COP28: Should you expect anything earth-shaking?

Protesters, including an indigenous activist from Brazil, demonstrate over climate justice, exploitation by rich countries of poor countries and other climate related issues during the COP27 climate conference on 12 November 2022 in Sharm El Sheikh, Egypt.  (Getty images)
Protesters, including an indigenous activist from Brazil, demonstrate over climate justice, exploitation by rich countries of poor countries and other climate related issues during the COP27 climate conference on 12 November 2022 in Sharm El Sheikh, Egypt. (Getty images)

Summary

  • All negotiations—on emission reduction, energy transition and climate action—will eventually be tied to climate finance

New Delhi: COP27 (Conference of Parties) at Sharm el-Sheikh, the Egyptian city, was scheduled to wrap up last year on 18 November after two-weeks of talks. Hard-fought negotiations, however, went down to the wire at the global climate conference attended by about 100 heads of State and over 190 countries, and when it eventually closed almost two days later, had a breakthrough to show—a loss and damage (L&D) fund— financial assistance for countries vulnerable to climate change impacts.

It is not unusual for COP negotiations—the annual conference convened under the United Nations Framework Convention on Climate Change (UNFCCC)—to go into extra time. “The most difficult issues get deferred to the last moment," noted R.R. Rashmi, distinguished fellow at The Energy and Resources Institute and India’s former principal negotiator under the UNFCCC.

At COP27, a ‘difficult issue’ was an exclusive L&D fund, a demand insisted upon by Small Island Developing States, Africa and other developing countries in the wake of widespread impacts of climate change on vulnerable people. It materialized at the fag-end after political parleys and give-and-take. “Political concessions cannot be made at the level of negotiators; consensus emerges when ministers intervene and the process takes time," explained Rashmi.

A clear-cut legacy of COP27, an L&D fund prised open the door on an issue unresolved for long but stopped short of giving it form or character. The Sharm el-Sheikh Implementation Plan refers only to “matters relating to funding arrangements responding to loss and damage associated with the adverse effects of climate change". The nitty-gritty of the funding arrangement—its nature, scale or host—were left for later. While COP27 ended with the notional agreement on L&D funding, there was none on the resources that will flow into it, Rashmi pointed out.

The task will fall on Dubai when COP28 opens on 30 November. In the interim, a Transitional Committee (TC) established to make recommendations to COP28 on the L&D funding arrangements met five times over the past year to chalk out ways to operationalize it. Recommendations submitted early November include ‘voluntary nature of support’ with developed countries taking the lead in financial contributions and the World Bank operationalizing the fund.

“The L&D fund might be similar to the Green Climate Fund (a funding mechanism under the UNFCCC framework to aid developing countries in climate change related adaptation and mitigation efforts) where the contribution is made by developed countries but purely on a voluntary basis. There is no formula or specific criteria by which the amount of contribution will be decided," observed Rashmi.

Global Stocktake

A heat advisory sign is shown along US highway 190 during a heat wave in Death Valley National Park, California, on 16 July 2023. Temperatures had exceeded the 1.5 degrees Celsius limit on 86 days this year, said the United Nations Environment Programme’s Emissions Gap Report 2023.
View Full Image
A heat advisory sign is shown along US highway 190 during a heat wave in Death Valley National Park, California, on 16 July 2023. Temperatures had exceeded the 1.5 degrees Celsius limit on 86 days this year, said the United Nations Environment Programme’s Emissions Gap Report 2023. (AFP)

The fine-print on operationalizing the L&D fund will be a significant part of negotiations at COP28. Hosted by Dubai at a time of continuing geo-political mayhem, energy crisis, flailing climate action and insufficient climate ambition, COP28 will be focussed on specific areas, chief among them being the conclusion of the first Global Stocktake. Eight years since the adoption of the Paris Agreement where 195 signatories committed to long-term goals to restrict global temperature rise to 1.5-degree Celsius above pre-industrial levels, the Stocktake is meant to be a report card of sorts on how countries have or not have fared in their efforts to tackle climate change. The UNFCCC calls it an ‘inventory’–“looking at everything related to where the world stands on climate action and support, identifying the gaps, and working together to agree on solutions pathways (to 2030 and beyond)."

“This is the first COP after the stocktake—the multi-year process trying to take stock of progress across countries, sectors and finance. The report that has come out says progress is not sufficient and we all need to do more," noted Ulka Kelkar, executive director, climate, World Resources Institute India.

The synthesis report on the stocktake released by the UNFCCC in September puts forth a disconcerting picture. Global emissions are not in line with the pathways required to meet the Paris Agreement goals. It called for “much more ambition in action and support" to implement mitigation measures and emphasized that Nationally Determined Contributions (NDCs)—a necessity from the Paris Agreement which encapsulates each country’s commitment to reduce emissions and adapt to climate change— ought to be enhanced. The agreement requires each country to “prepare, communicate and maintain" its NDCs and submit it to the UNFCCC every five years.

Reports brought out on the back of the Global Stocktake and ahead of COP28 accentuate the grim picture and follow similar arcs. Vaulting emissions, breached targets, inadequate action.

Temperatures had exceeded the 1.5 degrees Celsius limit on 86 days this year, said the United Nations Environment Programme’s (UNEP) Emissions Gap Report, 2023, released last week. It called for “unprecedented action" by all countries since global Greenhouse Gas emissions had set new records in 2022. High-income countries need to further accelerate domestic emission reduction, committing to reach net-zero as quickly as possible while developmental needs in low and middle-income countries must be met alongside a transition away from fossil fuels.

With findings and messages of Global Stocktake and other reports out there, deliberations at COP28 are expected to centre on how much more needs to be done. The Paris Agreement, noted Kelkar, “recognises that countries which have been historical emitters should move faster, do more and act first." The challenge, she said, “will be building a new timetable or NDCs in a way that recognises what the stocktake tells us about needing to do more and move faster, but also recognise that there is a range, in terms of developed countries moving first and giving the developing countries a little more time so as to not compromise on their development."

Rashmi noted that COP28 might witness only an iteration for higher ambition and action in terms of Global Stocktake. “There will not be any earth-shaking or spectacular announcements but an analysis of the report. Some targets or framework decisions might be adopted but little in terms of actual finance mobilization," he said. Kelkar emphasized that it will be critical for COP28 to mobilize a plan of action. “There will be a high-level statement and negotiations on the details of the response," she added.

An aspect where a definitive outcome in terms of a framework adoption is expected is the global goal on adaptation (GGA), another requirement of the Paris Agreement aimed at “enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change."

“The GGA has to be clinched in Dubai. A framework has been prepared, and I think it will get adopted. That will be an important outcome at COP28," said Rashmi.

Energy Transitions

Experts expect all fossil fuels phase down to be negotiated in COP28 in a big way, but commitments may be a long shot.
View Full Image
Experts expect all fossil fuels phase down to be negotiated in COP28 in a big way, but commitments may be a long shot. (HT)

The recurring motif at the last two COPs, beginning with the phase-out/phase-down of coal at Glasgow, and the call by India to phase down all fossil fuels, not just coal, at Sharm el-Sheikh is bound to resonate in Dubai as well. Experts expect all fossil fuels phase-down to be negotiated in a big way, but commitments may be a long shot.

“I am doubtful of any serious commitments for phasing out all fossil fuels, including gas, though it is the need of the hour. Gas needs to be phased out in a much more accelerated manner than what has been projected initially," said Vibhuti Garg, director, South Asia, Institute for Energy Economics and Financial Analysis. The host country can take on a leadership role in the process: “They do have the financial resources unlike other developing countries," she said.

Whether the consequent push for greater renewable energy deployment ends in definitive outcomes on bigger targets remain to be seen. The G20 Declaration at New Delhi had aimed to triple the renewable energy capacity globally by 2030; it also estimated an annual investment of over $4 trillion for energy transitions in the time frame while emphasizing access to low-cost financing to developing countries to make the transition.

Garg anticipates pressure from negotiating parties at COP28 on the language of tripling renewable energy deployment. “It has been included to some extent in the G20 Declaration. But making it binding, having countries agree to it as a formal part of NDCs could be challenging. Particularly so from gas-producing nations as well as the likes of Japan and (South) Korea which are still committing big on fossil fuels. They may not be willing to commit to renewable energy to that degree," added Garg.

On the other hand, a target on energy efficiency might be the low-hanging fruit, she noted, more so since multiple studies have highlighted that renewable energy alone may not solve the 1.5-degree Celsius puzzle. “The benefits of energy efficiency need to be roped in, and some targets, maybe doubling, if not tripling energy efficiency, might be more agreeable," Garg added and pointed out discussions might unfold on critical minerals and energy transition as well at COP28. Ways to reduce emissions in the food and agriculture sector is expected to be a point of discussion as well.

Climate Finance

COP28 president Sultan Al Jaber. “We must act. And we must deliver in Dubai,” he told delegates during a pre-COP event in Abu Dhabi recently.
View Full Image
COP28 president Sultan Al Jaber. “We must act. And we must deliver in Dubai,” he told delegates during a pre-COP event in Abu Dhabi recently. (AFP)

All negotiations on emission reduction, energy transition and climate action are however eventually tied to the perennial thorn—climate finance, and the unkept promises towards the developing world.

The promise of $100 billion annually to be mobilised by the developed nations for climate action in developing countries was made at COP15 at Copenhagen 14 years ago and meant to start by 2020. The OECD report, released in November, pegged the contributions from the developed world in 2021 at $89.6 billion or $10 billion short of the goal. Based on analysis and future scenarios, the report suggested the target might be met in 2023.

The G20 Declaration, meanwhile, emphasized the need for $5.8-5.9 trillion in the pre-2030 period for developing countries to implement their NDCs. The UNFCCC puts this estimate at $6 trillion by 2030. Putting climate finance in context has been a story of too little and very late so far.

“India will be aggressive on finance at COP28, wanting to see the developed countries enhance their contribution," said Rashmi. Mobilising international finance from all sources—government, private, public—and evolving a mechanism to do so will be key, he added.

Kelkar highlighted that the phase-down of coal in India will mandate a shift in global finance. “Fossil fuels are being used since subsidies are in place in many cases. There should be a shift in global finance from supporting fossil fuels to supporting renewable energy in a much bigger way. The faster you can scale up renewable energy, including the investment needed for storage and strengthen the grid to transmit it, the faster dependence on fossil fuels can be reduced," she said. The new quantified goal on climate finance will be part of the effort, Kelkar added.

There is no dearth of financial capital, pointed out Garg. “But somehow the flow is not happening, and if it happens it does so at much higher interest rates particularly in the backdrop of the Russia-Ukraine situation," she said. The Multilateral Development Banks (MDBs), Garg noted, can play a catalytic role through innovative finance mechanisms. “The MDBs taking more risks around newer technologies or on micro, small and medium enterprises, helping them in energy transition, will be key," she said.

COP 28, which will scoop together most of the world in one-of-its-kind climate negotiations in affluent Dubai, came in for criticism from diverse quarters much before it began when it chose Sultan Al-Jaber, UAE minister, but also CEO of the state-owned oil company, to helm it. At the conference, India will be seeking to strike a delicate balance— on the front foot on issues of climate finance and adaptation, and defensive on others.

“India will be vocal on highlighting the vulnerability of developing countries. That is the standard formulation—adaptation needs, getting an agreement on the GGA, and pushing developed countries to raise the scale of their financial contribution," said Rashmi. But on others, such as the L&D fund, it might be defensive. “It will try to protect its turf so that the liability to contribute does not fall on it," he added.

We can. We will. That is the attitude we need to bring to COP 28, stressed Simon Stiell, executive secretary, UNFCCC, in his address at New York Climate Week in September. But with each new report a red flag on goals missed and measures falling short, parties at COP28 would try to delicately balance interests and responsibilities and slap out a consensus.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
more

topics

MINT SPECIALS

Switch to the Mint app for fast and personalized news - Get App