At the end of November, thousands of business representatives, civil society advocates, diplomats, and politicians will descend on Dubai to show up for the 28th annual Conference of the Parties (COP) held by the United Nations Framework Convention on Climate Change (UNFCCC). COP28 will convene at a unique and historic moment—we just experienced the hottest year ever recorded. So far in 2023, we’ve seen 24 separate $1 billion weather events in the United States alone—many amplified by our current climate reality. COP28 also marks the definitive end to the first Global Stocktake (more on that below)—that means we will officially have a clear picture of whether actual emissions reductions are meeting global climate pledges.
When and where is COP28?
Over 100 country delegations and 70 government ministers and secretaries, UNFCCC Observers, NGOs, journalists, and business groups will attend COP28 at Expo City in Dubai, United Arab Emirates (UAE) from November 30—December 12, 2023. This will be the first COP held in the UAE, and potentially one of our last chances to keep the 1.5°C dream alive.
Who is attending and advocating at COP28?
World leaders, including President Biden, Pope Francis, and King Charles, will be attending COP28 in Dubai. Pope Francis will be the first pontiff ever to attend a COP. King Charles, known for his environmental and climate policy interests, will give policymakers opening remarks. The Organization of the Petroleum Exporting Countries (OPEC) will also attend COP28. Fossil fuel is one of the limited sectors that will benefit from a deficient COP28. Oil interests will likely advocate for a longer phase-out of fossil fuels or a future where fossils cohabitate with renewable energy sources long term. In either case, we should expect oil advocates to push for more government funding for carbon capture technologies. These technologies are limited in their present use, are costly, and require a large amount of energy to operate, though some nations, like Iceland, have been able to utilize natural geothermal energy to power the systems.
The majority of business sectors will benefit from a stable climate and a green economic transition like agriculture, manufacturing, and fisheries, to name a few. This is why many other businesses call for a severe phase-out of fossil fuels and decarbonization pathways at COP28. Over 131 companies representing a collective $1 trillion in global revenue are calling for governments to stop burning fossil fuels via the We Mean Business Fossil to Clean campaign. In all, it’s estimated that 70,000 people will be at Expo City in Dubai.
What’s a COP? And what’s happened since the Paris Agreement?
COPs allow world governments to come together to address the climate crisis, including emissions reduction targets, climate policies surrounding loss and damage, and climate mitigation and adaptation.
In the last 29 years, there have been some big moments at specific COPs. To date, 2015’s COP21 in Paris has been the most pivotal, setting us on the current course to reduce greenhouse gas emissions. It established the Paris Agreement, a binding international treaty requiring nations to submit their voluntary Nationally Determined Contributions (NDCs) toward emissions reductions. These NDCs are chosen by nations and submitted to the COP process. These collective NDCs are assessed against global emissions every five years to see if the agenda meets the climate reality, known as the Global Stocktake. The first Global Stocktake will conclude at COP28. At Paris, developed countries agreed to expand international and national climate finance efforts to reach $100 billion annually by 2020.
At COP26 in Glasgow, countries had to officially submit their NDC action plans. Countries also agreed to limit global warming to 1.5°C above pre-industrial levels. At Glasgow, nations declared the 2020s as the “decade of action,” and pushed for a phase-out of fossil fuel subsidies. This was the first time such a phase-out was included in a COP outcome. For some harrowing perspective, global fossil fuel subsidies in 2020 were $5.9 trillion, or 6.8% of global GDP. In 2022, fossil fuel subsidies hit $7 trillion, or 7.1% of GDP. The International Monetary Fund (IMF) estimates that these subsidies will continue to increase despite our climate reality and the decreasing price of renewable alternatives.
Last year’s conference, COP27 in Egypt, had mixed results. There were two major outcomes: a reaffirmation of the 1.5°C target, and, for the first time, a fund created via the COP process specifically to help developing countries with loss and damage. The World Bank has been given the responsibility to manage these funds, granting developing countries a seat on the board. The architecture of this new funding system is still being laid out, but we could see more details come out of COP28.
Oil or the planet: How will the UAE deal with COP28 as host country?
The UAE is the eighth-largest producer of petroleum on the planet and OPEC member. It has produced 2.9 billion barrels per day of oil on average from 2013–2022. COP President Sultan al-Jaber is currently in charge of the state oil company, Abu Dhabi National Oil Company (ANDOC). However, before ANDOC, he spent two decades working on renewable energy in the UAE. That said, there has been considerable controversy surrounding the ability of Sultan al-Jaber to achieve the stated goals of COP28, given the strong role of oil in the UAE.
In the last couple of decades, the UAE has endeavored to diversify its economy, far exceeding other OPEC nations. Non-oil sectors account for 70% of UAE’s GDP. While there is an effort to diversify, the UAE just announced $150 billion to expand oil development over a five-year period. Compare that with their recently launched $54 billion seven-year plan to expand renewables.
The UAE also has a problematic history regarding civil and political rights. Many national advocates have been imprisoned for protesting, and many of Dubai’s residents are immigrants who are forced to work under harsh conditions. The government will likely stymie civil society engagement at COP28, ultimately limiting the full potential to increase ambition and encourage more robust targets and pledges.
The urgency for serious climate action is what makes COP28 unique
Based on projections, we are currently on track for 2.5°C of warming by 2100. COP28 is happening at a unique nexus—at the end of our first Global Stocktake, on the heels of various Intergovernmental Panel on Climate Change (IPCC) report series, all telling us we need to do more, and during the world’s hottest year ever recorded. There is clearly a lot at stake.
The Global Stocktake, which will conclude at COP28, marks the end of a five-year process that measures global mitigation, finance, and adaptation. It does not assess nations’ individual progress but looks at all countries’ collective actions. The Global Stocktake utilizes various IPCC reports, other UN and country reports, and other stakeholder reports from civil society and business groups—all to assess where our emissions and the impacts of climate change are today.
In the final outcome (happening at COP28) a political course of action will be decided based on the Global Stocktake assessments. Following the outcomes of the Global Stocktake, the intention is for countries to ratchet up their emissions reduction targets via their Nationally Determined Contributions (NDCs). Nations will then have two years to submit their updated NDCs at COP30. The outcomes here are vital for the legitimacy and success of the COP process, particularly the novel voluntary and binding structure of the Paris Agreement.
Everyone will soon have more clarity about how collective NDCs have measured against actual activities, and we will have a political course of action to follow. We will know if we can keep the 1.5°C target alive and if more drastic policy actions are needed to ratchet up net-zero targets and decarbonization pathways—including increased mandatory sustainability reporting criteria.
What are the goals of COP28?
Whichever nation is hosting a COP elects a COP President who sets the agenda for every COP. In the lead-up to COP28, COP President Sultan al-Jaber, has been pushing for increased ambition in various arenas. Recently, he called for nations to cut emissions by 43% over the next seven years to achieve the 1.5°C climate target. He has also called for nations to agree to reach net-zero emissions by 2050. This is all in addition to calling on nations to endorse a climate and health agenda and improved adaptation finance for developing countries.
In continuing and expanding the narrative from previous COPs, COP28 has some unique goals. Namely, the integration of an energy system transformation. The majority of previous COPs since Paris have been concerned with boosting pledges and amplifying climate action, which finally led to the inclusion of a loss and damage fund. This COP will likely tell us more about those funds while starting an honest conversation about our global energy transition.
- Fast-tracking energy transition: an energy system free from unabated fossil fuels by 2050. This will require tripling current levels of renewable energy and doubling energy efficiency investments by 2030.
- Finance: delivering on existing pledges and responding to the reality that developing countries need an estimated $2.4T in annual climate-focused investments by 2030.
- Nature and people: centered around adaptation, climate resilience, and loss and damage.
- Inclusion: make this the “most inclusive COP” by including state and non-state actors at all levels.
What will COP28 mean for business?
On the one hand, COP President al-Jaber has been encouraging increased ambition and climate action; on the other is the reality that oil and fossil fuel interests will likely play a large role at COP28. There will likely be a push to utilize carbon capture and storage and continue to use fossil fuels despite the other sustainability and environmental costs of producing fossil fuels. We can undoubtedly predict that there will be a lot of background noise surrounding big oil.
The thing to watch will be the outcome of the Global Stocktake. The business world will get a clear signal if targets meet actual emissions. This could ramp up emissions-reducing policies globally and nationally, including scope 3 reporting. It’s also worth noting that many sustainability reporting criteria are already underway. The EU’s first year of CSRD reporting, the phase-in of new ISSB IFRS disclosures, recent California climate bills, and the proposed U.S. SEC climate disclosures rules are all underway, and all require a mix of scope 1-3 reporting. No matter how the stocktake goes, businesses should anticipate more sustainability reporting criteria on the horizon as governments attempt to align emissions reduction targets with tangible solutions.
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