COP28 takes a step towards a future with less fossil fuels

In recent weeks, the world watched the developments taking place at COP28 in Dubai. As has been the case practically every year since 1995, the climate summit was held with the aim of finding global and consensual solutions to global warming. And important steps have been taken to achieve this.

COP28 began with the achievement of an agreement on financing and ended with another historic breakthrough: for the first time, reference is made to the need to abandon fossil fuels in order to bring an end to climate change. This may determine the nature of global climate action and the direction of investment and business around the world over the next decade.

What was expected of this COP?

COPs, also known as climate summits, are the central part of the United Nations Climate Change Conferences. These meetings discuss what actions need to be taken to curb climate change and adapt to the consequences that are already being felt around the globe.

This year, COP28 was held in Dubai (United Arab Emirates). This presented numerous challenges and generated intense controversy: the United Arab Emirates is the seventh largest oil-producing power in the world and derives about 30% of its revenues from oil and gas. In addition, the chairman of the summit, Sultan Al Jaber, is CEO of Abu Dhabi’s national oil company.

Meanwhile, oil industry representatives insisted on sharing their vision of the future of energy. Even so, this did not prevent significant progress from being made in other directions. Among others, two main points stand out: that the loss and damage compensation fund, agreed at the previous summit, be given more defined structure, and that reference finally be made to the need to abandon fossil fuels. Both objectives were achieved, though perhaps not with the level of ambition desired by some countries, organizations and environmental activists.

COP28 was also the stage to assess for the first time progress made towards achieving the objectives of the Paris Agreement since its signing in 2016. That is, to evaluate what has been done to limit the rise in global temperature to 2°C, and as close as possible to 1.5°C, taking as reference the average temperature before the Industrial Revolution.

The loss and damage fund unanimously approved

The first good news of the summit came shortly after its opening. The Loss and Damage Fund, which seeks to compensate the most vulnerable countries for the impacts of climate change, was unanimously approved.

In other words, the countries that have contributed (and continue to contribute) most to climate change with their emissions should compensate those on the other side of the scale. The poorest countries suffer the most from global warming, even though they have contributed the least to it with their emissions.

This fund was a pending issue. It had been approved at COP27, but had not been developed and the fine print had not been put on the table. This year, it was agreed that the World Bank will host the new fund for its first four years, with representation from both the global North and South.

At the end of the summit, $712 billion had been contributed. This is a small figure, which is insufficient to fulfil the fund’s objectives, but which also represents progress with respect to where we were at just a few months ago.

Fossil fuels, at the heart of the debate

Another of the most important points of agreement to be struck at this COP was the so-called Global Stocktake. The final COP agreement includes for the first time a clear reference to the need, backed by science, to move away from oil, gas and coal in order to reduce greenhouse gas emissions and limit climate change.

This had been a goal at previous summits, but had not been put down on paper, with previous COPs limited to expressing the need to reduce emissions to limit warming. However, there was no explicit reference to the main mechanism driving these emissions: the burning of fossil fuels.

The Global Stocktake calls for a transition away from oil, gas and coal to achieve net zero emissions by 2050, and to promote renewable energies. We must not forget that while these are non-binding objectives, they can help determine the roadmaps of politicians, business and investors in the coming years.

The challenges of the next COP

COP28 ended with other agreements. For example, developed countries were reminded of the need to provide 100,000 dollars a year for climate action in developing states between 2020 and 2025 (a target that has so far not been met).

Similarly, other negotiations did not lead to consensus. Many climate debates were left aside to be resumed at COP29, scheduled in Azerbaijan. It will be necessary to wait to see what new steps are taken to curb climate change.

Until then, action remains in the hands of governments, business, investors and all those agents who have the ability to change course with their decisions.