We should treat COP28 as an opportunity to scrutinise the wealthy polluters and their plans up close and ask questions
Photo: iStock This year a prominent oil and gas producer country is hosting the world’s biggest annual climate conference at a time when the world is expected to cross 2 degrees Celsius of warming despite climate pledges. The irony is not lost on anyone, with metaphors comparing it to a tobacco company proselytising about the health damages caused by smoking.
Yet the prominence of the United Arab Emirates that enabled its appointment as the Presidency of COP28 is more of a mirror to the world than one might like to admit. Renewables and electric vehicles have made remarkable progress — the Intergovernmental Panel on Climate Change (IPCC) estimated that on a unit costs basis, solar energy has dropped 85 per cent, wind by 55 per cent and lithium-ion batteries by 85 per cent. The International Energy Agency (IEA) has projected a peak in fossil fuel demand this decade.
So, with the UAE’s involvement in climate summits, what we may be witnessing is an industry that is desperate to maintain its relevance in a decarbonising world. This may explain why the OPEC has a COP Pavilion for the first time — they want to show that they are part of the solution. This fits with the current COP28 Presidency’s vision of being the most “inclusive” COP ever — even oil and gas companies are brought to the table, egregious as that may sound.
However, the fossil fuel era is not over. Around 55 per cent of the global primary energy consumption came from oil and gas in 2022, and 27 per cent from coal. Renewables provided only 28 per cent of electricity.
While coal production is projected to be on a declining path after 2030, oil and gas production would continue to grow beyond 2050. According to the UNEP’s Production Gap report, the difference in production levels from what would be consistent with a 1.5°C scenario is projected to be 84 million barrels per day for oil and about 3.8 trillion cubic metres per year for gas in 2050.
For now, fossil capital still rules. So rather than pretend that they don’t exist, we could treat COP28 as an opportunity to scrutinise the wealthy polluters and their plans up close and ask questions. Why are you still expanding oil and gas production during a climate crisis, when you possess the means to switch to a zero-carbon energy system? Have you fully implemented the methane abatement strategies that the IEA has stated to be the lowest hanging fruit? Have you seen success with the carbon capture technology that is supposed to be the mythical silver bullet? How much climate finance have you provided to help the formerly colonised, still developing world ascend on a low carbon growth path?
One way of framing how COP summits structure discussions is along the two prongs of climate ambition and means of implementation. On the former, rather than knock the large sections of the poor world still trying to build vital infrastructure and gain 24x7 electricity access, we find it more useful to spotlight the aforementioned wealthy polluters.
The United States, ever the climate villain, rolled up to COP27 with a shiny new climate bill. Since then, it has also grown to become the world’s largest liquefied natural gas exporter, averaging exports of 11.6 billion cubic feet per day in the first half of 2023. Natural gas, with even a 0.2 per cent leak rate is as polluting as coal since it mostly comprises methane.
Australia, with the world’s second highest per capita agricultural emissions, doesn’t mandatorily report emissions from its industrialised agriculture sector.
The UK is further offshore oil drilling in the North Sea, with UK regulators giving a go-ahead to a major oil drilling project in the Rosebank Fields off the Coast of Shetland Islands, UK’s northernmost territory. The government plans to grant hundreds of oil and gas licenses.
Some have suggested that China’s coal demand will soon peak, but China is still consuming more than half of the world’s coal annually.
On means of implementation, it is useful to spotlight finance, or the lack thereof. The Just Energy Transition Partnerships deals announced with much fanfare haven’t worked, with recipient countries like South Africa and Indonesia deeply unhappy with the quality and terms of finance that the G7 countries are offering. The $100 billion has not been delivered till 2021; it may be met in 2022 but we haven’t seen the data to corroborate that claim. The US Treasury Secretary Janet Yellen said that her country can “certainly afford to support Israel’s military needs and also support Ukraine’s Struggle” but that doesn’t seem to be the case for climate finance.
Meanwhile, attention is diverted to fraudulent voluntary carbon markets to provide much needed climate funding. And G7 countries have been stalling talks on increasing the capital base of MDBs, which could boost their financing capacity in line with their newly added mandate of addressing climate change.
Various other global trends have shaped the climate discourse this year. The trend of protectionism in the name of climate action continued with the EU’s controversial Carbon Border Adjustment Mechanism entered into application in its transitional phase, with the first reporting period for importers ending 31 January 2024.
The IPCC Synthesis Report was published in early 2023 reinforcing that current climate targets put us on a dangerous path of nearly 3 degrees warming by the end of the century.
Multiple summits discussed the global debt crisis and the need for reforming multilateral development banks.
Enthusiasm for the voluntary carbon market plodded on in a laboured fashion after a slew of fraud allegations, such as the expose on Verra’s forestry credits and CSE’s investigation on India’s offset market – talks are now trying to focus on the elusive notion of high integrity markets with high quality credits.
There’s a lot going on, good and bad. On the one hand, the world is responding to the urgency for decarbonization with a mix of global and domestic signals. On the other hand, it seems that the needle has shifted negligibly, and incumbent fossil technologies and wealthy polluter elites will never allow the equitable climate transformation we need.
It is within this paradox, that we descend on Dubai to keep fighting the fight, confronting polluters, asking the tough questions and envisioning a future that benefits both climate and people. Because the urgency is as high as ever. “COP28 in Dubai, comes at a time when the world is reeling from the pain of extreme weather events; and the need for urgent action is an imperative,” said Sunita Narain, CSE’s director-general. India experienced an extreme weather event on 86 per cent of the days for the first half of 2023.
“The Global Stocktake (GST), which will be at the centre of COP28, is an opportunity to address the need for equity so that we can build a future pathway that is bold and ambitious. We need leadership in our fractured world that can set aside differences to combat this existential crisis that confront humanity.”
So, what does COP28 have in store?
GST is at the center of negotiations this year, being the largest-ever assessment on global climate commitments. Although there is no formal agreement on how GST will influence future climate ambition, the final output will have both a backward-looking assessment and forward-looking elements.
We expect the cover decision to call out countries, particularly the developed polluters, on their lack of ambition compared to historical emissions debt.
At the same time, the GST must lay out a roadmap for stronger implementation of climate targets for 2030 and beyond. Strong language on fossil fuel phaseout in the GST can influence greater focus on the issue in other negotiations.
There must also be clarity on how the GST will continue to reflect in ongoing processes such as the Global Goal on Adaptation and the New Collective Quantified Goal on climate finance.
On mitigation, the goal to triple global renewable energy capacity is being endorsed by many countries and must be agreed upon at COP28.
However, it must be noted that for the clean energy transition to be equitable, the primary onus is on the developing world to make the transition, and targets such as tripling renewable power should be more ambitious for the rich countries. And it will require addressing regional imbalances, redirecting financial flows to underserved regions, and incentivising renewable adoption in developing nations.
Moreover, phasing up renewable energy without phasing out fossil fuels is not likely to make the requisite dent in global emissions.
Finance must be key in mitigation discussions to avoid the deadlock of the Bonn climate conference of June 2023 — the demand of the LMDC bloc on more financial support ambition to enable mitigation ambition must be heard in good faith.
The 2023 Adaptation Gap Report by the United Nations Environment Programme found that adaptation finance needs have not been met and the globally acknowledged goal to double adaptation finance is no longer enough. Not only does this mean that finance flows have been slow, but it also shows the adaptation needs of developing countries are outpacing their capacities each year to respond.
The goal to double adaptation finance will most likely be accepted as an outcome in the GST, however this target must be increased to meet the growing needs of the Global South. Negotiations on the Global Goal on Adaptation are still facing disparities on what elements the GGA can be assessed on and whether it must incorporate finance.
Like other aspects of climate action, finance is a requirement for developing countries to not only build adaptive solutions but also formulate National Adaptation Plans. We expect the GGA to be developed with the inputs from the GST, and with the principle of CBDR-RC at its core.
The Loss and Damage Fund (LDF) negotiations have so far ended in a compromise, with developed and developing countries agreeing to have the World Bank host the Fund as an intermediate host for four years. If the current draft is accepted at COP28, the World Bank will be subjected to evaluation by an independent committee at the end of its tenure.
Developing countries have, however, put forward some conditions such as a clear exit strategy from the World Bank. We expect the conditions to be met or an independent secretariat to be created for the Fund.
Additionally, COP28 should see the LDF being funded with the substantial grant-based pledges coming from developed countries. And eligibility to receive funds from the LDF should be extended to all developing countries.
Discussions on the New Collective Quantified Goal on climate finance must progress towards determining an ambitious quantum for the new goal, guided by the escalating needs of developing countries. The focus must be on non-debt creating finance, and clear targets must be identified for private and public contributions. Developed countries have been attempting to shift responsibility to the private sector, MDBs, carbon markets and Article 2.1c to avoid committing more money from public budgets.
Some Parties have proposed that Article 2.1c should be a separate agenda item at COP28. If discussions take place, an interpretation of the article that is accepted by all Parties must be agreed upon, and concerns of developing countries regarding green conditionalities that 2.1c may bring about, must be heard.
Key details are still being worked out in the Article 6 rulebook. In the absence of operational guidance in some areas, countries and organisations have liberally interpreted Article 6-based markets, leading to deals that lack transparency and risk repeating past mistakes.
It is, however, also important to prioritise quality over haste in discussions to avoid compromising the integrity of the market.
Additionally, as frauds are increasingly uncovered in the voluntary carbon markets, the need and hope are for them to be discussed at COP, with similar rules as those in Article 6 being applicable to them.
We also need to bear in mind that Article 6 has provisions for cooperation beyond markets. There is a need to put more minds into operationalising this part of the statute as much as the markets.
While the Global Methane Pledge announced in 2021 has seen 149 country signatories and may have precipitated a host of methane reduction plans, our analysis found that countries’ domestic policies to reduce methane lack depth, specificity and reporting rigour.
Methane reduction plans of the top oil and gas companies in terms of production focus mainly on Scope 1 and 2 emissions, when Scope 3 emissions comprise 80 per cent of their emissions. And they have methane intensity targets which could lead to an absolute rise in methane emissions when production is expanded.
Methane is expected to be in focus with the US and China announcing a Methane Summit to be hosted at COP28.
The UAE COP Presidency has proposed a fund to support methane mitigation in the oil and gas sector, while the US initiated the Methane Finance Sprint in April 2023, aiming to raise at least $200 million in new public and philanthropic donor support for developing countries to tackle methane emissions.
These are welcome measures but must identify clear targets, sectors and participating entities to make a real impact.
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