Published on 12/12/2023
COP is the abbreviation for the annual United Nations conference on climate change, called the “Conference of the Parties”, which has been held since 1995. The 28th edition of the conference was held in Dubai, United Arab Emirates (UAE), from 30 November to 12 December. This year, COP28 is an opportunity to take stock of the progress made, the culmination of a process called «Global Stocktaking» on the progress made by the world in the fight against the climate crisis and the scale of the need for a change of course.
The COP28 global climate summit has reached a historic deal on fossil fuels, hailed by the UN as marking “the beginning of the end for the fossil fuel era”. The Global Stocktake Agreement was concluded after 48 hours of intense negotiations between 200 countries and resulted in a consensus on a gradual “transition away” from fossil fuel. COP28 reaffirms the goal of limiting global warming below +2°C compared to pre-industrial period and commits to maintaining current efforts.
50 oil and gas companies, representing more than 40% of global oil production, joined the Oil and Gas Decarbonization Charter, committing to net zero operations by 2050, ending routine flaring by 2030, and near-zero upstream methane emissions. However, the UN Secretary-General criticized this initiative for failing to cover scope 3 emissions and capital expenditure. Only 15% of emissions from oil & gas come from the production phase (scope 1 and 2 emissions), but the majority comes from the combustion of oil & gas, which counts as scope 3 emissions for oil & gas companies.
2023 will be the warmest year ever recorded, with the global average temperature reaching 1.46°C above the 1850-1900 average - just 0.04°C below the 1.5°C limit. New science published at COP28, drawing on inputs from 200 scientists, warns that the earth is on the verge of five catastrophic climate tipping points, and that three more tipping points may be reached in the 2030s if the world hits the 1.5°C (2.7°F) threshold.
Over 123 countries have so far signed the pledge to triple renewable energy generation capacity by 2030 and to double the annual rate of energy efficiency improvements to 4% every year until 2030. Additional actions were initiated that focus on transforming energy demand, in particular for carbon and energy-intensive industries.
The Industrial Transition Accelerator (ITA) for Heavy-Emitting Industries, backed by $30 million from Bloomberg Philanthropies and the COP Presidency, was presented during the COP28 conference and will concentrate on decarbonization solutions across industry, transport and high-emitting sectors that generate a third of global emissions. The ITA will address the challenges that are holding up existing projects from reaching financial investment decisions in the next 2-3 years to ensure they can go live by 2030.
The Breakthrough Agenda, a coalition of governments representing 60% of the global GDP, launched a new wave of breakthrough partnerships between advanced and emerging economies. They are designed to scale demand for low-carbon industrial products, create standards to facilitate international trade, and turbocharge technical and financial assistance for industrial transformation in developing countries.
The Netherlands launched a coalition of 13 countries that committed to publish an inventory of their fossil fuel subsidies within one year and to create a strategy for eliminating such subsidies. The other countries are Canada, France, Spain, Ireland, Denmark, Finland, Austria, Belgium, Luxembourg, Costa Rica, Antigua, and Barbuda. Earlier this year, the International Monetary Fund (IMF) calculated that the world’s governments spent a record total of $7 trillion on fossil fuel subsidies in 2022.
COP28 spurred a set of actions by governments, businesses, and financial institutions to transform food systems and to protect and restore natural ecosystems across forests, mangroves, oceans, and coral reefs. A new agreement was presented during the COP28 conference and aims to strengthen the coordination between the climate and biodiversity COPs, through the "COP28 UAE Joint Statement on Climate, Nature and People".
134 countries have so far committed to the Declaration on Sustainable Agriculture, Resilient Food Systems and Climate Action. This means they will embed food in their NDCs and will report back on this next year, marking the first-ever declaration on food systems.
A new UAE-led $30 billion Climate Fund, launched in partnership with BlackRock, Brookfield, and TPG, was initiated during the COP28 conference and will aim to invest $250 billion by the end of the decade with a focus on less-developed economies.
A major new report sets out how to mobilize the $2.4 trillion needed by emerging and developing economies for climate solutions by 2030, was presented during the COP28 conference. This is a fourfold increase from current levels with a fifteenfold increase in private finance also required.
Over $2.6 billion has so far been mobilized to conserve vital natural sinks, fund ocean-climate solutions, and finance climate-nature projects. Moreover, 200 businesses and financial institutions took concrete action to set climate and nature targets under the Science-Based Target Network and Science-Based Target International’s Forest Land and Agriculture frameworks.
According to the GFANZ progress report, over 675 financial institutions from 50 countries are now committed to aligning their financed emissions with 1.5°C, with more than 100 financial institutions joining sector-specific alliances this year. In addition to this, about 250 financial institutions are expected to publish their transition plans in the next year.
During the COP28 conference, voluntary carbon markets received a push, with banks, regulators, and standard setters throwing their weight behind efforts to revive the global trade in carbon credits, challenged by allegations of a lack of credibility.