COP28 concludes with a commitment to ‘transition away’ from fossil fuels in landmark global stocktake report
For the first time in COP history, the international community secured an explicit commitment to ‘transition away’ from fossil fuels as a necessary part of reaching net zero by 2050. While not the ‘phase out’ that many had advocated for, the final language still firmly called for a decrease in the usage and extraction of fossil fuels.
The document marks the first time the term ‘fossil fuels’ was included in a commitment at COP – reflecting a significant shift in international attitudes. While not holding any legal weight, much like the Paris Agreement, the so-called ‘UAE Consensus’ will represent the climate action ‘floor’ by which global stakeholders will judge nations.
However, it remains to be seen whether this will be enough to spur sufficient climate action to avoid catastrophic impacts. A coalition of small island nations criticized the ‘litany of loopholes’ in the final text, as well as the omission of references to climate financing, which is critical for their transition.
Liberia’s government has agreed to give Blue Carbon, a Dubai-based private investment firm, exclusive rights to develop carbon credits on land they claim as their own. The company, founded by Sheikh Ahmed Dalmook al-Maktoum, plans to acquire management rights of millions of hectares of land in Africa, selling emission reductions linked to forest conservation as carbon credits.
In line with the UN’s unfinished international accounting framework for carbon markets, the company would enable countries to shrink their carbon footprint by buying emission reductions from countries rich in biodiversity. The UAE and other countries believe these international carbon markets will be central to future climate solutions.
However, there are concerns about the lack of regulations, with seller countries not being given enough time to develop a natural resource strategy to promote fair trade in carbon credits. The key issues for seller countries include revenue-sharing, land rights, and the potential impact on host countries’ ability to hit their climate targets. Scientists also warn of the broader risk posed by big polluters pumping oil and gas based on purchases from the unregulated credit market.
Under the new leadership of Ajay Banga, the World Bank has made significant changes to address the climate crisis. Banga, who replaced Trump-nominated David Malpass, paused debt and interest payments for countries affected by natural disasters and allocated 45% of its lending to climate-related projects, including renewable energy construction.
The bank is piloting schemes to reduce methane emissions and help poorer countries create accountable carbon credit marketplaces. A loss and damage fund to distribute money to countries that have suffered irreplaceable losses due to climate disasters will also be introduced. These reforms aim to help poorer countries recover from climate disasters while preparing for future calamities.
The World Bank’s new climate financial system has been met with much outside support. But the bank is governed by its shareholders, including the US, China, Germany, France and Japan, and without an agreement to contribute more capital, it will have limited funding for reform.
In the wake of the Global Stocktake which calls for a ‘transition away’ from fossil fuels, many wealthy nations continue to fall short of fulfilling their commitments under the Paris Agreement.
Current data shows action taken by G20 nations is not enough to put them on track for a stable climate future. Even the countries on track to decline most actively in emissions, such as Germany and Japan, are still deemed to be “insufficient” based on Paris Climate Goal timelines.
While it is certainly not impossible for nations to get on track, it would require immediate and substantial policy change to fund new energy sources and decrease emissions throughout their economies.