Agreements that address the role of fossil fuels and payments for loss and damage will be needed if the summit is to succeed, writes Caroline Varin
Success at the UN Cop 28 climate summit in Dubai this month will be defined by how strong a signal global leaders are ready to send on energy and finance. Whether the meeting is the pivotal event that many are hoping for may depend on the outcome of talks over two sticking points — the role of fossil fuels and who will pay for loss and damage incurred from the effects of climate change.
The stakes are higher than ever this year. A UN report shows that global temperatures are on course to rise to 2.5-2.9°C above pre-industrial levels, and could rise by 3°C this century if efforts on mitigation — cutting emissions — stay the same as today. The Paris climate agreement sets a goal of limiting global warming to "well below" 2°C above pre-industrial averages, and preferably to 1.5°C.
Pressure is mounting for Cop 28 to agree on an ambitious energy package to triple renewable energy capacity and double energy efficiency by 2030, and support to include a phase-out of all fossil fuels is gathering.
Cop 27 last year reiterated language adopted at Cop 26 for a "phase-down" of unabated coal-fired power, despite a push from 80 countries to include language around phasing down all fossil fuels. But there has been a shift in rhetoric this year. Cop 28 president-designate Sultan al-Jaber is calling for a "responsible phase-down of all fossil fuels", and support is growing from the EU, the US, fossil fuel producers such as Canada and Australia, and vulnerable and developing countries.
But a lack of a united line on fossil fuel language — phase-out or phase-down, unabated or all — means that debates risk getting stuck on details, while key producers, including Russia, Mideast Gulf and African countries, and consumer China have signalled they would not support a phase-out. Some want a focus on cutting fossil fuel emissions instead and are seeking support for abatement technologies.
Decisions at Cop are rooted in countries' economies, think-tank E3G programme lead Leo Roberts says. At Cop 26, "countries felt comfortable backing [coal phase-down language] because it reflected a real-world trend, in which economics are firmly stacked against coal power". But "the same shifts are not happening on oil and gas", Roberts says. Coal, oil and gas production in 2030 is the level needed to limit global temperature increases to 1.5°C, according to the UN. Observers hope to see progress on coal, with calls from the US to end foreign financial support for coal-fired power plants. Global coal use continues to hit fresh highs and coal-fired power capacity is still growing.
Times tables
UN secretary-general Antonio Guterres reiterated his call for countries to commit to phasing out fossil fuels with a clear timeline, as well as tripling renewables capacity and doubling energy efficiency. Greenhouse gas emissions must be reduced by 43pc and methane by a third by 2030 in order to not exceed the 1.5°C limit, the UN's Intergovernmental Panel on Climate Change says.
G20 leaders have agreed to pursue tripling global renewable energy capacity by 2030 from 2019, and reaching a deal on this is one of al-Jaber's key goals. He is keen for parties to "build on the outcomes of the G20", but a deal could hinge on whether developing countries get the assurances they need on funding. Investment in Africa's energy sector needs to more than double to more than $200bn/yr by 2030 for the continent to meet its energy-related climate goals, the IEA says.
The world's two biggest emitters, the US and China, this month reaffirmed their 2021 agreement to co-operate on reducing power sector carbon emissions, cutting methane emissions and boosting renewable energy. This sent a positive signal, as strained US-China relations have weighed on co-operation for the energy transition. China unveiled a methane plan. And progress towards a 2021 global methane pledge could come from the US or the EU. Brussels recently agreed a law setting methane limits for fossil fuel imports from 2030. Al-Jaber — who is also chief executive of Abu Dhabi's state-owned oil company Adnoc — is working with the oil and gas industry for it to commit to halving oil and gas industry Scope 1 and 2 emissions — those from producing, transporting and processing oil and gas — and reaching near-zero methane emissions by 2030. "This could be important, but only if companies beyond the usual suspects adopt aggressive methane reduction targets," research organisation WRI energy director Jennifer Layke says. Methane emissions from human activities could rise by up to 13pc over 2020-30, an IEA report found.
Mitigation deals will hinge on how finance discussions progress, not only for the energy transition but also on adaptation and loss and damage. A lack of climate finance from developed countries obstructed progress at Cop 27. A key focus for developing countries is a $100bn/yr climate finance goal, which wealthy nations agreed to provide by 2020 but failed to reach. The OECD says the goal may have been hit last year, although the data are unverified.
German special envoy for international climate action Jennifer Morgan hopes this could "build some confidence". But it depends on how far developed countries are ready to go in setting a new finance goal from 2025. Some developing countries want the goal to be based on costs outlined in a 2022 UN Framework Convention on Climate Change (UNFCCC) report, which are similar to those recognised by the G20 — $5.8 trillion-5.9 trillion before 2030. Agreeing a new number will be difficult.
The same goes for discussions on loss and damage. A transitional committee agreed on recommendations for setting up a loss and damage fund at Cop 28. Parties are likely to stand behind the package, with none willing to risk the consensus as it could affect other decisions, WRI senior adviser Preety Bhandari says. But some members expressed reservations, and deep divisions remain on who should pay into the fund. Some say the list should include countries whose economic circumstances have changed since the UNFCCC was established in 1992.
Saudi Arabia signalled that it favours a "different approach" to contributing to multilateral finance. The EU has promised a "substantial" contribution, while Denmark and Germany also pledged some money, according to WRI. But there are no indications on the amount. Observers point to momentum around broader finance architecture reforms, and the opportunity to increase political pressure during the UNFCCC's first global stocktake, which will conclude at Cop 28.
Stocktake signals
The UNFCCC global stocktake is a five-yearly undertaking to measure progress towards the Paris accord, and is intended to inform the next round of emissions-reductions plans, due in 2025. It should provide all parties with a chance to reflect on past achievements and find common ground. It could also act as an anchor for finance and fossil fuel discussions during Cop 28.
The stocktake needs to "double down on what was committed in Paris in 2015, not just on 1.5°C, the mitigation targets and the clean energy transition, but on loss and damage, finance or building more multilateral cohesion", E3G senior associate Alden Meyer says. But the political response is likely to hit the same stumbling blocks that have hindered Cop negotiations so far. Australian energy minister Chris Bowen says he expects a "substantial and contested discussion". And contributions ahead of the conclusion prove him right.
"This is a particularly big moment — if it goes well, it will set up Cop 30 in Brazil [when new climate targets are due]," Meyer says. "If it goes poorly and doesn't send a clear signal, it is going to make it much harder to build trust over the next two years. And of course, we are running out of time."
