Arabia and the UAE should pay into the fund.
- Climate finance. This is another subject of global north-south tension. New financing goals are needed to replace $100 billion by 2020. The figure mooted is $500 billion a year by 2025. The global south wants a high number and funding in grants or concessional finance rather than loans.
- The role of fossil fuels. Much attention will be paid to the wording of the final communiqué (“phase out” versus “phase down”) and the word “unabated”. The EU wants a phaseout of fossil fuels but is opposed by many countries who will insist on softer language.
- Key technologies. COP28 will likely endorse the target to triple renewable capacity to 11 terawatts by 2030 (which the EU has pushed for). The UAE is also pushing for the endorsement of a target to double the annual rate of energy efficiency improvement by 2030. The role of carbon capture – seen as necessary by many countries but as greenwashing by climate activists – will be debated and contested.
- Side deals. We should expect side deals from coalitions of countries and announcements on existing partnerships like the Global Methane Pledge and JETPs. The UAE will unveil further details on the Global Decarbonisation Alliance (involving oil and gas companies) as a flagship COP28 initiative.
- Carbon markets. There will be efforts to resolve outstanding differences on operationalising them and bolstering their credibility.
COP28 will be fraught. But as the Global South becomes more assertive, we should watch the backlash on net zero building in the Global North. COPs will become increasingly fraught, not less.
Context
COP28 begins this week and will run from 30 November to 12 December in Expo City in Dubai, UAE.
The Paris Agreement’s overarching goal was to limit global warming to well below 2°C above pre-industrial levels and try to limit it to 1.5°C. According to Climate Action Tracker, the world is already at about 1.1°C. The World Meteorological Organization expects 2023 to be 1.4°C above pre-industrial temperatures.
Last week’s UNEP Report suggested global warming is expected to be above 2.4 °C and could reach 2.9°C. The report said that, as of the start of 2023, there were only about 250GtCO2 – or six years of current emissions – remaining that can be emitted before the world has a 50:50 chance exceeding 1.5°C, a target that now looks unattainable without net-negative emissions through carbon dioxide removal technologies, whose availability can’t be taken for granted given the early stage and high cost of many of these technologies.
An IPCC report in 2018 suggested that a 2°C increase could dramatically increase the risk of floods, droughts, heat, food insecurity, and the deterioration of the livelihoods of millions. It also suggested a 2°C increase would result in the loss of 99% of corals, a decrease in marine fisheries by three million tonnes of stock and rising sea levels affecting 100 million more people by 2100. At 3°C, points of no return could include the runaway melting of ice sheets and drying out of the Amazon rainforest.
The choice of location and president-designate were both controversial. On the one hand, the UAE is highly vulnerable to the effects of climate change, but on the other, its emissions per capita, at over 20 metric tonnes per capita, are amongst the highest in the world. Though COP28 President-designate Sultan Ahmad Al Jaber has taken part in eleven COPs, he is CEO of the world’s seventh largest oil producer, ADNOC, which has set out a $150bn investment plan for oil and gas expansion.
Al Jaber has assembled a multinational team with well-known climate and energy experts, including a former DG of IRENA (Adnan Amin) and staff from the American foundation ClimateWorks and the French Ministry of Ecological Transition.
Key issues
The UAE has four themes for COP28: technology and innovation, inclusion, communities, and finance. The thematic days of the conference will cover twelve topics: health, finance, just transition, education, land use, agriculture and water.
A few key issues are likely to dominate COP28, including the global stocktake, reaching an agreement on the Loss and Damage Fund, agreeing on a new climate finance target, the role of fossil fuels and different technologies, side deals, and carbon markets.
Before we discuss these in turn, let’s set out the geopolitical backdrop to COP28 and major parties’ positions.
Geopolitics
Three current geopolitical conflicts could affect COP28:
First, the US and China’s rivalry and trade war. The two countries account for almost half (45%) of global emissions. China emits twice as much as the US (31% versus 14%), but its per capita emissions are about half those of the US (7.1 metric tonnes a year per capita in China versus 14.4 tonnes in the US). They disagree on coal and whether China should be seen as a developing country or an emerging member of the developed world.
But they have looked to work constructively together in recent COPs. John Kerry and Xie Zhenhua met before COP26, COP27 and again this summer, and Joe Biden and President Xie recently met in San Francisco. The two countries released a joint plan on climate change earlier this month.
Second, Russia’s invasion of Ukraine. COP29 is supposed to take place in Eastern Europe, but Russia is preventing any EU country from hosting.
Third, the Israel-Hamas war in Gaza. Its escalation could make it harder for countries to pay for the transition and increase calls to slow it down.
The main geopolitical fault line, however, runs from the Global North to the Global South. The former are responsible for most historical emissions (G7 countries accounted for 44% of global emissions in 2021) but are reducing emissions fast. They are focused on climate mitigation. Though wealthier than the Global South, they are generally growing more slowly and are expected to continue doing so.
Global South countries, however, account for fewer historical emissions despite constituting most of the world’s population, but many already feel significant impacts from climate change. However, their emissions are rising. Global South countries want funding from the Global North to compensate for climate impacts and emissions cuts. The two are at loggerheads on emission cuts and money.
Positions of the main players
The EU’s priorities for COP28 are scaling up renewables and phasing out fossil fuels. First, it hopes COP28 will sign up to tripling global renewable capacity and doubling the annual average global rate of energy efficiency improvements between now and 2030 (reaching 4% by 2030). On the second, it is pushing for COP28 to agree to phase out ‘unabated’ fossil fuels. It has also pledged a substantial contribution to the Loss and Damages Fund.
However, the EU is less influential than it was before, and it is also more isolated. Its increase in coal consumption and hunt for gas supplies after Russia’s invasion of Ukraine damaged its credibility. Many countries are unhappy with its Carbon Border Adjustment Mechanism (CBAM). It is also affected by the departure of the experienced Frans Timmermans. While the EU has a good chance of seeing agreement on its renewable targets (supported by the US, China, and the UAE), many countries, including China, oppose its position on fossil fuels and will insist the language in the communiqué is watered down.
The UK will have a low profile at COP28. Charles III will deliver an opening address. However, the UK Government has adjusted its climate-issue position since COP26.
The US agrees with the EU on tripling renewable energy and doubling energy efficiency. Still, it isn’t aligned with its position on fossil fuels and is unhappy with the current state of loss and damage fund discussions, where it risks being isolated. The US will push for an end to new permitting of coal-fired power. China will oppose this, but the US and China will host a methane and non-CO2 summit alongside the UAE at COP28.
China is unlikely to shift its position on fossil fuels. Slowing growth and power outages mean it is still keen on new coal plants. It sees the US Inflation Reduction Act and the EU’s Net Zero Industry Act as threats to its interests. It also wants countries like the US to contribute more for developing countries. China insists it should be seen as a developing economy, clashing with the US, which says China should contribute to climate finance and cut its emissions more quickly.
India (which has very low per capita emissions at barely 1.7 tonnes per person per year, about a tenth of US levels and a third of Western European countries like the UK or France) is said to be asking developed countries to become carbon-negative to allow emerging economies to pursue their economic development. India is focused on developed economies’ historical responsibility as the largest emitters and aims only for climate neutrality by 2070.
Russia accounts for just under 5% of global emissions and will oppose any plans to phase out fossil fuels. It’s a significant oil and gas producer. Its stance is supported by several African countries that want to develop their fossil fuel resources and are not as opposed to Russia’s invasion of Ukraine as Global North countries are.
Saudi Arabia is pushing for the rapid expansion of carbon markets and is discussing buying carbon credits from Kenya. It wants to focus on greenhouse gases, not just fossil fuels. It intends to continue with the production and use of fossil fuels but emphasises the potential role of carbon capture technology. It is also at odds with the EU and US, who want wealthy fossil fuel producers like Saudi Arabia and the UAE to contribute towards the Loss and Damages Fund.
The like-minded developing countries (LMDC) group, of which China and Saudi Arabia are members, often works as a block in international forums and accounts for over half the world’s population. It typically opposes the EU on issues like the phaseout of fossil fuels, in asking for more financial contributions from developed economies and avoiding binding emissions measures. It emphasises carbon capture and storage more and wants to prevent short-term constraints on fossil fuels, which it sees as necessary for economic and social growth.
The Global Stocktake (GST)
COP28 will be the first global stocktake, where countries will evaluate progress towards the 2015 Paris Agreement and consider the next steps. COP28 is supposed to set the foundation for work on countries’ new nationally determined contributions (NDCs), which must be prepared in two years for COP30.
Work on this first GST began formally in 2021. Data gathering took place in 2022. A synthesis report was published in September. It said that under current policies, global temperatures will rise by 2.4°C to 2.6°C. That is well below the 3.7°C to 4.8°C expected in 2010, but it’s far short of the targets set in Paris.A big part of COP28 will be a discussion of progress to date and how it falls short of what’s needed, alongside a discussion of potential solutions, like phasing out unabated fossil fuels, scaling up renewables, phasing out high-impact greenhouse gases, and addressing hard-to-abate emissions. We can expect a lot of discussion about the gap between pledges and implementation so far.
The loss and damage fund
COP28 will aim to agree on the loss and damage fund. The agreement to set up such a fund to help compensate developing countries for the impacts of climate change they had suffered was one of the few positives from COP27 in Sharm El-Sheikh. However, the key details of the fund (including who benefits, who pays and how much) have yet to be agreed upon in detail. It is a significant bone of contention between the Global North and South.
Earlier this month, it was agreed that the fund would be administered at first by the World Bank and would provide financing in the form of grants and highly concessionary lending. A text was agreed upon, and we would expect COP28 to adopt this text or a text close to it.
However, there is still a debate about who should qualify as eligible beneficiaries. Some developing countries say all developing countries should be able to access the fund. Still, the UN’s definition of developing countries dates to 1992 and includes Singapore, which has a higher GDP per capita than many countries in Europe and China. Developed countries want access to the fund to be limited to particularly vulnerable countries.
As to who should pay into the fund, the agreement earlier this month left out Saudi Arabia, the UAE and China, but this is an area of significant disagreement with Global North countries (though the UAE is considering contributing to the fund). There needs to be an agreement on how much should be paid into the fund (though $100 billion a year by 2030 has been suggested) or how this should be divided among those paying into the fund.
COP28 is likely to see agreement on some of the features of the deal agreed earlier this month (like the initial location of the fund inside the World Bank), but the Fund will likely be a significant source of tensions at COP28.
Climate Finance
So far, the focus has been on the failure of developed countries to meet their 2009 pledge to provide and mobilise $100 billion a year of funding for developing countries by 2020. This had not been achieved by COP27.
But the main issue for COP28 will be what new goal should supersede this for 2025 onwards. Several bodies have suggested that the developing world will need as much as $1 trillion annually in mitigation funding by 2030. A contribution of about $500 billion a year by 2025 has been mooted. The Global South wants a high number and funding in grants or concessional finance rather than loans.
There will likely be calls for reforming Multilateral Development Banks (MDBs), discussions about recapitalising MDBs so they can provide much more funding to Global South countries, and discussions on risk-sharing and mobilising more private finance. Debt-for-climate swaps will also be discussed. These would see Global South countries get favourable conditions on financing for specific climate-related projects.
The role of fossil fuels
Countries will try to reach an agreement to “phase out” or “phase down” fossil fuels and on the language surrounding this (including the role given to carbon capture and storage technologies).
There will be a lot of attention on the precise form of words adopted, but there are radically different perspectives. The EU wants the complete phaseout of unabated fossil fuels as quickly as possible, but the UAE, China, India and Saudi Arabia are calling for a “phase down”.
Different outcomes are possible, ranging from a focus on all hydrocarbons to a focus on coal. Beyond the distinction between “phase-down” and “phase-out”, the most sensitive topic is probably the word “unabated”, the meaning of which is contested and leaves open the use of carbon capture.
The role of different technologies
COP28 will debate different technologies’ role in cutting emissions. This includes the role given carbon capture. Many countries and international organisations say carbon capture is essential to cut emissions in hard-to-decarbonise sectors. But activists see it as greenwashing and part of the fossil fuel industry’s strategy to prolong gas and oil extraction. COP28 will also see debates around hydrogen and whether it is generated through electrolysis (green) or reforming methane (blue).
COP28 is likely to see much discussion around specific targets on renewable power. At the Pre-COP meeting in October, the COP28 Presidency, IRENA and the Global Renewables Alliance launched a report calling for a tripling of global renewable power capacity to 11 terawatts (TW) by 2030, a doubling of annual energy efficiency improvements by then and a doubling of hydrogen production to 180 million tonnes a year. The UAE, EU, US, G7, G20 and sixty countries in a “high ambition coalition” all support the renewables target. Its chances of adoption are good.
Side deals
Unanimity is needed for the signing of the final communiqué. With 197 participants, that isn’t easy. Some of the biggest successes of COP26 in Glasgow were side deals announced by coalitions of different countries, like Just Energy Transition Partnerships (JETPs), the Global Methane Pledge, the Net Zero Emissions Vehicle Pledge, and the Deforestation Pledge. New side deals and the evaluation and development of side deals will be a big part of COP28.
Al Jaber has made methane emissions via losses, leaks and flaring in the oil and gas industry a focus of his call to action for the industry. Over 150 countries have signed up to the Methane Pledge, which aims to cut global methane emissions by 30% by 2030, and discussion on its implementation will take place at COP.
The UAE is also likely to unveil further details on the Global Decarbonisation Initiative, a coalition of oil and gas companies the UAE is building for COP28. Al Jaber has asked companies to join the alliance, which will focus on Scope 1 and 2 emissions from operations.
As to JETPs, it’s possible that new deals could be announced. However, this initiative has not been without difficulties, and implementation has been slow.
Carbon markets
COP26 brought agreement on the rulebook on Article 6 of the Paris Agreement, which sets out the parameters for carbon markets. However, many key technical questions still need to be addressed in detail, such as the definition of carbon removal, its metrics, and roles. One task for COP28 will be to reach an agreement on the details of carbon markets.
The credibility of carbon offsets in the unregulated Voluntary Carbon Market (VCM) has also been questioned, contributing to the low carbon price as major players have withdrawn from the market. There have been some initiatives to address this, like the Core Carbon Principles (CCP) published by the Integrity Council for Voluntary Carbon Markets.
But a host of contentious issues still need to be resolved, like whether countries can retain the right to revoke the authorisation of credits issued, the confidentiality of reporting, the levels of transparency in the market, and how to avoid double-counting credits.
We should expect COP28 to feature a detailed discussion on operationalising Article 6 of the Paris Agreement. There will also be a discussion on bolstering the credibility of carbon markets. We will also likely hear proposals for alternative ways to tax carbon emissions.
Conclusion
The world is far behind in delivering 2°C. While progress on issues like increasing renewable capacity and operationalising carbon markets is likely, debates like the loss and damage fund, climate finance, and hydrocarbons’ role are much more fraught.
But as Global North countries find it increasingly difficult to resist pressure from the Global South to provide funding to repair the damage already caused by climate change and reduce emissions, we should keep sight of the building backlash on net zero in the Global North. As fraught as COP28 will be, future conferences are likely to be more fraught, not less.
