Other critical tasks facing negotiators in Dubai include getting the loss and damage fund (established at COP27) to help the hardest hit countries to rebuild communities and restore ecosystems and agreeing on a framework for the Paris Agreement’s global goal on adaptation.
Issues that are likely to receive much attention, and which may be reflected across several negotiating streams, include energy transition and food systems transformation. As is often the case, discussions and negotiations on how to finance the climate transition are likely to take centre stage.
Inequality is at the heart of the matter
At the core of all of this are the matters of international solidarity and phasing out of vested interests.
30% of the global population lives in areas that might become unhabitable in the coming decades. While suffering the most from climate change, they emit the least, because it is - generally speaking - also the poorest part of the world’s population.
Half of the poorest people in the world are responsible for only 7% of the carbon emission, while the top 10% of the richest individuals are responsible for 50% of all emissions, according to a new Oxfam-Novib report. On top of that, the poorest people usually live in the most vulnerable areas.
According to Triodos Bank, this needs to be solved at COP28. It is about phasing out fossil fuels, a meaningful loss and damage fund, and about climate finance.
A treaty for phasing out fossil fuels
Fossil fuels – coal, oil and gas – are the main drivers of the climate crisis. Yet they are not mentioned once in the Paris Agreement. Ending new exploration and expansion and phasing-out fossil fuel production is critical over the next decade to keep the world in line with global climate goals and to avoid catastrophic climate disruption. Just recently, the UNEP Production Gap Report 2023 warned that fossil fuel extraction plans are undermining the world’s chances of meeting our global climate targets. This aspect is of utmost importance at this juncture.
A significant part of the private sector has, in recent years, committed to contributing to climate mitigation. Nevertheless, the action taken thus far remains insufficient. The world’s 60 biggest banks have pumped $5.5 trillion into the fossil fuel industry since the Paris Agreement, according to the Banking on Climate Chaos Report. This is in stark contrast with what we need. The paramount focus should be on the imperative task of phasing out fossil fuel finance, specifically discontinuing support for new exploration.
The efforts of governments, the financial sector and businesses must intensify; a mere pledge is insufficient. Carbon prices, regulation, phasing out of fossil fuel subsidies and transparency can speed up this transition. Furthermore, Triodos Bank calls for governments to support a legally binding, international Fossil Fuel Non-Proliferation Treaty and advocate in favour of such treaty at the COP28. We believe that a Fossil Fuel Non-Proliferation Treaty is the missing legal mechanism to close the gap between net zero ambitions and actually achieving them. It creates a clear pathway, the right incentives and a level playing field for businesses to move away from fossil fuels. True impact lies in concrete actions rather than mere commitments.
Finance needed for mitigation and adaptation
More than in previous COPs, the agenda is about both climate mitigation and adaptation and the financing needed to get things done. With rising climate damage and increasing risks of reaching tipping points in ecosystems, more attention to adaptation is needed for a just transition, especially since these risks are foremost in emerging countries.
A lot of capital is needed for both and this must come from public and private sources. Often, discussions are about the financing gaps, calculating that billions or even trillions are missing. However, the actual ‘gap’ as reported by numerous reports is a fictious number: it is a combination of capital going the wrong way (still financing of fossil fuels, fossil fuel subsidies) and backdated perceptions of risk and returns. This can be solved by better regulation.
In 2009 the wealthiest nations committed to providing $100 billion a year of climate finance support to developing countries in climate mitigation. The latter have long rightfully complained that climate finance is often disbursed in too little amounts, too slowly and too unfairly.
At COP28, wealthy nations will not only be asked to at last meet the $100 billion a year commitment from 2009. They will also have to initiate negotiations on a new annual climate finance target to replace (and increase) the original pledge, which they have promised to do at the latest at the end of 2024.
Furthermore, at COP27, an important result was the creation of a loss and damage fund, complemented by a 'transitional committee' for operationalisation. Consensus reached in November 2023 paves the way for COP28 approval, but challenges remain. Ambiguity persists regarding which developing countries that are hit hardest by climate change can receive financial support, with a proposed resource allocation system lacking specific examples.
Developed nations are urged to lead in financing, leaving others to contribute voluntarily. This compromise, a result of disputes, particularly with the US, emphasizes cooperation without acknowledging liability or compensation, sparking contention with developing countries over historical emissions.
Just transitions globally and nationally
What is important globally, is also important in rich countries. Climate policies can only succeed if they are inclusive: this implies that the bill of climate change should be shared (more than) equally over the population. Those that pollute more have more wealth, so they should pay more.
We cannot permit any more delay on this. The costs would become even higher and tipping points in the climate crisis will be reached more frequently. It is time the world agrees to inclusive action, before it is too late.