The COP28 Report Card
COP28, the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), concluded on December l2, 2023, leaving a mixed legacy. Below are some of the key highlights from the 13-day long COP28.
• The loss and damage fund, announced last year at COP27 in Sharm El-Sheikh, to support climate-vulnerable developing countries was operationalized on the first day of COP28. Countries have pledged hundreds of millions of dollars so far for the fund.
• At COP28, the overall funding reached USD 85 billion, including innovative private finance.
•. Commitments totaling USD 3.5 billion to replenish the resources of the Green Climate Fund;
• New announcements worth over USD 160 million for the Least Developed Countries Fund (LDCF) and Special Climate Change Fund (SCCF);
• Additional USD 9 billion annually for the next two years by the World Bank to finance climate-related projects;
• At least 143 countries signed the ‘COP28 UAE Climate and Health Declaration’ to promote actions for protecting people’s health from growing climate impacts;
• At least 159 countries backed the ‘COP28 UAE Declaration on Agriculture, Food, and Climate’ to support food security while combatting climate change;and
• Global Cooling Pledge has been endorsed by 66 countries to reduce cooling related emissions by 68 percent starting now.
COP28 represented a crucial step forward in the global fight against climate change. However, the conference also highlighted the complexity of the issue and the remaining challenges left to tackle. To truly succeed, future COPs must build on the progress made at COP28 and address the shortcomings effectively. This requires more decisive leadership, increased financial commitments, and a more resolute stance on phasing out fossil fuels. However, it was a victory, nonetheless, raising awareness on the slight progress that has been made and the opportunity for much more to be accomplished.
Highlights and Key Lookout Topics of COP28
Highlights
- Historic agreement on a loss and damage fund
- Record number of countries pledged to triple renewable energy
- Significant financial commitments
- Focus on frontline communities and youth
- Nature-positive commitments
Key Lookout Topics
- COP28 Gender Equality Day
- Agreement Implementation
- Fossil Fuel Phase down
- Past commitments are falling short
Climate Negotiations and Key Announcements
COP28 Presidency earmarked four cross-cutting themes for the Summit, which underpinned effective, interconnected delivery and aided Parties during negotiations. The key announcements across all these pillars, namely, technology and innovation, inclusion, frontline communities, and finance are:
Technology and Innovation
• Global Renewables and Energy Efficiency Pledge: was endorsed by 130 national governments and will bring together signatories to triple the world’s installed renewable generation capacity to at least 11,000 GW by 2030. The Pledge also includes doubling the global average annual rate of energy efficiency improvements from two to four percent per annum by 2030.
• Oil and Gas Decarbonization Charter: launched by the COP28 Presidency and The Kingdom of Saudi Arabia (KSA), its 52 corporate fossil fuel signatories commit to net-zero operations by 2050 at the latest, ending routine flaring by 2030, and near-zero upstream methane emissions. Thirty-five companies backed the Industrial Transition Accelerator, which will catalyze decarbonization across heavy-emitting sectors, including energy, manufacturing, and transportation. The signatories include: NOCs (National Oil Companies) such as ADNOC, ONGC, and Saudi Aramco; and IOCs (International Oil Companies)such as BP, Exxonmobil, and TotalEnergies
Inclusion
• Most inclusive COP ever: The COP28 Presidency and UNFCCC jointly worked to ensure that COP28 was the most inclusive UN Climate Change Conference to date.
• Youth Climate Champion: building on the foundations of the COP27 Youth Envoy, the Presidency crafted this role early on.
• COP28 Gender-Responsive Just Transitions and Climate Action Partnership: backed by 78 national governments committed to collaboration for supporting just and inclusive transitions that advance gender equality and the goals of the enhanced Lima Work Program on Gender and its Gender Action Plan. These members aim to reconvene for dialogue at COP32 to stocktake on the implementation of the goals of the Partnership.
Frontline Communities
• First Implementation Report on the Sharm El-Sheikh Adaptation Agenda: was released at COP28 and highlights the progress attained as well as outlines challenges in closing adaptation gaps and building resilience between now and 2030.
• COP28 UAE Declaration on Climate, Relief, Recovery, and Peace: signed by 82 national governments (including the EU) and 43 organizations, committed to enhance financial support for climate adaptation and resilience, and strengthen coordination, collaboration, and partnerships. The responsible Parties will reconvene at COP29 to review progress and decide on further course of action.
Finance
• COP28 has seen notable financial milestones, with over USD 85 billion being mobilized during the first few days itself. New pledges will boost the GreenClimate Fund’s replenishment to USD 12.8 billion and swiftly capitalize a UN climate fund for loss and damages reaching USD 792 million.
• UAE Leaders’ Declaration on a Global Climate Finance Framework: led by the COP28 Presidency and endorsed by 13 national governments, this Framework will aim to unlock the investment opportunity of climate finance through collective action, opportunity for all, and delivering at scale.
Implications for Governments and Businesses
Geographical Lens
01. India
India, a linchpin in the climate negotiations, penned a memorandum of understanding with the UAE to enhance bilateral cooperation on climate action. Prime Minister Mod I’d impassioned call for developed nations to achieve complete carbon footprint intensity reduction by 2050 emphasizes India’s commitment to the cause. Additionally, India threw its hat in the ring by proposing to host COP33 in 2028, positioning itself as a proactive leader in shaping the global climate agenda.
India was not a signatory to Global Renewables and Energy Efficiency Pledge primarily due to the language on coal, which is a major source for industrial activities in the country and it is not possible to eliminate coal in the immediate future. That said, India has already achieved its emission intensity targets 11 years before the promised timeline. The country has been a firm supporter of climate justice; the latter being strengthened with PM Modi announcing a Green Credit Initiative, which will focus on creating more carbon sinks – for example, plants, oceans, and soil that absorb more carbon from the atmosphere than they release. India has added 120 million tons of C02 equivalent annually since 2015 i.e., the Paris Agreement. However, a significant increase in forest cover and schemes promoting renewable energy and targeting emissions in industrial, automotive, and energy sectors is expected to bring a reduction in India’s emissions intensity.
02. Middle East
The host nation, the UAE, played a pivotal role, making substantial contributions, including the launch of the ‘loss and damage’ fund and financial pledges to various climate funds. The COP28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action garnered overwhelming support from 159 nations, emphasizing the Middle East’s burgeoning role in shaping climate policies.
On the COP28 thematic day dedicated to finance, banks in the UAE pledged to mobilize AED l trillion (~USD 270 billion) in green finance. The chair of the country’s banking federation, Abdul Aziz Al Ghurai, stated at the Conference, “At this pivotal moment it is my great honorto announce a landmark commitment that, fulfilling the UAE ambition, our UBF (UAE Banking Federation) banking, national banks, have collectively pledged to mobilize over l trillion dirhams.”
At the UN Climate Summit, the UAE also launched Alterra, a groundbreaking USD 30 billion investment fund for transformative climate partnerships at COP28. This investment vehicle will provide a major impetus to finance the energy transition.
COP28 President Dr. Sultan al-Jaber will be the Board Chairman of Alterra.
03. United States
The United States sho cased its renewed commitment to climate action with a slew of significant announcements. These included joining the Powering Past Coal Alliance, joining the Freshwater Challenge, pledging USD 3 billion to the Green Climate Fund, and introducing rules to curb methane emissions by almost 80 percent through 2038. Vice President Harris stated support for phasing out ‘unabated coal,’ but no other fossil fuels were mentioned during her talk at the COP28 Climate Summit. The UAE Consensus does agree to transition away from fossil fuels, however, the language is still voluntary and how the US is likely to navigate this issue remains to be seen. Probably, the US will most likely continue to implement the Inflation Reduction Act, increase clean energy use, and begin working towards reducing the demand for fossil fuels.
Sector Lens
While some sectors were impacted positively, others will have to be watchful and mend ways to meet the goals finalized at COP28. Renewable energy emerged as a cornerstone of discussions, with over 130 countries pledging to triple renewable energies by 2030. The focus on breakthroughs in renewable energy technologies and commitments to substantial investments reinforcing the sector’s pivotal role in transitioning to a sustainable energy future.
Similarly, the public and private financial sector played a pivotal role with financial commitments exceeding USD 85 billion, showcasing a growing awareness of the sector’s role in driving climate action. Major contributions to climate funds and initiatives indicated a palpable shift towards sustainable finance, highlighting the industry’s role in fostering a green economy.
What’s in it for businesses?
The private sector has a fundamental role to play in implementing the solutions that will get the world to net zero. This means it is vital to understand businesses’ views on decarbonization.
The private sector at this year’s COP was very active and most participants are aiming to align their corporations and business with the zero targets essential for a l.5-degree aligned pathway. This involvement extended to launching forums, such as the Climate and Philanthropy Business Forum, held alongside the World Leaders Summit, to aggregate commitments and announcements, fostering collaboration among business leaders and philanthropists. There was also a focus on supporting small and medium-sized enterprises (SMEs) across the Middle East in their decarbonization efforts and assisting with accountability and disclosure practices, particularly in emerging markets, through initiatives like the Net Zero Mobilization Charter.
We Mean Business Coalition completed its Corporate Stock take for about 300+ of the world’s large companies and emitters, some highlights from these sectors are worth noting for organizations[l].
Road Transport
Rapid progress in scaling passenger vehicle uptake in both the established markets of Europe, the US and China, as well as emerging markets, where electric cars are not common. However, financing, grid capacity and consumer interest pose challenges in developing economies, while strategic policy support and investment will be needed to overcome high costs in the road freight sector.
Energy
Globally, generation has outpaced annual predictions. Solar and wind capacities deployed in 2020 surpassed projections made in 2015 by 80 percent and 20 percent, respectively.
China and South-East Asia can move beyond legacy coal for electricity production, and regions like Latin America and Africa, with less legacy coal capacity, can meet rising power demand with renewables. Clean energy growth must be coupled with investment in transmission infrastructure to prevent energy bottlenecks.
Concrete and Cement
Reducing emissions from the concrete and cement sectors – which currently account for~ 7 percent of total GHG emissions. 88 percent of lifecycle emissions coming from one ingredient: clinker. Alternatives to clinker are already being developed by businesses but these are not yet at cost parity. As procurers of~ l/3rd of the world’s cement, governments have a role to play in supporting and mainstreaming low-carbon alternatives. Further, in a country like India, where 70 percent of the infrastructure is yet to be built, government policies must create a market for green cement.
Steel
Construction decisions made today will have an impact, years into the future. Now is the time to replace polluting blast furnaces with low emissions technology. To produce near zero-emission steel at scale, the inputs needed (i.e., green hydrogen, recycled scrap steel and renewable energy) must also be ready to scale. System-wide action to hit national targets on renewable energy, clean hydrogen and recycling are critical to steel system decarbonization. Green Steel Certification has become a reality today but lacks uniformity. There is a growing need for steel with less carbon footprint and with carbon taxes added, it becomes a competitive advantage for steel manufacturers to reduce emissions in the value chain.
Hydrogen
Hydrogen plays a crucial role in the decarbonization of key industries such as steel, shipping, and freight. Commercial viability of green hydrogen and supporting infrastructure are major hurdles. Sustained government intervention is going to be essential for overcoming these barriers. Policies across shipping, aviation, and other industries are catalyzing global demand for green hydrogen, even as the more polluting alternatives remain cheaper to produce. Without these policies, companies may not be willing to invest in low-carbon hydrogen.
Agriculture
Food system makes up a striking 25-35 percent of global emissions, and this percentage is rising. The food system produces 50 percent of all methane emissions, primarily from livestock. While land use change like deforestation is driving most of the sector’s CO2 emissions. Regulations such as the Global Methane Pledge and the Declaration on Forest and Land Use are helping, but farmers need financial support to transition to lower-carbon practices such as regenerative farming. Today, regenerative agriculture practices are making it possible to bring food security, while reducing emissions from the value chain. Technologies in precision agriculture also are making a major difference to the sector.
The Way Forward
COP28 bore witness to both significant strides and lingering challenges in the global battle against climate change. The establishment of the loss and damage fund and the substantial financial commitments signaled tangible progress.
The diverse array of announcements and commitments from nations worldwide underscores the shared responsibility in addressing climate change. As the world looks towards the future, the focus must shift from mere rhetoric to concrete actions. The global community, governments, businesses, and individuals alike must collaborate to implement and uphold the commitments made at COP28, ensuring a sustainable and resilient future for generations to come.
The road ahead is challenging, but with concerted effort, it is a road that leads towards a greener, more sustainable planet. The lessons learned and the achievements of COP28 must serve as a launching pad for even more robust global collaboration in the critical years ahead. The stakes are high, but with collective determination, the world can navigate the complexities of climate change and forge a path towards a more sustainable and equitable future.
