Sustainability Column | Towers and squares: COP28 in the eyes of an ESG worker

As part of a "climate army" returning from Dubai, Cao Yuan sees COP28 (the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change) as "a global temple fair".

"The venue is like the Altar of the Six Patriarchs, and the text of the agreement cannot pass a page in half a day, and the consensus is all difficult," said the SynTao partner and chief consultant of the Zero Carbon Initiative project, laughing at Wall Street. ”

And the price of real exposure to these opportunities is "waste legs". "The venue is huge. Cao Yuan's sigh and emotion sent a bright yellow stadium under the scorching sun may reflect a complex perception: COP28 in oil-producing countries also has a new, bright and bravado temperament of "local tyrants".

However, this "climate temple fair" has set a record, at least in terms of scale. Last year's COP27 was held in Sharm el-Sheikh, Egypt, and in 2021 in Glasgow, UK, but the scale of the two conferences was affected by the pandemic. The current session is about twice the size of last year's session and is the largest since its inception in 1992.

One of the important reasons for this is the participation of the Chinese delegation, from the central government to local governments, to various enterprises, as well as the opening of the "China Corner" venues, which has greatly increased the number of exhibitors and events.

"Towers" and "Squares"

For the entire COP28 ecology, Cao Yuan uses "towers" and "squares" to describe them. "The Paris Agreement is an OKR mechanism (Objectives and Key Results) and a 'tower' with a hierarchical organization as the central hub, connecting the 'square' carnival that accommodates all kinds of specific people, places, production lifestyles and solutions. He explained what he had seen on Wall Street.

"We see that whether the OKR mechanism of the Paris Agreement can avoid the landslide trap through the first inventory largely comes from the interaction under this 'square and tower' structure, and the 'decisions' in the resolution text are frequently difficult to deliver, and the number of 'recognition' has increased again, which also reflects that the tower is responsible for generating text and the square is responsible for creating reality. Cao Yuan said that it is the interaction between the two that has created the current consensus on the zero-carbon transition.

In his eyes, the network structure formed by the two is effective, the consensus around the zero-carbon transition is broad and deep, and the trend is irreversible.

Since the United Arab Emirates, the host of COP28, is one of the world's largest oil producers, the battle over fossil fuels is also seen as a dramatic "square" to watch. "The UAE and Saudi Arabia have demonstrated the strategic ambition to use the climate consensus to get rid of the resource curse and establish the center of the world's geopolitics through the Belt and Road, new energy and new materials in the opportunity of geopolitical reshaping of Eurasia. Cao Yuan told Wall Street that the Saudi pavilion in the Green Zone on the scene basically used a variety of cool display methods to convey this signal.

For example, Saudi Arabia's green initiatives include photovoltaic hydrogen production, green hydrogen fuel cells, new desalination driven by electricity, ecological restoration and new green buildings, and zero-carbon transportation systems.

In addition, Aramco, the world's largest oil company, showcased a demonstration project that has been put into operation since 2017 and brings together global carbon-negative and low-carbon technologies, including CO2 capture hydrogenation to synthesize petrochemicals, CO2 concrete capture, and recycled plastics, expressing that the future of the petroleum industry is the photosynthetic industry, and photovoltaic hydrogen production + CO2 capture + recycling has become an opportunity.

The "bottom line" is kept

One of the key outcomes of COP28 was the first Global Stocktake (GST), a comprehensive review of progress on the agenda since the entry into force of the Paris Agreement. "This confirms the viability of a 'bottom-up' approach, which includes NDCs, national adaptation plans (NAPs), and autonomous international finance and technical cooperation, as well as a long-term strategy, which includes a commitment to 2050 net-zero emissions and 1.5°C. Cao Yuan said that as an important "alignment benchmark" and "ratchet tooth", the results of this inventory have set a starting point for countries to update their 2035 independent emission reduction contributions and other targets in 2025.

According to the preview of the "First Global Stocktaking Results" resolution, although countries' current carbon reduction performance is seriously off the 1.5°C pathway, and although the window is facing closure, there is still a 50% chance that the 1.5°C target will be achieved, and countries should achieve a series of key goals in the "critical decade" before 2030, including three times the scale of renewable energy, two times the annual rate of energy efficiency, a significant reduction in methane, and a halt to deforestation.

In addition, the results of the stocktaking include adaptation and climate resilience, financial and technical cooperation, and other international cooperation mechanisms.

In Cao Yuan's view, the first global stocktake is a key mechanism design of the Paris Agreement, and it is also the first big test of its effectiveness - the first GST results have passed the test, which has significantly strengthened people's confidence in the Paris Agreement and even multilateral mechanisms such as the UNFCCC, which is worth celebrating.

And "long-term strategy" and "bottom-up" are two major innovations of the Paris Agreement. Different from the "top-down" Kyoto Protocol, the Paris Agreement adopts a "bottom-up" structure, which he believes is similar to KPIs changed to OKRs, which are voluntarily signed by member countries, independently propose mitigation and adaptation targets, take stock every 5 years, determine long-term goals against the Paris Agreement, review the highlights and gaps of collective action, recalibrate the action baseline for the next 5 years, and set a baseline for updating the 2035 NDC target.

"As there have always been many divergent interests and positions, there were concerns before the meeting that the consensus on the GST outcome would be too conservative, leading to a loss of information about the 2050 net-zero emissions or 1.5°C target proposed by the Paris Agreement (the collapse of global governance). Judging from the results, the bottom line has been maintained, and there are still opportunities for the 1.5°C goal, and in addition to governments, the extensive concern and in-depth participation of enterprises, social groups, media and the public in the zero-carbon transition have played a role that cannot be ignored. Cao Yuan explained to Wall Street.

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