Significant developments in the early stages of COP28

It has been five days since this year’s UN Climate Change Conference, the 28th Conference of the Parties (COP28) kicked off in Dubai. While negotiations on many key issues including the Global Stocktake and carbon markets under Article 6 of the Paris Agreement are still in early stages, there have already been some significant developments, including Parties adopting a decision to operationalise the Loss and Damage Fund.

Meanwhile, Australia has announced its support for a number of initiatives launched at the Conference to support renewable energy and energy efficiency, climate resilience of food systems and agriculture, and health.

So far, COP28 has also seen a number of developments with respect to decarbonisation of the oil and gas sector and efforts to reduce methane emissions. Carbon credit integrity has again emerged as a key discussion point, with crediting standards and organisations launching initiatives to help bolster support for the voluntary market.

Parties agree to operationalise the Loss and Damage Fund

On the first day of the Conference, the Conference of the Parties (COP) and Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA) adopted draft decisions to operationalise the Loss and Damage Fund with the understanding that the Secretariat will revise the decisions to incorporate all contributions to the fund that are announced during COP28. This is considered a significant milestone in the negotiations, as the Loss and Damage Fund will provide much needed financial assistance to developing nations suffering from adverse climate change impacts.

The Loss and Damage Fund has already secured approximately USD$655.9 million. Substantial pledges made by the Parties so far include the:

• €100 million pledge made by France;
• €100 million pledge made by Italy;
• USD$100 million pledge made by the UAE;
• USD$100 million pledge made by Germany; and
• GBP£40 million pledged by the UK.

The Natural Resources Defense Council has created a COP28 Climate Funds Pledge Tracker to show the total pledges made to the Loss and Damage Fund and how it compares to other climate related funds established in recent years.

Though there have been calls for Australia to make a substantial contribution to the Loss and Damage fund, Australia is yet to pledge any contribution. The Minister for Climate Change and Energy of Australia, Minister Bowen, will be in Dubai this week and it is anticipated that he will provide comments regarding the Loss and Damage Fund on behalf of Australia.

Australia supports key initiatives in renewable energy, food systems, and health

Leaders Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action

On 1 December, the COP28 Presidency announced that 134 countries representing over 75% of total emissions from the global food system – including Australia, China, the US and UK –  signed the ‘Emirates COP28 Leaders Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action’.

Signatories declared their intent to work collaboratively and ambitiously to pursue objectives including (among other things) scaling-up adaptation and resilience activities and responses to reduce the vulnerability of farmers and other food producers to the impacts of climate change; strengthening the integrated management of water in agriculture and food systems; and maximising the climate and environmental benefits associated with agriculture and food systems by conserving, protecting and restoring land and natural ecosystems, enhancing soil health and biodiversity, and shifting from higher greenhouse gas-emitting practices to more sustainable production and consumption approaches.

Signatories to the Declaration commit to expediting the integration of agriculture and food systems into their climate action while mainstreaming climate action across their policy agendas and actions related to agriculture and food systems. Importantly, this includes integrating agriculture and food systems into Nationally Determined Contributions (NDCs) by 2025.

The Declaration has been welcomed as a historic milestone, being the first-ever leaders’ level declaration on food systems and climate at a COP, highlighting the critical role that food systems and agriculture play in both driving climate change but also in mitigating and adapting to its impacts.

In providing its support for the Declaration, the Australian Government noted that ‘preparing for the devastating impacts of drought is critical for Australian farmers’ and that the Government is working closely with the sector to reduce emissions and ensure Australia’s robust long-term agricultural productivity.

Global Renewables and Energy Efficiency Pledge

On 2 December, the COP28 Presidency announced that over 100 countries – including Australia, the US and Canada – had signed the Global Renewables and Energy Efficiency Pledge, agreeing to triple worldwide installed renewable energy generation capacity to at least 11,000 gigawatts and to double the global average annual rate of energy efficiency improvements from around 2% to more than 4% each year until 2030.

The Australian Government’s plan to achieve 82% renewables across the national energy system by 2030, and initiatives to support renewable generation in Australia such as the proposed capacity investment scheme, along with the Hydrogen Headstart program are as seen as important domestic contributions towards these goals.

COP28 UAE Climate and Health Declaration

Also on 2 December, the COP28 Presidency, in partnership with the World Health Organization and UAE Ministry of Health and Prevention, unveiled the ‘COP28 UAE Declaration on Climate and Health’, in recognition of the negative impacts of climate change on health. The Declaration has been endorsed by over 120 countries, including Australia.

Signatories to the Declaration commit to pursue objectives including (among others) strengthening the development and implementation of policies that maximise the health gains from mitigation and adaptation actions and prevent worsening health impacts from climate change; improving the ability of health systems to anticipate, and implement adaptation interventions against, climate-sensitive disease and health risks; promoting steps to curb emissions and reduce waste in the health sector; and encouraging the scaling up of investments in climate and health from a variety of sources.

The following day, Assistant Minister for Health and Aged Care Ged Kearney launched Australia’s first ‘National Health and Climate Strategy’ at COP28. The Strategy outlines priorities for the next five years to address the health and wellbeing impacts of climate change, and sets out actions which are aimed at building healthy, climate-resilient communities, and a climate-resilient, high quality net zero national health system.

Governments and oil and gas companies enhance efforts to cut methane emissions

COP28 has also seen key developments with respect to reducing methane emissions and decarbonising the oil and gas sector.

On 2 December, the US Environmental Protection Agency announced a final rule that is expected to sharply reduce methane emissions from oil and gas operations. The rule includes standards to reduce methane and volatile organic compounds from new, modified, and reconstructed sources, and also includes emissions guidelines for states to follow as they develop plans to limit methane emissions from existing sources.

Yesterday’s COP28 Global Methane Pledge Ministerial saw Ministers welcome a number of further national actions and grant funding initiatives aimed at delivering on the Global Methane Pledge goal of cutting methane by at least 30% by 2030.

In an important development over the weekend, the COP28 Presidency and Kingdom of Saudi Arabia launched the ‘Oil and Gas Decarbonisation Charter’, which so far has garnered the support of at least 50 oil and gas corporations from across the globe. Signatories to the Charter commit to net-zero operations by 2050 at the latest, ending routine flaring by 2030, and achieving ‘near-zero’ upstream methane emissions. Among other things, signatories also agree to:

• invest in renewables, low-carbon fuels and negative emissions technologies;
• increase transparency with respect to reporting on their greenhouse gas emissions and progress in reducing emissions;
• increase their alignment with broader industry best practices to accelerate decarbonization of operations, aspiring to implement current best practices by 2030 to collectively reduce emission intensity; and
• provide secure and affordable energy to support the development of all economies.

Woodside Energy is reported to be the only Australian signatory to the Charter at the moment, and it remains to be seen whether the Charter will be taken up by other firms over coming months.

Voluntary carbon market: organisations collaborate to bolster market integrity

On Monday, six of the world’s major independent crediting standards including Gold Standard and Verra’s ‘Verified Carbon Standard’ announced their intention to collaborate on common principles for quantifying and accounting for removals and emissions reductions. As part of this collaboration, the standards will implement a framework to (among other things) learn from each other’s best practices to increase support for carbon projects; improve transparency around the use of carbon credits; and create  indicators to promote community benefits of projects.

On the same day, six organisations involved in different phases of corporate decarbonisation journeys, including the Science Based Targets initiative (SBTi), Climate Disclosure Project (CDP) and Voluntary Carbon Markets Integrity Initiative (VCMI), published an animation and infographic to demonstrate how each of them play complementary roles in supporting ambitious climate action. The aim of these resources is to help corporates understand which organisations they should work with when decarbonizing their operations and value chains, and addressing remaining emissions with high-integrity carbon credits.

According to some commentators, this development could help to unlock voluntary corporate demand for carbon credits.

What’s next for COP28?

We expect to see important developments over coming days as Parties continue negotiations on key issues, including the Glasgow–Sharm el-Sheikh Work Programme on the Global Goal on Adaptation, Work Programme on Just Transition Pathways and Article 6 markets.

Keep an eye on our website for updates, or contact our team to learn more.