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COP28 Round-up: Climate coalitions, debt clauses and a new net zero policy task force

COP28 UAE logo (Rafiq Maqbool/AP Photo)
(Photo: Rafiq Maqbool/AP Photo)

The latest news from the 2023 UN climate conference in Dubai

The World Climate Action Summit held on Friday and Saturday congregated heads of state and government representatives, which saw speeches from UK King Charles III, President Luiz Inácio Lula da Silva from Brazil, and Indian Prime Minister Narendra Modi, among others.

On Friday December 1, the COP28 presidency launched the Coalition for High Ambition Multilevel Partnerships for Climate Action, to improve collaboration between sub-national governments on the implementation of national climate goals. The initiative, dedicated to local-level climate action and alignment, was endorsed by more than 60 countries. Cities and urban areas account for a majority of carbon emissions emitted on the planet.

Italy’s prime minister, Giorgia Meloni, pledged €100mn to the loss and damage fund and France’s president, Emmanuel Macron, also stated that his country would contribute up to €100mn to the fund dedicated to helping the most vulnerable countries cope with the worst impacts of climate change. The Netherlands, Canada and Spain also announced smaller contributions to the fund.

Several UN agencies, multilateral development banks, the Glasgow Financial Alliance for Net Zero and the International Sustainability Standards Board are among the founding members of the Global Capacity Building Coalition launched at COP28. The aim of the coalition is to enhance “finance technical assistance programs” for financial group operating in emerging markets, such as transition plans and disclosure frameworks.

The World Bank is set to distribute 45 per cent of its yearly financing budget to climate projects by 2025, president Ajay Banga said at COP28. The World Bank is also expanding its “climate resilient debt clauses”, whereby, in addition to halting the main loan repayments, it would also pause debt interest payments for the most vulnerable countries in case of a climate disaster. During a discussion on Monday December 4, the president of the European Bank for Reconstruction and Development, Odile Renaud-Basso, announced that from 2024, the multilateral lender will add a clause to new loans agreements with sovereign and municipal clients allowing the deferral of payments by two years in the case of natural disasters.

In energy news, Turkmenistan has joined the Global Methane Pledge, launched at COP26 in Glasgow, which aims to reduce methane emissions by 30 per cent by 2030, from 2020 levels. The country is considered one the largest emitters of methane globally. Meanwhile, Japan’s prime minister, Fumio Kishida, has pledged to end the construction of domestic coal power plants that do not have emissions reduction measures. The move is in line with the country’s G7 counterparts.

Also on December 1, the COP28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems and Climate Action was signed by 134 countries, covering 70 per cent of the world’s land. The signatories committed to integrating food and agriculture into their national climate plans by 2025. Countries with high food-related emissions, such as Brazil, China and the US, signed the declaration. The success of the initiative will largely depend on “whether countries follow through on these commitments with substantial policy reforms”, said Ani Dasgupta, president and chief executive of research non-profit World Resources Institute.

Further, the Bill & Melinda Gates Foundation and the United Arab Emirates announced they are each contributing $100mn to assist small farmers in sub-Saharan Africa and South Asia adapt to climate change.

The Bezos Earth Fund announced $57mn in grants for food solutions “to tackle the dual threats of climate change and biodiversity loss”. The grants will fund initiatives such as combatting methane emissions in livestock and limiting deforestation in the Amazon.

The World Economic Forum launched a First Movers Coalition for Food to create market demand for low-emission agricultural commodities. The coalition, which comprises the UAE and major food companies such as Danone and Nestlé, aims to generate a procurement value for low-carbon commodities of $10bn-$20bn by 2030.

 

On Saturday December 2, the Industrial Transition Accelerator was launched by the COP28 presidency, the UN and Bloomberg Philanthropies to speed up the decarbonisation process of heavy-emitting industries, such as energy, industrial and transportation. Backed by $30mn in funding, the initiative will promote projects that are aligned with 1.5C pathways as determined by the International Energy Agency.

Also on Saturday, the Green Climate Fund gathered new funding pledges by Switzerland, Portugal, Estonia and the US. The latter has pledged $3bn, although it first needs to get approval from Congress, which has previously blocked the full disbursement of funds pledged to the GCF. The UN-backed fund is the world’s largest climate fund dedicated to decarbonisation projects.

In energy news, the Global Renewables and Energy Efficiency Pledge was signed by 116 countries, committing to tripling global renewable energy generation capacity and double the annual rate of energy efficiency by 2030. India reportedly came out in favour of tripling renewable energy by 2030 on Friday, but failed to sign the pledge on Saturday.

Further, the COP28 presidency launched the Oil and Gas Decarbonization Charter, which will demand oil and gas producers to cut all emissions from their own operations by 2050. It also asks to achieve “near-zero upstream” methane emissions and stop routine flaring by 2030. However, the charter does not include any targets on Scope 3, which is the main source of emissions generation for oil and gas producers. A total of 50 companies, among which ExxonMobil, Shell, TotalEnergies and BP — representing less than half of global oil production — have signed up to the charter. Environmental groups have criticised the initiative as amounting to greenwashing in an open letter.

The US Environmental Protection Agency announced it has finalised rules to reduce methane emissions from the oil and gas industry, while US Special Envoy John Kerry declared that the US will join the Powering Past Coal Alliance, committing to phasing out existing plants and not building any new ones. Japan also announced at COP28 that it would stop building unabated coal power plants, but has fallen short of committing to phasing out coal entirely.

Colombia endorsed an international treaty to end the development of new fossil fuel projects, the largest fossil fuel producer to have joined the initiative spearheaded by a small group of Small Island States.

Twenty-two countries, among which France, the US and Japan, have signed a pledge to collectively triple their nuclear energy capacity by 2050, from 2023 levels. According to the announcement, the countries recognise that “decreasing nuclear power would make reaching net zero more difficult and costly”.

 

On Sunday December 3, COP28 president Sultan al-Jaber once again came under scrutiny for comments he made during a November online forum, where he stated that “there is no science out there, or no scenario out there, that says that the phase-out of fossil fuel is what’s going to achieve 1.5C”, as The Guardian reported.

Former US vice-president Al Gore’s Climate Trace firm announced a new emissions-tracking tool for supply chains. The announcement claims that “the majority of corporate emissions worldwide that are included in the Climate TRACE inventory are still not included in self-reported ESG database”. The company makes use of satellite data and “other forms of remote sensing”.

Also on Sunday, the Monetary Authority of Singapore, the International Finance Corporation, new philanthropic group Allied Climate Partners, and investment company Temasek signed a memorandum of understanding to create a “green investments partnership” to overcome the funding gap in the region’s sustainable infrastructure financing needs. The aim is to deploy blended finance transactions to a diverse pipeline of investments, focusing at first on south east Asia.

The International Financial Reporting Standards Foundation and Principles for Responsible Investment are among the founding members of the Taskforce on Net Zero Policy, launched at COP28. The aim of the task force is to align global policymaking and regulation with net zero commitments and ensure these are the foundations of non-state actors’ net zero commitments.

A service from the Financial Times