Key issues to watch at COP28
The three key topics on the agenda of COP28 include emissions reduction, adaptation to climate change and climate finance. In my opinion, what is highly important in COP is that the first-ever global stocktake of commitments is now taking place. Out of all the countries, only 36 have submitted their updated commitments, leaving 159 countries yet to do so.
Looking at the recent report* by the UN secretariat, my key takeaway is that the world is not on track to meeting the Paris Agreement’s goals. Global ambition has stagnated over the past year and national climate plans are strikingly misaligned with the science. Against a 2019 baseline, emissions are projected to peak in the 2020s and fall only 2% by 2030. According to scientists, the world needs to reduce emissions by 43% from 2019 by 2030 to limit global warming to 1.5 C.
The burning and diverging issue is the phaseout of fossil fuels and the use of carbon capture and storage technologies. The EU’s recently adopted COP28 mandate is calling for a global phaseout of ’unabated’ fossil fuels well ahead of 2050, a derogation that leaves open the possibility for countries to keep burning coal, gas, and oil if they use carbon capture technology. Some other regions highlight the need for fossil fuels ‘for the foreseeable future’. G20 countries appear keener to promote an acceleration in renewables than a phasing down in fossil fuels, pledging to triple global renewable energy capacity by 2030.
The situation is not made easier by the fact that COP28 is hosted by the Government of the United Arab Emirates, a country with huge oil and gas reserves.
*Nationally determined contributions under the Paris Agreement. Synthesis Report by the UN Secretariat. November 14, 2023.
Businesses asking for predictability and political leadership
The business sector is taking action and working towards a clean energy transition, but it alone cannot make the transition. We increasingly need coordinated action from governments and politicians to set the enabling conditions, policies and regulations for a just and clean energy transition.
This has recently been highlighted, for example, in the ‘Fossil to Clean’ initiative by We Mean Business. We at Fortum have joined this initiative with more than 130 companies in support of this initiative towards global policymakers attending COP28. The signatories, representing nearly USD 1 trillion in global annual revenue, are asking for predictability and policy certainty that will allow businesses to develop affordable and reliable near-term alternatives to fossil fuels for their operations and supply chains.
Fossil to Clean signatories also call on ensuring clear pricing signals through a meaningful price on carbon that reflects the full costs of climate change. For us at Fortum, carbon pricing has long been a priority instrument in mitigating climate change and we are involved for example in the global Call on Carbon Initiative. Currently, 23% of global emissions are covered by carbon pricing.
Latest WEO offers hope for the energy transition
According to the IEA’s fresh World Energy Outlook (WEO2023), the energy crisis triggered by the Russian invasion of Ukraine is a turning point in the energy transition. The IEA estimates that use of all fossil fuels, including oil, will peak in the 2020s. Investments in clean energy will trigger a downward trend in global emissions, but that is not enough to meet the 1.5 °C goal. With current policies the global average temperature will rise 2.4 °C;, and with the new commitments announced so far, the temperature rise will be 1.7 °C.
We do, however, have all the tools to move faster. According to the IEA’s Net Zero Roadmap**, three key actions provide 80% of the emissions reductions to put the energy sector on the 1.5 °C pathway; 1) tripling the installed capacity of renewables, 2) doubling the energy efficiency improvements, and 3) reducing methane emissions from fossil fuel operations by 75% by 2030.
**IEA Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach – 2023 Update
So, what to expect?
I have been following the global COP process since 2009 and have participated in several COP meetings. This time, I will be participating in the Eurelectric delegation to the conference in Dubai. Patience has been key along this journey, as global progress often moves in small, yet meaningful steps. But the pace of progress must be stepped up; otherwise, we will run out of time.
While the science is clear, we unfortunately, lack the global leadership to shift from fossil fuels to clean energy, especially in the current global political climate. There is no clear thought leader in climate policy, although the EU is attempting to take on this role. However, the recent deal (November 14) between China and the US offers some new momentum for COP negotiations. In this deal, China has agreed to reduce greenhouse gas emissions from the power sector within this decade and to include all non-carbon dioxide greenhouse gases in its climate action plan by 2035.
There is a saying that a pessimist is never disappointed, but I’m afraid that the current geopolitical landscape casts a shadow over the prospects of a significant breakthrough in phasing out fossil fuels. Yet, I am hopeful. COP28 represents more than just a summit; it's a moment of truth for our global efforts on climate. So, let's approach COP28 not only with caution, but also with a determined hope that progress is not only necessary, it’s also possible.
