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With less than two months left until COP29 kicks off in Azerbaijan, it’s time for a refresher course on where we left off at COP28. Following two weeks of negotiations that ran into overtime, the representatives of the 198 participating countries at COP28 signed the final document of the Global Stocktake (pdf).
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There was some opposition: One of the provisions disclosed that “transitional fuels can play a role in facilitating the energy transition,” giving a green light to natural gas expansion, despite its damaging environmental impacts that some studies have identified can be as harmful as coal. Critics viewed the provision — along with the call to accelerate carbon capture — as evidence of “the influence of petrostates in the half measures and loopholes included in the final agreement,” US vice president Al Gore said at the time. “The resolution is marred by loopholes that offer the fossil fuel industry numerous escape routes, relying on unproven, unsafe technologies,” the Climate Action Network echoed the sentiment.
REMEMBER- The final draft included eight actions to reach the 1.5C goal including:
- Tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030;
- Rapidly phasing down unabated coal and limitations on permitting new and unabated coal power generation;
- Accelerating zero and low emissions technologies, including, inter alia, renewables, nuclear, abatement and removal technologies, including such as carbon capture and utilization and storage, and low carbon hydrogen production, so as to enhance efforts towards substitution of unabated fossil fuels in energy systems.
- Reducing both consumption and production of fossil fuels, in a just, orderly and equitable manner so as to achieve net zero by, before, or around 2050 in keeping with the science;
- Accelerating emissions reductions from road transport through a range of pathways, including the development of infrastructure and rapid deployment of zero and low-emission vehicles.
CLIMATE FINANCE-
The loss and damage fund was launched: Some 200 countries signed off on operationalizing the loss and damage fund established at COP27. The fund is set up to finance adaptation and mitigation efforts in climate vulnerable countries facing hurricanes, floods, droughts, and rising sea levels. UAE pledged to contribute USD 100 mn into the fund, despite some countries pushing for developed countries to shoulder the responsibility given its historical role in emission production. Germany, the UK, Japan, and the US also made initial contributions, standing at USD 100 mn, GBP 40 (c. USD 51 mn), USD 10 mn, and USD 17.5 mn.
The World Bank increased climate finance target to USD 40 bn by 2025: The World Bank set a target to increase its climate financing capacity to USD 40 bn by 2025 — around USD 9 bn more than what was last recorded by the bank. The new target would increase the bank’s climate-focused financing by 10% reaching 45% of the bank’s total lending volume for FY2024/2025.
The UAE banking sector earmarked over AED 1 tn in climate finance by 2030: The UAE’s National Banks Federation (NBF) — made up of 56 UAE-based lenders — committed to mobilizing AED 1 tn in green funding by the end of the decade to help meet the UAE’s 2050 net-zero target. First Abu Dhabi Bank (FAB) also announced it will lend, invest, and facilitate over AED 500 bn (USD 135 bn) in sustainable and green financing by 2030.
Alterra was born: The UAE launched the USD 30 bn “catalytic climate vehicle” — dubbed Alterra — to improve access to climate funding for the Global South. Backed by Lunate Capital, the financing vehicle will have the USD 25 bn Alterra Acceleration program to direct institutional capital towards climate investments, as well as the USD 5 bn Alterra Transformation program to provide risk mitigation capital and incentivize investment flows into the Global South. The venture aims to mobilize USD 250 bn in green investments by 2030. Since then, Alterra said it is directing an extra USD 200 bn to investments in emerging markets and the global south over the next six years in June.
GREEN POLICY-
116 states committed to the Global Renewables and Energy Efficiency Pledge, vowing to triple global renewable energy generation to 11 TW by 2030. The pledge also includes a commitment by signatories to slash global reliance on fossil fuels, cut financing for coal power plants, reduce methane emissions, and a target to improve energy efficiency by 4% by the end of the decade.
And over 20 countries aimed to triple nuclear energy production: Led by the US, over 20 countries inked a declaration to triple the world’s nuclear energy production by 2050. The declaration — endorsed by countries including France, Britain, Japan, and South Korea — calls for major investments to ramp up the world’s nuclear power capacity which currently stands at 390 GW.
DECARBONIZATION + EMISSION EFFORTS-
COP presidency spearheaded efforts to avert wildfire emissions: Over 56 international organisations and institutions signed the World Fire Emission Reduction Alliance initiative which targets the reduction of carbon emissions resulting from wildfires. The international coalition targets slashing emissions from wildfires worldwide by 80% by 2050 under the umbrella of the International Initiative of Law Enforcement for Climate (I2LEC) by collaborating to enhance firefighting and civil defence systems worldwide.
The EU is allocated EUR 175 mn for methane reduction: The EU vowed to allocate EUR 175 mn to support effective action on methane emission reduction. Some of the funds were earmarked to finance the International Methane Emissions Observatory’s activities including the collection of the data, or research into even better mechanisms to collect emission-related data. The funds will be written off to the US Methane Finance Sprint initiative, which said it aims to mobilize at least USD 200 mn during COP28. This comes two weeks after the bloc approved a provisional law to set methane emission curbs for future oil and gas imports into the bloc.
The UAE released a roadmap for reducing emissions from the cement, iron, steel, and aluminum sectors. The roadmap aims to cut 90 mn tons of carbon dioxide annually and 2.9 gigatons of carbon emissions by 2050 by adopting advanced technologies, and focusing on boosting the growth of the national industrial sector.
FINANCIAL POLICY-
Global finance experts rolled out climate finance roadmap: The UN’s Independent High-Level Expert Group released its Climate Finance Framework (pdf) report outlining the action plans needed to implement the recently released UAE Leaders Declaration on a Global Climate Finance Framework (pdf), and deliver on the Paris Agreement. The report outlines a roadmap to deliver climate funding and address the issues facing emerging markets and developing countries in their implementation of adaptation and mitigation policies.
EIB issued first common principles on nature-positive finance: The European Investment Bank (EIB) and a number of other multilateral development banks (MDBs) issued common principles (pdf) aimed at identifying and tracking investments earmarked for the protection, restoration, and sustainable use of natural resources (dubbed “nature-positive financing”), according to a statement.
France + Japan back AfDB’s SDR proposal: France and Japan announced during the roundtable event on leveraging Special Drawing Rights (SDRs) (watchtime, 13:28, 17:50) that they will support the African Development Bank’s breakthrough facility to leverage SDRs for climate and development. The African Development Bank and the Inter-American Development Bank developed a proposal to channel SDRs to multilateral development banks which SDR-rich countries were expected to support at COP28.
Widening access to concessional finance: The framework called for scaling up EMDCs’ access to concessional funding through improving the special drawing rights (SDRs) allocation system. The IHLEG also highlighted worldwide carbon pricing and taxation of high-emitting sectors as two of the methods to inject liquidity into the concessional finance system, in addition to tapping international philanthropies (including from the corporate sector) to increase their donations for climate action.
AND- Debt clauses garner big support: The UK, France, the World Bank, AfDB, EBRD, and the IDB have announced they will expand the use of climate-resilient debt clauses in their lending that pause debt when countries are hit by natural disasters, according to a statement. The UK also announced the first climate-resilient debt clauses in Africa with Senegal. Seventy-three countries have also called for the adoption of the debt clauses.
