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COP28: no landslide deal but a symbolic win on fossil fuels

Economic opinion

Cora Vandamme
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The 28th edition of the UN Climate Conference (COP) concluded on Wednesday 13 December. This annual gathering aims to reduce greenhouse gas emissions and prevent the unwanted consequences of climate change. As usual, the causes and consequences of global warming were hotly debated at this climate conference and fervent pleas for action were made. But words alone will not bring about change and so every year the world mostly looks forward to the concrete actions and agreements that the conference produces. Previous COP meetings resulted in, among others, the Kyoto Protocol (national targets to limit and reduce greenhouse gas emissions, COP3) and the Paris Agreement (legally binding treaty to limit warming to well below 2°C compared to pre-industrial levels, COP21).

In a year that already ranks as the warmest ever recorded on earth, you could think the climate conference would conclude with a far-reaching final declaration. But as in previous years, national interests and short-term thinking stand in the way of a truly ambitious final outcome with concrete measures. This does not mean that the COP28 was a complete disappointment, however. During the summit, several partial agreements were made, the progress towards the Paris climate goals was assessed (the so-called Stocktake) and fossil fuels were explicitly mentioned in the final declaration for the first time ever. In this article, we take stock of the most important outcomes of the COP28.

Loss and damages fund takes shape

This year's COP got off to a strong start with an agreement on the operationalisation of the Loss and Damage Fund, the outline of which was set out at the previous COP. The fund aims to help poor countries that are confronted with losses and damages caused by man-made climate change. So far, a total of about $720 million has been pledged to the fund by rich countries. These pledges might seem sizeable but the total figure pales in comparison to what is needed. A recent study by the UUSC (a human rights non-profit) estimates that climate change already causes more than $400 billion in damages and losses annually in developing countries and this figure will only increase going forward. Moreover, commitments are often vaguely worded, leaving much uncertainty about the timing and modalities of the pledged funds.

Tripling renewable energy and doubling energy efficiency

Another achievement of COP28 is the pledge made by 118 countries, including Belgium, to triple renewable energy generation capacity by 2030 and double annual growth in energy efficiency improvements until 2030. It is important to note, however, that these pledges are non-binding. Moreover, the signatures of China and India are missing. A setback for the scope of the agreement as both countries are among the largest consumers of fossil fuels worldwide.

Increasing focus on methane

Just like last year, there was again a special focus on methane gas emissions during this year’s climate conference. Methane is a greenhouse gas that is still missing from many national climate goals even though it is 84 times more harmful than CO2 (on a 20-year timescale) and it disappears from the atmosphere dozens of times faster. In other words, it is a greenhouse gas for which measures can produce fast results. A key announcement at the COP28 methane summit was the launch of the Oil & Gas Decarbonisation Charter (OGDC), in which 50 oil and gas companies that are responsible for 40% of global oil production, committed to significantly reduce their methane emissions. Other important announcements include the set-up of a $1 billion fund to subsidise methane gas emission reductions and the new US standards for reducing methane emissions in the oil and gas sector, which should prevent the equivalent of 1.5 gigatons of CO2 emissions over the next 15 years.

Fossil fuels as a major bone of contention

The topic that made the biggest splash at COP28 was the phase-out of fossil fuels. From the start, it was unlikely that unanimity would be found on this fraught topic. After all, fossil fuels are an extremely important source of income for Russia and many Arab countries. The limited chance of success became especially clear when reports surfaced during the conference that the OPEC cartel had called on its members to reject any deal that focused on energy, specifically fossil fuels, rather than emissions. The fact that negotiations were chaired by oil state Dubai, and more specifically by the head of the national oil company, made finding a consensus extra difficult.

The initial draft version of the final declaration referred to reducing the use of fossil fuels as one of eight possible options to reduce greenhouse gas emissions. This vague wording caused great dissatisfaction among a majority of participants at the conference and this resulted in negotiations going into overtime. The final declaration addressed some of the grievances of the more ambitious countries by mentioning the "transition away from fossil fuels in energy systems in a just, orderly and equitable manner". But while fossil fules were mentioned, the agreement did fall short of calling for a total phasing-out of fossil fuels. Moreover, many loopholes remain open (including the use of carbon capture and storage, an untried technology) and there is ambiguity around the financing of the energy transition.

Despite all the above reservations, this first mentioning of all fossil fuels in the final report does send a strong signal to the future. At COP26, the final agreement for the first time included a provision calling for the phase-out of coal power and the phasing-out of 'inefficient' fossil fuel subsidies. Barely two years later, the transition away from all fossil fuels is now in the final text. This gives a clear signal that minds are increasingly ripening to the idea of a world without fossil fuels. Moreover, this final treaty has increased the chances that the complete phase-out of fossil fuels could be included in the final text of one of the next climate conferences.

Conclusion

Overall, we can conclude that COP28 was a moderately successful climate conference. No major landslides deals emerged but many small steps were taken in the right direction. It is clear that the energy transition is gaining momentum and that steps once thought to be impossible, like the inclusion of fossil fuels in the final COP text, are actually happening. What is important now is that promises and agreements are effectively translated into action.

Disclaimer:

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