What You Need to Know.
- After two days of intense negotiations, world leaders adopted a draft decision that sets out international climate priorities in response to the findings of the first Global Stocktake under the Paris Agreement. The decision covers several thematic areas, including mitigation of greenhouse gas emissions, adaptation and resilience in the face of climate change, financing and means of implementation and support for climate projects, and loss and damage funding for climate-vulnerable nations. The text of the draft decision can be found on the UNFCCC’s website here.
- The most highly scrutinized and heavily debated aspect of the agreement was the path forward on the use of fossil fuels, greenhouse gas emissions from which, the decision notes, have “unequivocally caused global warming of about 1.1 °C.” Recognizing the need for deep, rapid, and sustained reductions in greenhouse gas emissions in line with 1.5 °C pathways, the decision calls on Parties to contribute to the following efforts related to the energy transition and fossil fuel use:
- Tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030;
- Accelerating efforts towards the phase-down of unabated coal power;
- Accelerating efforts globally towards net zero emission energy systems, utilizing zero- and low-carbon fuels well before or by around mid-century;
- Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science;”
- Accelerating zero- and low-emission technologies, including, inter alia, renewables, nuclear, abatement and removal technologies such as carbon capture and utilization and storage, particularly in hard-to-abate sectors, and low-carbon hydrogen production;
- Accelerating and substantially reducing non-carbon-dioxide emissions globally, including in particular methane emissions by 2030;
- Accelerating the reduction of emissions from road transport on a range of pathways, including through development of infrastructure and rapid deployment of zero and low-emission vehicles; and
- Phasing out inefficient fossil fuel subsidies that do not address energy poverty or just transitions, as soon as possible;
- While coal has been mentioned in previous COP decisions, the language on “transitioning away from fossil fuels” represents the first time that countries have agreed to language that explicitly curtails all fossil fuels in the nearly three-decades-long history of the UN climate summit. Though hailed by COP28 President Al Jaber and other world leaders as a “historic package to accelerate climate action,” the decision, and how it was adopted, was not without its critics.
- UN Climate Change Executive Secretary Simon Stiell pushed the world to strive for more action. “COP 28 also needed to signal a hard stop to humanity’s core climate problem—fossil fuels and their planet-burning pollution. Whilst we didn’t turn the page on the fossil fuel era in Dubai, this outcome is the beginning of the end.”
- Anne Rasmussen, lead delegate for Samoa, complained that delegates of the small island nation nations weren’t even in the room when President Al Jaber announced the deal was done. Garnering the longest applause of the session, Rasmussen declared that “the course correction that is needed has not been secured” and that the deal could “potentially take us backward rather than forward.”
Why This Matters for Businesses.
- Though the priorities identified in the draft decision send a strong signal to Parties—and global businesses—on how they should shape and structure their energy transition strategies, implementation of these priorities is voluntary and will differ based on each country’s means and national circumstances.
- With COP28 concluded, the work falls once again to national policymakers to implement laws and regulations that operationalize these climate priorities. Businesses, particularly those operating in multiple jurisdictions, should closely monitor this process to assess the impact on their industries and identify opportunities to actively engage with and shape national and international climate change policies, while also seeking to implement the most efficient and cost-effective decarbonization strategies.
- COP29 will be held in Azerbaijan from November 11 to 22, 2024. In addition to operationalizing the climate financing and means of implementation announcements made at COP28, a large focus will be on the findings of the first biennial transparency reports, in which countries will submit inventories of their greenhouse gas emissions. As with the Global Stocktake, the findings of these reports will likely shape the discussions and negotiations at COP29 and continued efforts to accelerate the “transition away from fossil fuels in energy systems.”
- As Executive Secretary Stiell said in his closing statement, “UN Climate Change is now creaking under the weight of mandated processes and workstreams.” Over the next several months, global leaders, activists, and businesses will need to sort through the outcomes of the two-week-long conference in Dubai. The draft decision on the outcomes of the Global Stocktake, the COP28 Presidency’s website, and the UNFCCC Summary of Global Climate Action at COP28 each provide helpful starting places for businesses to begin digesting COP28. Here are some highlights:
- Over 85,000 delegates, including 154 Heads of States and Government, were estimated to have attended COP28, making the conference the largest in UNFCCC COP history.
- Nations, businesses, and philanthropic organizations committed over $85 billion to climate action, including $792 million to the loss and damage fund and $3.5 billion to the Green Climate Fund.
- Over 170 declarations, pledges, and commitments were made at COP28, including: the Global Renewables and Energy Efficiency Pledge, which commits countries to work together to triple the world’s renewable energy capacity by 2030 (endorsed by 130 countries); the Global Methane Pledge, which commits countries to reduce global methane emissions by at least 30% by 2030 (endorsed by 155 countries); and the Energy Transition Accelerator, which creates a new, high-integrity carbon market for purchasing carbon credits in developing and emerging economies.
“As described by the IPCC in its latest report, human-caused climate change impacts are being felt worldwide. The outcomes of COP28 demonstrate the importance of these and similar climate conferences as fora for world leaders, activists, and business leaders to focus the attention of the world on the increasingly urgent need for policy and investment proactivity to address the impacts of climate change. Coming at the end of what was the hottest year on record, COP28 represents an important step in this global response. But keeping alive the Paris Agreement’s goal of limiting temperature increase to 1.5 °C above preindustrial levels will require increased and sustained commitment and engagement from the public sector, the private sector, and civil society.
—Dan Feldman, Partner, Co-Chair of the ESG Practice and Business & Human Rights Practice
More News and Developments.
- Patrick Smith, COP28 Summit Agreement Hailed as “Beginning of the End” for Fossil Fuels, NBC News (Dec. 13, 2023), https://www.nbcnews.com/news/world/cop28-global-warming-climate-summit-fossil-fuels-rcna129465.
- Karl Mathiesen, Zack Colman, Zia Weise, and Sara Schonhardt, COP28 Ends with First-ever Call to Move Away from Fossil Fuels, Politico (Dec. 13, 2023), https://www.politico.com/news/2023/12/12/newest-cop28-climate-summit-text-00131257.
- Seth Borenstein, David Keyton, Jamey Keaten, and Sibi Arasu, In a First, Delegates at UN Climate Talks Agree to Transition Away from Planet-Warming Fossil Fuels, The Associated Press (Dec. 13, 2023), https://apnews.com/article/cop28-climate-summit-negotiations-fossil-fuels-dubai-64c0e39e6ad54a98e05e5201a2215293.
- UN Climate Press Release, COP28 Agreement Signals “Beginning of the End” of the Fossil Fuel Era, United Nations Framework Convention on Climate Change (Dec. 13, 2023), https://unfccc.int/news/cop28-agreement-signals-beginning-of-the-end-of-the-fossil-fuel-era.
Covington’s multidisciplinary COP28 delegation includes leaders of Covington’s ESG, Environment, Energy, Project Development and Finance, Corporate, and Public Policy practices, as well as our unique Carbon Management and Climate Mitigation (CM2) initiative. Our comprehensive and integrated global team is ready to assist clients as they prepare for COP28, engage with key stakeholders while there, and then strategize about and successfully implement ESG corporate policies aligned with COP28 goals. Follow our Climate Hub for Businesses to stay up to date with the latest developments from COP28.