Looking back at COP28: what was born and what regrets were left behind

Source: China Finance 40 Forum

On December 13, local time, the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) (referred to as "COP28") came to an end in Dubai, United Arab Emirates. The conference was originally scheduled to run from November 30 to December 12, but was forced to "postpone" due to the difficulty of reaching an agreement on the text's wording of fossil fuels.

In the hottest year in human history on record, the convening of COP28 has received widespread attention. There is also interest in how the first global stocktake of the Paris Agreement will be completed. The disagreement over the storage and waste of fossil fuels in the run-up to the conference has brought the focus of the conference on whether a global agreement can be reached on the complete phase-out of fossil fuels. In addition, how the "loss and damage" fund established at COP27 will continue to advance the relevant financial arrangements are also questions that COP28 needs to respond to.

What are the main outcomes of COP28, what disappointing or controversial issues have arisen in the course of the meeting, and what voices are worth paying attention to and tracking?

Key Achievements:

1. Complete the first global inventory of the Paris Agreement, and for the first time in the history of the COP, an agreement was reached on the transition away from fossil fuels

On December 13, local time, COP28 reached a consensus on the first global inventory of the Paris Agreement. The final decision of the Conference was unanimously agreed by 198 Parties. For the first time in the history of the United Nations Climate Change Conference, countries included reference to fossil fuels in the text of the final agreement, agreeing on a roadmap for the transition away from fossil fuels. Jaber, president of COP28 and CEO of Abu Dhabi National Oil Company, called the outcome the "UAE Consensus".

Recognizing "the need for significant, rapid and sustained reductions in greenhouse gas emissions to meet the 1.5 degrees Celsius target", the text of the resolution calls on countries to:

By 2030, triple global renewable energy capacity and double global annual energy efficiency, accelerate the reduction of coal-fired power generation, accelerate the global transition to net-zero energy systems using zero- and low-carbon fuels by or around the middle of the 21st century, and "transition" from fossil fuels in a just, orderly and rational manner in energy systems Accelerate action in this critical decade to scientifically achieve the 2050 net-zero target, accelerate the development of zero- and low-carbon technologies, including renewable energy, nuclear energy, and carbon capture, utilization, and storage, accelerate and significantly reduce global non-CO2 emissions, particularly methane, by 2030, accelerate emissions reductions from road transport through a range of pathways, including infrastructure development, accelerate the deployment of zero- and low-emission vehicles, and eliminate inefficient fossil fuel subsidies as soon as possible.

The Paris Agreement requires the international community to undertake a phased assessment of progress in tackling climate change, known as a "Global Stocktake" (GST). The "Global Stocktake" is conducted every five years and lasts for two years at a time. The first global stocktake began at COP26 in 2021 and ended with COP28 and included three phases: data collection and preparation, technical assessment and consideration of outputs.

The global stocktake makes it clear that global greenhouse gas emissions must be reduced by 43% by 2030 compared to 2019 levels to limit warming to 1.5 degrees Celsius, while noting that our current efforts are not sufficient to meet the goals of the Paris Agreement.

2. The "Loss and Damage" fund was put into operation

On November 30, local time, the General Assembly agreed to adopt the text of the agreement on the Climate "Loss and Damage" Fund, which determined the source of funding and the fact that the funds would be held in trust by the World Bank. The "Loss & Damage" fund is operational from the same day. As of December 13, no less than 15 countries, including the European Union and the United States, have pledged about $792 million to the fund, according to COP28 organizers.

3. Add climate finance

Australia, Estonia, Italy, Portugal, Switzerland and the United States have pledged US$3.5 billion for the second phase of the Green Climate Fund (GCF).

共8国政府宣布对“最不发达国家基金”（Least Developed Countries Fund）和“特别气候变化基金”（Special Climate Change Fund）注资，截至12月13日，总计增资规模超1.74亿美元。

As of the same date, the Climate Adaptation Fund had received nearly $188 million in new investment commitments.

4. Methane emission reduction

Fifty oil and gas companies, including giants such as ExxonMobil and Saudi Aramco, have signed a pledge to significantly reduce methane emissions from their oil and gas production by 80-90% by 2030.

In addition, the companies agreed to end flaring by 2030. Flaring is the deliberate burning of natural gas to depressurize the system during oil extraction, and because burning natural gas is less expensive than harvesting natural gas, many companies choose to directly burn the excess natural gas to produce carbon emissions.

5、就全球适应目标（Global Goal on Adaptation）及其框架达成一致

Limited climate resilience exacerbates the climate risks faced by developing countries. However, adaptation financing has been difficult due to the limited economic attractiveness of adaptation projects. OECD research shows that most of the climate finance has so far gone to climate mitigation projects, and adaptation faces a significant financing gap.

The Paris Agreement agrees on "strengthening global climate resilience and resilience and reducing vulnerability to climate risks", or "global adaptation goals". However, the Paris Agreement does not provide a clear definition of this goal. Previously, international negotiations on adaptation have been hampered by disputes over financing and measurement, including the measurement of emissions, the assessment of natural capital, and the measurement of climate resilience.

During COP28, parties agreed on a global adaptation goal and its framework, setting out the criteria needed to build resilience to the shocks of climate change and assess countries' progress in doing so. The Global Adaptation Goals framework reflects a national consensus on adaptation goals and the level of finance, technology and capacity building needed to achieve them.

6. The report "Global Tipping Point" was released

On December 6, the Global Tipping Point report was launched at COP28, led by Timothy Langton, director of the Global Systems Institute at the University of Exeter in the United Kingdom, with technical support from more than 200 researchers from 26 countries.

A climate tipping point is a critical threshold at which a global or regional climate can move from one stable state to another. Once crossed, it leads to dramatic, accelerated, and often irreversible changes in the climate system. The report notes that at current levels of climate change, five major critical systems are already at risk of crossing tipping points, including the melting of the Greenland and West Antarctic ice sheets, the slowing of the North Atlantic subpolar circulation, the death of warm-water coral reefs and the disappearance of some permafrost areas.

The report calls on countries to commit to phasing out fossil fuel and land-use emissions, and to completely phase out old patterns by 2050. In addition, the report notes the need to focus on "tipping point" risks for global ecosystems and include them in climate change adaptation assessments, countries' nationally determined contributions, and the first global stocktake.

7. Miscellaneous

• More than 130 countries have signed the UAE Declaration on Resilient Food Systems, Sustainable Agriculture and Climate Action, committing to boost the resilience of global food and health care systems.
• Sixty-six countries have ratified the Global Cooling Pledge to reduce cooling-related emissions by 68% from current levels from today.

Regret and controversy

1. Disputes arise between the organizer and the appointment of the chairman

COP28 is the first United Nations climate conference hosted by a member of the Organization of the Petroleum Exporting Countries (OPEC). The appointment of Abu Dhabi National Oil Company CEO Jaber as COP28 presidency and the host country, the United Arab Emirates, which played a key role in coordinating the negotiations and brokering the agreement, has sparked widespread controversy and international concerns about "greenwashing" or a conflict of interest at the meeting.

Jaber focused on increasing renewable energy production and improving energy efficiency rather than phasing out fossil fuels, arguing that the idea that "phasing out fossil fuels is the only way to limit global temperature rise" is "unfounded in science" and that "phasing out fossil fuels does not promote sustainable development". This statement sparked widespread controversy.

2. The final agreement does not meet expectations on the future of fossil fuels

On December 8, COP28 released a draft agreement that proposed several different options for how the 2020-2030 fossil fuel use target should be reflected in the final agreement, from agreeing to "phase out fossil fuels according to the best available scientific methods", to "phasing out fossil fuels that continue unabated", to not mentioning the future use of fossil fuels at all, which sparked widespread controversy.

On December 11, the day before the closing, COP28 updated the draft agreement to completely remove the words related to "phasing out fossil fuels" and only listed a series of actions that countries "can" take to achieve the goal of net-zero greenhouse gas emissions by 2050, including "reducing the use and production of fossil fuels in a just, orderly and equitable manner", exacerbating the controversy, with some countries accusing Saudi Arabia and other oil-producing countries of trying to hinder efforts to combat global warming.

The EU climate commissioner said it was "clearly inadequate" and that "for most emissions, we have no choice but to cut them as quickly as possible and phase them out." The German foreign minister said that claiming that fossil fuels can play a necessary role in the future is misleading to the world, runs counter to EU energy policy, and will also provide a basis for new coal power plants. UN Secretary-General António Guterres said that a central aspect of COP28's success is to "agree on the need to phase out fossil fuels". The U.S. State Department said the language on fossil fuels needed to be "significantly strengthened." The UK government said the draft was "disappointing" and "not far enough" and reiterated that "the UK's position is clear: unabated fossil fuels must be phased out to meet climate targets."

In addition, the Minister of Natural Resources of Samoa, an island nation in the South Pacific, said on behalf of a range of small island states disproportionately affected by climate change that their voices were "not being heard". The Marshall Islands Ministers of Natural Resources and Commerce in the Western Pacific said they were "not here to sign a death warrant" and called for agreement on the phase-out of fossil fuels.

Amid the controversy, the conference, which was scheduled to end on December 12, was postponed by one day. According to a United Nations release, delegates were engaged in intense negotiations that night over whether the text should include "phase down" or "phase out" fossil fuels. Unfortunately, the final version of the agreement, released on December 13, still does not include the words "phase out" fossil fuels, but ultimately adopts the language of "transition away from all fossil fuels" in the energy system in a just, orderly and equitable manner.

At the same time, the final agreement remains criticized for the lack of concrete initiatives on how poor countries can finance the fossil fuel transition and adaptation to global warming. On December 10, the International Energy Agency (IEA) released an analysis saying that as of that date, the climate commitments made by countries were still insufficient to support the goals of the Paris Agreement. The IEA estimates that countries' COP28 climate pledges will cumulatively reduce global greenhouse gas emissions by 4 billion tons, less than one-third of the volume needed to meet the temperature target.

3. Developed countries are far from fully meeting their climate commitments

While the Loss and Damage Fund, once considered one of the "hardest bones" in climate negotiations, went operational during COP28 and received its first $792 million infusion, it is still far from enough to cover the $100 billion needed to cover the losses suffered by developing countries due to natural disasters and rising sea levels.

The Paris Climate Agreement stipulates that climate finance obligations should be distributed to different countries on a "common but differentiated" basis, which means that for developing countries, on the basis of all COP signatories taking action to address the climate crisis, historically major carbon emitters will have to take more responsibility and be more able to support developing countries to reduce emissions. It is based on this logic that in 2009, developed countries pledged to provide developing countries with $100 billion a year in climate finance.

However, for many years, climate finance support in developed countries has been inadequate, slow and unevenly distributed. In 2021, developed countries provided $89.6 billion in climate finance to developing countries, 68% of which was in the form of concessional loans. While this is conducive to risk prevention, it also exacerbates the debt burden of developing countries.

During COP28, developing countries continued to urge developed countries to fully meet their climate finance commitments, and the two sides also began negotiations on a new annual climate finance target. The COP28 negotiations also address how to better leverage the role of multilateral development banks (MDBs) in risk-sharing and mobilizing private sector finance.

Despite this, existing investment commitments are insufficient to support developing countries in their clean energy transition and climate change adaptation. According to the UNEP's recently released Adaptation Gap Report 2023, the current financing raised by developed countries is far from sufficient to help developing countries adapt to climate change, and is estimated to be only one-tenth to one-eighteenth of the adaptation finance needed by developing countries.

4. EU carbon tariffs have caused controversy

During COP28, the "carbon tariff" (CBAM) introduced by the EU was criticized by delegates from Brazil, Africa, China, India and other countries and regions. Many participants argued that the CBAM is fundamentally a unilateral protectionist measure that does not serve its stated decarbonization goals or international trade. Representatives of many African countries believe that African economies will be directly affected by the CBAM.

Sun Zhen, a first-level inspector at the Department of Climate Change of China's Ministry of Ecology and Environment, told Kurt Vandenberghe, director of the European Commission's Directorate-General for Climate Action, at a side event at the China Corner of COP28, that "if you want to lead the world, you should stop carbon tariffs", China's carbon market mechanism is the result of international cooperation and Xi the result of learning from multiple markets, including the European Union and the United States, but this does not mean that China's carbon market will open the door to the EU's carbon border adjustment mechanism.

At a recent event in New Delhi, India's Minister of Commerce and Industry, Piyush Goyal, said that retaliatory measures against the EU's carbon border mediation mechanism could be introduced. Research by the Centre for Social and Economic Progress, a New Delhi-based think tank, shows that Indian iron and aluminium exporters could lose up to $2 billion to pay border adjustment taxes to European countries because of the CBAM. The European Union responded that the "sole purpose" of the CBAM was to prevent carbon leakage. European Commissioner Peter Liese said that in order to achieve the goal of reducing carbon emissions by 55% by 2030, it is unrealistic not to implement CBAM, and the setback of CBAM will have a more far-reaching impact.

Voices from COP28

To those who oppose an explicit reference to phasing out fossil fuels in the text of the climate conference, I would say that it is imperative whether they want it or not. Hopefully, it's not too late.

- Guterres, Secretary-General of the United Nations

I have been involved in climate negotiations for 16 years...... It is this General Assembly that has been the most difficult.

——Xie Zhenhua, China's climate envoy

(Note: Xie Zhenhua introduced at the press conference on December 9 that the most difficult thing is this conference, because there are more than 200 problems to be solved, "we have to do subtraction, it is easy to do addition, and it is difficult to do subtraction.") Xie Zhenhua said that China is willing to work with other countries to strive for the same as in the past, and after difficult negotiations, everyone will find common ground and seek the greatest common denominator. ）

Although we have not been able to completely turn the page of the fossil energy era in Dubai, this result is the beginning of the end. Now is the time for all governments and businesses to translate their commitments into tangible economic results, acting now.

– Simon Steele, Executive Secretary, UNFCCC

Many would have hoped that the COP28 agreement would make it clear that fossil fuel use will peak and fall between 2020 and 2030, but we know that this is the result of a compromise between multiple parties.

—Kerry, U.S. Special Envoy for Climate

We should be proud of our historic achievements...... This is a strengthened, balanced, but undoubtedly historic package to accelerate climate action, and this is the UAE Consensus.

- Jaber President, COP28 President

Looking to the future

At COP28, countries negotiated a framework for enhanced transparency, laying the groundwork for a new phase of implementation of the Paris Climate Agreement. The United Nations is developing transparency reporting and review tools for Parties, which have been showcased and tested at the Conference. The final version of the reporting tool is expected to be generally available by June 2024.

At COP28, the parties agreed to hold COP29 in Azerbaijan on 11-22 November 2024 and COP30 in Brazil on 10-21 November 2025. At COP29, countries will need to set new climate finance targets that reflect the scale and urgency of the climate challenge, and at COP30, parties will need to submit new nationally determined contributions to support the goals of the Paris Climate Agreement, the United Nations said.