The UN’s 28th Conference of the Parties ended Wednesday. I attended the first week of the COP28 in Dubai. Expectations were heavy for this UN climate summit, on the heels of the first ever Global Stocktake, which calls for “increased ambition across all fronts.” Participants discussed those fronts, including emissions reduction, climate finance and issues that have hitherto been in the background in climate discourse, namely health, inclusivity, and trade. From my vantage point, there are several positives.

On climate finance, it is encouraging to see the Loss and Damage Fund receive commitments of $720 million. The original funding mechanism, the Green Climate Fund, also received a replenishment of $12.5 billion. It’s a good start but a small portion of what is needed. One estimate released at COP stated we need $400 billion to rehabilitate people hit by sea-level rises alone. I also expect questions to be raised over the scale and absence of a replenishment cycle for the Loss and Damage Fund.

It was heartening to see that over 130 nations signed the Global Renewables and Energy Efficiency Pledge. This commits to tripling worldwide installed renewable energy generation capacity to at least 11,000 GW and to double the global average annual rate of energy efficiency improvements to more than 4% by 2030. India and China didn’t join the pledge initially due to the language about a coal phaseout, but it did agree to the text in the final negotiated agreement. This shouldn’t have been a cause for concern. China is already well ahead of other countries in terms of the pace and scale of deploying renewables and has already endorsed the tripling of renewables by 2030 as part of the G20 Summit in New Delhi.

Corporate decarbonization and decarbonization of oil sectors was a theme of numerous discussions. The final agreement calls for a global transition away from all fossil fuels, which is a major step forward from two years ago when negotiators had a hard time agreeing to phase down unabated coal power also. The United Arab Emirates deserves to be commended for leveraging its role as a key global oil supplier to bring 50 oil and gas companies, representing about 40% of global oil production, to make commitments on reducing greenhouse gas emissions for the first time in history. Although it leaves out 95% of total emissions from the oil and gas sector, this is a start. I am curious to see how it pans out over time—whether or not the oil and gas industry will play a constructive role in accelerating climate action now that it is actively involved in the process.

The final few days of COP saw intense negotiations between countries. As they leave Dubai, they have achieved the following.

• Arrived at an outcome of the Global Stocktake process in which key countries have agreed to submit revised National Determined Contributions within two years, with significantly ratcheted up emission-reduction ambitions. This will be critical to bring us back on track for the target of keeping global warming within 1.5 degree Celsius of preindustrial temperatures. The COP president’s plea to include all greenhouse gases, not just carbon dioxide, in NDCs and include a phase-down of all fossil fuels, not just coal, is a significant move. We also need to be careful of the caveats we put in, as that can have a significant impact on the emission reductions we achieve. To me, the most critical term around which consensus is being built is the “phase-down of unabated coal power/fossil fuels.” Abating coal power generation results in 100% of associated emissions being captured and not allowed to be released into the atmosphere, whereas abating oil and gas at extraction and refining stages only enables 5% of associated emissions to be captured, with 95% associated emissions still being released into the atmosphere. These are not comparable.

• Shown intent to support more action in Africa, both for the clean energy transition and resilience building. The good news is Africa was more visible in the COP process this time and in the previous COP hosted in Egypt. African countries have done their bit; at the Africa Summit in September, they committed to a target of achieving 300GW of renewable energy generation by 2030. COP28 saw the launch of the Africa Green Industrialization Initiative to discourage fossil fuels in oil-heavy African countries. However, they need support, primarily through financing and investments. Reforms of multilateral development banks must be geared towards fulfilling this need. This has begun to happen at the margins, but only time will tell whether this will be sufficient.

• Agreed to move forward with the guidance developed so far on the carbon crediting methodologies, so as to build a global carbon market. Voluntary carbon markets and innovative pilots like the one announced at COP28 to use carbon credits for retiring a coal power plant in the Philippines are good tools but will always be subject to lack of credibility and scalability issues. Global markets will help to channel capital to the right projects and bring down costs for all.

 

In addition to the above, I would have liked to see the formalization of a coordinated approach for corporate decarbonization. Acknowledging the role played by corporates at COP28 in discussions and the value of numerous sectoral initiatives like Cement and Concrete Breakthrough and the newly launched ones like Global Decarbonisation Accelerator, we must recognize the need for corporates to be allowed a formal role in the United Nations Framework Convention on Climate Change process. We need a far more structured approach to driving corporate decarbonization. It should have ideally figured in the outcomes of the Global Stocktake process, so that progress on it gets tracked, monitored, and does not get sidelined in subsequent years.