Update 30 November 2023: today, Minister for Climate Change and Energy, Chris Bowen, tabled the Australian Government’s second Annual Climate Change Statement in Parliament, and described Australia’s priorities for COP28 in a speech to Parliament. Read the Statement and the Minister’s speech.
This year’s UN Climate Change Conference, the 28th Conference of the Parties (COP28), will be held from 30 November to 12 December 2023 in Dubai, United Arab Emirates (UAE). Following some of the progress at COP27, including Parties reaching agreement on a global loss and damage fund to provide financial assistance to vulnerable nations suffering from climate change impacts, the UAE Presidency of COP28 (Presidency) has made it clear that COP28 is intended to be an ‘inclusive COP’. The President-Designate of COP28, Dr. Sultan Al Jaber of the UAE, has stated that ‘the COP28 Presidency believes inclusivity is a critical enabler to achieving transformative progress across the climate agenda. Only by rising above our differences and working together can we raise our shared ambition and deliver progress to keep 1.5°C within reach.’
In this article, we explore the key themes and priorities that we expect to shape COP28, as well as Australia’s role at the conference and opportunities for businesses to engage.
Forecasting COP28: Themes, priorities, and opportunities for engagement
- Global Stocktake: COP28 will see the first Global Stocktake (GST) conclude with the consideration of political outputs arising from the technical analysis of two years of information on global progress towards meeting the Paris Agreement goals. These outputs will inform the ratcheting of Parties’ Nationally Determined Contributions (NDCs) (to be communicated by 2025). While the global community has increased its focus on climate change action, the GST highlights that much still needs to be done to meet the Paris Agreement goals.
- Carbon market development: COP28 will offer an important opportunity for Parties to agree authorisation processes under Article 6.2, and the requirements for methodology development and removal activities that are critical to operationalising the Article 6.4 mechanism. Urgency is mounting from stakeholders seeking certainty on Article 6, particularly given that first biennial transparency reports are due next year.
- Climate finance: At COP28, the Parties will be considering the process for setting a new collective quantified goal on climate finance (NCQG), in which developed countries must commit to mobilise more than USD100 billion per year for climate finance after 2025. They will also be considering the annual reports of the Green Climate Fund (GCF), Global Environment Facility (GEF) and Adaptation Fund.
- Loss and damage: The operationalisation of the global loss and damage fund (Loss and Damage Fund) will be a key focus at COP28, including consideration of eligibility requirements, funding sources, the scope of the Fund and whether the World Bank will serve as interim trustee and host of the fund for an initial 4 year period. In relation to the Santiago Network on Loss and Damage (Network), it is expected that Parties will make a decision regarding the host of the Network and may elect new members of the advisory body of the Network.
- Presidency Priorities and opportunities for business: Noting the Presidency priorities in respect of energy transition, we expect to see an increased focus on commitments to renewable energy deployment, energy efficiency improvements, and electrification. Meanwhile, COP28 will be the first COP since the adoption of the Kunming-Montreal Global Biodiversity Framework, and the Presidency has committed to promoting the goals of the Framework and platform initiatives that protect biodiversity and natural carbon sinks through its action agenda, signalling that COP28 may provide a platform for the private sector to showcase actions to address the intersection of climate and nature.
Presidential plan of action
The COP28 Presidency has set out a plan of action for COP28 which is focused on matching the highest ambition for negotiated outcomes with a robust action agenda to implement those ambitions. The Presidency has called on governments and climate stakeholders to take action in four key areas:
- increasing the speed of the global energy transition and cutting emissions;
- transforming climate finance by delivering on previous agreements such as the Loss and Damage Fund;
- putting nature, people, lives and livelihoods at the heart of climate action; and
- improving inclusivity at COP28 by ensuring adequate representation and participation from all stakeholders.
Throughout the year, the Presidency has held multilateral consultations with heads of delegations to discuss matters that will be considered at COP28. These multilateral consultations have covered topics including the GST, just transition and mitigation priorities. Summaries of the outcomes of these multilateral consultations have been published here.
For example, at the multilateral consultations regarding the GST, the Parties emphasised that the GST outcome at COP28 should provide clear and concrete actions and solutions to accelerate ambition. At the multilateral consultations dedicated to just transition, the Parties shared that they view the work programme on just transition as a platform for sharing knowledge, best practices, experience and challenges on undertaking just transition, and noted the work programme should promote solutions focused on guiding Parties and non-Party stakeholders in undertaking just transition. At the multilateral consultations on mitigation priorities, the Parties emphasised that a mitigation outcome at COP28 should be informed by the best available science, including the latest reports of the Intergovernmental Panel on Climate Change.
The Presidency has also written letters to the Parties throughout the year which set out the Presidency’s vision for COP28, and what it considers will be required for COP28 to be successful. For example, the Presidency has stated that the adoption of a comprehensive and robust framework for the Global Goal on Adaptation (GGA) will be central to COP28’s success, as well as a successful GST outcome.
Key agenda items at COP28
Mitigation ambition and implementation
At COP26, Parties decided to establish a work programme to urgently scale up mitigation ambition and implementation in this critical decade, and at COP27, Parties agreed operational features of the work program (called the ‘Sharm el-Sheikh mitigation ambition and implementation work programme’). This year, the programme held two global dialogues between Party and non-Party stakeholders, focused on the topic of ‘accelerating the just energy transition’, including by implementing policies and measures with global overview and country-specific experience; addressing financial, technological and capacity-building needs in this area; and promoting sustainable development and understanding socioeconomic effects. Discussions in the first dialogue covered a broad array of areas including renewable energy, grid and energy storage, carbon capture and storage, and energy efficiency; while the second dialogue and investment-focused event focused on accelerating just energy transition in transport systems.
At COP28, the subsidiary bodies will be invited to consider the progress of the work programme including key findings, opportunities and barriers in implementation, with a view to recommending a draft decision for adoption by the CMA.
We expect ambition on energy transition to be a key theme for both Parties and private sector engagement throughout COP28 given the Presidency’s focus on this area, with the Presidency committing to work with state and industry partners to deliver an ‘energy package’ with the following elements:
- tripling renewable energy capacity and doubling the rate of energy efficiency improvements across sectors by 2030, including ramping up electrification and enhanced cooling approaches, to enable phase-down of fossil fuels;
- more than halving oil and gas industry scope 1 and 2 emissions, including reaching near-zero methane emissions by 2030;
- transforming heavy-emitting sectors, including scaling up use of low-carbon hydrogen, carbon capture and storage, and carbon dioxide removal, aligned with science;
- substantially shifting toward fossil-free forms of transport, including through vehicle electrification and modal shifts;
- taking action to accelerate efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies, addressing coal-related methane emissions and deploying clean baseload capacity; and
- companies and countries to set ambitious goals, take action, and remain accountable through disclosures, in line with best practices and global standards.
The first GST will culminate at COP28 with a consideration of the outputs arising from information collected and assessed by technical and Party experts over the past two years in relation to global progress towards meeting the Paris Agreement goals. This final consideration will focus on synthesising political outcomes from two years of information analysis, with the aim to produce a decision that will inform the ratcheting of Parties’ next round of commitments in their NDCs (to be communicated by 2025). Broadly, while there is acknowledgement that the Paris Agreement has focused global efforts on reducing emissions and combatting climate change, much still needs to occur. Mitigation efforts must be deployed with more speed and will require more holistic, whole-of-system-and-of-society changes. Real adaptation action is lacking, with much of the effort focused on planning rather than implementation. Crucially, finance flows need to be re-directed towards tackling climate change issues.
The first GST is anticipated to conclude with the following outcomes:
- a CMA 5 decision providing for a robust follow-up mechanism, to ensure scrutiny of the first GST and urging Parties to incorporate insights from the GST into their NDCs. Indeed, an intersessional workshop in mid-October has considered the elements for the outputs of the GST and already begun considering a draft decision;
- a supplementary declaration to the CMA 5 decision to provide political signals to stakeholders (including non-State and non-Party stakeholders) to contribute towards climate change ambition; and
- a technical annex reflecting opportunities, challenges, lessons and good practices that are compatible with the findings of the technical assessment.
For more information, see our article ‘COP28 Explainer: What is the first Global Stocktake?’.
Article 6 carbon market developments
COP26 saw Parties agree the rulebook for international carbon markets under Articles 6.2 and 6.4 of the Paris Agreement, and non-market approaches under Article 6.8. While the rulebook established key elements of these market mechanisms, a number of technical issues remained for resolution at future COPs. While COP27 saw progress on both Article 6.2 and Article 6.4, a number of issues remained outstanding, and meanwhile, there are concerns about the lack of Article 6 readiness among countries, and a general lack of understanding of Article 6 among governments. COP28 will be a critical opportunity for development of both market mechanisms, and stakeholders including the International Chamber of Commerce have called for decisions at COP28 that allow for full and swift operationalisation of Article 6.
Since agreement of the Article 6 Rules, Parties have moved quickly to embrace decentralised cooperative approaches under Article 6.2: as of 2 November this year, there were reportedly 65 bilateral agreements for Art 6.2 cooperation between six different buyer countries and 42 host countries, with over 130 pilot activities underway (the majority of which form part of Japan’s Joint Crediting Mechanism).
At COP27, notable progress was made on Article 6.2, with Parties agreeing (among other things) to guidance for tracking ITMOs in registries and further specifications for registry infrastructure; guidelines for the technical review of the consistency of information submitted by parties about Article 6.2 approaches, including an outline of the technical expert review report; and the outline of the initial report that participating parties are required to submit under the Article 6 Rules.
Key outstanding issues that we expect to see discussed at COP28 include:
- Authorisation: Under the Article 6 Rules, ITMOs must be ‘authorised’ for particular uses, however, Parties have so far been unable to agree the requirements of these authorisations. For example, the EU and others have proposed that there should be three different types of authorisations (for a cooperative approach, the ITMOs themselves, and for entities to be involved in Article 6.2 cooperative approaches), while others have proposed that only one authorisation (of ITMOs) is necessary. Meanwhile, while some Parties hold the view that authorisations should follow a standardised template, others consider that a template approach would not accommodate for certain cooperative approaches. Another point of disagreement has been whether parties should be able to revoke their authorisations.
- Connections between registries: The Article 6 Rules provide for two different types of Article 6.2 registries: national registries developed by participating parties, and an international registry administered by the UNFCCC Secretariat, for participating Parties that do not have or do not have access to a registry. Meanwhile, a separate registry will be established under the Article 6.4 mechanism. Parties have expressed different views about how these registries should be connected, and the degree of complexity required (for example, transactional registries that enable direct transfer of ITMOs between registries are significantly more costly to implement than non-transactional registries).
- Final structure of the agreed electronic format: At COP27, parties agreed to a draft version of the ‘agreed electronic format’ (AEF) that participating parties are to use when providing annual reports on their participation in Article 6.2 cooperative approaches. The AEF is central for keeping track of triggers for corresponding adjustments and whether corresponding adjustments have been applied, so agreeing on its layout and content will be crucial to the coherence and transparency of Article 6.2 markets.
- Sequencing and timing of reporting processes: The Article 6 Rules require that Parties who participate in a cooperative approach submit a series of reports, including an initial report, annual report, and ‘regular information’ that is submitted with biennial transparency reports. However, Parties have been unable to agree so far on some aspects of reporting, for example, whether the initial report should be submitted and reviewed before a Party can submit annual information (in the AEF) and regular information; or whether these items should all be able to be submitted at the same time in some circumstances.
At the request of the Parties at the Bonn Intersessional Conference earlier this year, last month, the UNFCCC Secretariat released an informal technical paper for consideration at COP28 that canvasses a number of these outstanding issues. Urgency is mounting, with countries seeking certainty on Article 6 before biennial transparency reports are due at the end of 2024.
COP27 saw the CMA elaborate the conditions for crediting period and activity design for Clean Development Mechanism (CDM) activities that may transition to the Article 6.4 mechanism, as well as the transition process. However, apart from these developments, last year’s conference saw relatively minimal progress on operationalising the Article 6.4 mechanism, with a number of issues deferred to this year, and a swathe of actions allocated to the Supervisory Body (SB) – the body responsible for supervising the mechanism.
Accordingly, the SB has been very active this year, with its work including receiving requests for transition of CDM activities to the Article 6.4 mechanism from project participants, and adopting procedures for the transition process. Importantly, in September this year, the SB released a draft activity standard, validation and verification standard, activity cycle procedure, and accreditation standard and procedures for public consultation. Further, the SB is currently seeking feedback on a process for stakeholders, activity participants and Parties to appeal decisions of the Supervisory Body or request that a grievance be addressed by an independent grievance process with consultations closing on 1 December 2023.
There are two aspects of the SB’s work this year that we expect to be key focuses at COP28:
- Methodologies: The SB has undertaken consultations and assembled an informal working group to develop recommendations to the CMA on requirements for developing and assessing Article 6.4 mechanism methodologies, but was unable to finalise these recommendations at its eighth meeting in late October as planned. Points of disagreement included the approach to downward adjustment of baselines. Instead, the SB agreed to hold an additional ninth meeting in November with a view to finalising a draft recommendation, and recently, in a significant development, voted to approve the recommendations. The final recommendation sets out (among other things) proposed principles to guide methodology development, and how methods should require additionality and manage leakage risk. With respect to downward adjustment, it provides for ways that this can be operationalised, with the SB to develop standards, tools and guidance to inform how these adjustments are implemented.
- Removal activities: As with methodologies, the SB could not agree on a draft recommendation on removal activities (that is, activities that remove greenhouse gases from the atmosphere and destroy or durably store them) at its eight meeting, with points of disagreement including how to address reversal risk and reversals. The SB finally agreed to approve a recommendation on removal activities for consideration by the CMA at COP28 at its additional ninth meeting. The final recommendation sets out (among other things), requirements relating to the content of monitoring reports, and the high-level process for assessing and addressing reversal risks. However, the document has been described as general in nature, leaving much to be dealt with in further guidance from the SB, including timeframes for post-crediting monitoring, procedures for addressing late, incomplete or missing monitoring reports, and guidance in regard to post-reversal event measures.
The SB’s delay in agreeing recommendations on methodologies and removal activities highlights the contentiousness of these issues, and it remains to be seen whether the CMA will adopt the SB’s recommendations at COP28.
Another outstanding point for negotiation is whether avoidance and conservation enhancement activities should be included in the Article 6.4 mechanism: the Article 6 Rules agreed at COP26 clearly provided for removal activities under the Article 6.4 mechanism, but left the question of whether to include emission avoidance and conservation activities for further consideration. Since then, there have been longstanding differences of opinion as to whether Article 6.4 activities could include emission avoidance and conservation enhancement activities: for example, while some stakeholders consider that avoidance offers an important mitigation opportunity, others query whether it is appropriate to include these activities under the mechanism, given uncertainties and challenges involved in measuring their impacts on emissions. We expect that this may be an issue that is not resolved this year, but is deferred to 2024, as parties prioritise operationalisation of the Article 6.4 mechanism.
At COP21, developed countries pledged to mobilise $100 billion annually by 2020 to support climate action in developing countries. There is speculation that this commitment might be fulfilled this year, and though this would be three years behind schedule, many still would consider it a success. Ongoing efforts involve establishing a new collective quantified goal on climate finance (NCQG) for the years that follow 2025. The NCQG will be set at a minimum of $100 billion per year, taking into account the specific needs and priorities of developing countries. This NCQG, which is to be decided by 2024, is acknowledged as vital for rapidly escalating climate action and ensuring continued alignment with the temperature goals outlined in the Paris Agreement.
At COP26, an ad hoc work programme on the NCQG was established. It was determined that from 2022 to 2024, four Technical Expert Dialogues (TED) would be conducted annually. In March 2023, the co-chairs of the ad hoc work programme on the NCQG formulated a work plan outlining the initial themes for discussions at each TED in 2023. The aim was to generate options covering all aspects of the goal before the COP for consideration by Parties. This includes considerations such as, amongst others, quantity, quality, scope, and access features, along with sources of funding and transparency arrangements to monitor progress towards achieving the goal. The eighth TED, scheduled to occur alongside CMA 5, will serve as an opportunity to revisit aspects of the NCQG discussed throughout the year at the TEDs and address any outstanding questions based on intersessional work. It is expected that the actual NCQG will be set at COP29 in 2024.
The annual reports of the GCF, GEF and Adaptation Fund will also be considered by the Parties. The reports will detail their financial and operational performance from 2022-2023. The Parties will have the opportunity to provide guidance on the policies and programme priorities of the GEF and the GCF and take any action they deem appropriate in relation to the Adaptation Fund. Additionally, the Parties will consider the annual report of the Standing Committee on Finance. Of note, Australia has re-joined the GCF, and it is expected that the Australian Government will provide a modest contribution to the Fund before the end of the year.
Loss and damage
At COP27, the Loss and Damage Fund was agreed to by the Parties to provide financial assistance to developing nations suffering from adverse climate change impacts. Current research suggests that developing countries may face 'economic' residual damages surpassing USD $500 billion annually by 2030. While this figure is approximate and excludes non-economic loss and damage, it serves as an indicator of what funding will be required for loss and damage.
Despite an agreement being reached on the Loss and Damage Fund, the fund still needs to be operationalised. At COP27 a transitional committee was established to make recommendations at COP28 on the operationalisation of new funding arrangements for loss and damage including the Loss and Damage Fund. At the fifth meeting of the transitional committee, which was held from 3 to 4 November 2023, the transitional committee settled on a proposal for such recommendations, to be considered by the Parties. It was proposed that the World Bank be invited to operationalise the Loss and Damage Fund as a World Bank-hosted Financial Intermediary Fund for an interim period of 4 years. In effect, this means that the World Bank would serve as an interim trustee and host of the fund for the first 4 years of its operation. It was also proposed that Parties only be invited to make financial contributions to the Loss and Damage Fund, and that there be no set requirement to do so, even for developed countries. The proposal also included draft text for the governing instrument of the Loss and Damage Fund, which provides that, amongst other things:
- the scope of issues that can be addressed by funding from the Loss and Damage Fund will include economic and non-economic loss and damage associated with the adverse effects of climate change. This may include funding complementary to humanitarian actions taken after an extreme event, intermediate or long-term recovery and reconstruction or rehabilitation actions;
- the Board of the Loss and Damage Fund will have an equitable and balanced representation of all Parties within a transparent system of governance;
- developing countries that are particularly vulnerable to the adverse effects of climate change will be eligible to receive resources from the Loss and Damage Fund;
- the Loss and Damage Fund will seek to promote and strengthen national responses for addressing loss and damage through pursuing country-led approaches;
- the Loss and Damage Fund will be able to receive contributions from a wide variety of sources of funding, including grants and concessional loans from private, public and innovative sources; and
- the Loss and Damage Fund will provide financing in the form of grants and highly concessional lending.
At COP28, the Parties will consider the transitional committee’s proposal for the operationalisation of new funding arrangements for loss and damage including the Loss and Damage Fund. It should be noted that in order for the transitional committee’s proposal to be settled, both developed and developing countries made major concessions. Further, the United States initially attempted to veto the consensus of the transitional committee members in relation to the proposal. Although the United States did not expressly object to the adoption of the proposal in the end, it expressed dissatisfaction with the proposal, particularly in relation to the proposed funding sources for the Loss and Damage Fund. Consequently, the acceptance of the proposal at COP28 may face challenges.
Beyond funding sources, eligibility criteria for accessing resources under the fund are likely to be a point of contention. Some Parties may advocate for universal eligibility for all developing countries, rather than restricting it to those particularly vulnerable to the adverse effects of climate change. Additionally, the scope of the Loss and Damage Fund may be contentious. For instance, some Parties may argue for limiting the scope to economic loss and damage, excluding non-economic aspects from consideration.
COP27 also saw the Parties agree on the institutional arrangements to operationalise the Santiago Network on Loss and Damage (Network). This Network, formed in 2019 under the Warsaw International Mechanism on Loss and Damage, is designed to provide technical support to communities and countries that are impacted significantly by climate fuelled natural disasters. At COP27, the terms of reference for the Network were adopted, which set out the functions and structure of the Network. CMA 4 decided that a selection process for the host of the Network secretariat would launch at the end of CMA 4 and COP 28 in order to select the host by 2023. CMA 4 also requested the subsidiary bodies to recommend at SB 58 a draft decision with a proposal to host the Santiago network secretariat for consideration and adoption for the governing bodies at their sessions to be held in November – December 2023. CMA 5 will be invited to take any action it deems appropriate on the basis of the recommendations of the subsidiary bodies, and may also elect new members of the advisory body of the Network.
As global average temperatures continue to rise, more and more people will suffer from the impacts of climate change, thus highlighting the need to scale up adaptation efforts. As part of this effort, article 7 of the Paris Agreement established the GGA to enhance adaptive capacity, strengthen resilience, and reduce vulnerability to climate change. However, progress on the GGA was slow until COP26 in Glasgow in 2021 established the Glasgow-Sharm el-Sheikh work programme, a two-year programme to be carried out by Subsidiary Body for Scientific and Technological Advice (SBSTA) and Subsidiary Body for Implementation (SBI). The Glasgow-Sharm el-Sheikh work programme consisted of eight workshops throughout 2022 and 2023 which focused on themes including enhancing adaptation action and support; monitoring and evaluation; and communicating and reporting on adaptation priorities.
At COP28, the CMA has been invited to adopt a framework for the GGA. However, for this framework to be adopted, negotiators will need to be able to reach agreement on key aspects of the GGA framework. For example, various targets were proposed in the final workshops for the Glasgow-Sharm el-Sheikh work programme which will likely be considered at COP28. These proposed targets included overarching targets, targets to protect vulnerable populations and improve community resilience and financial-related targets. As adaptation measures are country specific, the framework for the GGA will also need to ensure that it follows an inclusive approach, considering local and vulnerable communities, indigenous knowledge and intergenerational equity as well as considering the best available science.
In the years following conclusion of the Paris Agreement, we have seen increasing international focus on ‘just transition’ – a term that essentially encapsulates the concept of ensuring that the transition to net-zero emissions and climate resilience is orderly, inclusive and just, creates decent work opportunities and leaves no one behind.
At COP27, the Parties agreed to establish a work programme on just transition to discuss pathways to achieving the goals of the Paris Agreement, and asked the SBI and the SBSTA to recommend a draft decision on this matter for consideration and adoption at COP28. The Parties also decided to convene an annual high level ministerial round table on just transition as part of the work programme, beginning at COP28.
As requested by the subsidiary bodies at the conclusion of the Bonn Conference, last week, the UNFCCC Secretariat issued a synthesis report summarising Parties’ views on a range of elements of the just transition work program, including its objectives, institutional arrangements and the role of non-Party stakeholders, and it remains to be seen whether a decision on the just transition work program will be developed and adopted by the CMA.
What is clear, however, is that just transition is expected to be a focal point for discussions throughout the conference. We note that the COP27 Presidency and incoming COP28 Presidency convened a dedicated multilateral informal consultation on just transition in April this year, and the COP28 President-Delegate emphasised the importance of a just and equitable energy transition in his meetings with delegates throughout the Bonn Conference in June. The President-Delegate has also noted in his letters to Parties the urgent need for the world to accelerate the energy transition in an orderly, just and equitable way.
It is also worth noting that the thematic program for COP28 includes a day focused on levers and pathways for rapid decarbonisation, job growth, and economic opportunity and just transition across the full energy and industrial value chains.
Australia to support progress on adaptation at COP
Australian climate policy has seen a number of significant developments since last year’s conference, from the introduction of reforms to the Safeguard Mechanism in July to commencing work on developing sectoral decarbonisation plans and consulting on a proposed Carbon Border Adjustment Mechanism. That said, there is concern that we are not on track to meet our NDC targets: the Minister’s annual climate change statement which will be released before the end of the year in accordance with the Climate Change Act 2022 will shed light on progress so far.
Australia is expected to have an active presence at the conference through hosting events at its national pavilion. Importantly, in September, the Government announced that it will play a leading role in international negotiations on climate adaptation in the lead-up to COP28, with Assistant Minister for Climate Change and Energy Senator Jenny McAllister accepting an invitation by the COP28 President-Designate, to facilitate consultations to reach outcomes on adaptation at the conference. A key focus of the negotiations will be the development of a framework to advance the GGA.
The Government has also been working to deepen its engagement in climate issues in the Pacific, with climate change emerging as a central focus at the recent Pacific Islands Forum in the Cook Islands. At that forum, Pacific leaders emphasised the need for Pacific-led and Pacific-focussed solutions to their vulnerabilities in relation to climate change, and Australia announced a number of investments to support climate resilience in the region, including contributing to the new Pacific Resilience Facility – a Pacific-built trust fund that will invest in small-scale climate and disaster resilient projects. Australia announced at COP27 that it would bid to host COP31 in 2026 in partnership with Pacific nations, and since then there have been calls from Pacific leaders for Australia to match its COP31 aspiration with action. Against that background, we expect to see engagement with our Pacific neighbours to be one of Australia’s priorities at COP28.
COP28 to provide opportunities for businesses in nature and energy solutions
Given the COP28 Presidency’s focus on energy transition and commitment to working with state and industry to deliver an ambitious energy package, we expect COP28 to provide particular opportunities for engagement for businesses in the energy sector, including those involved in renewable energy generation, energy efficiency, and electrification; electric vehicles; and helping to transition heavy-emitting sectors through advancing technologies such as low carbon hydrogen and carbon capture and storage.
In that regard, key players in the energy industry have been busy in the lead up to the conference:
- The International Renewable Energy Agency (IRENA), the Global Renewable Alliance and the COP28 Presidency have jointly launched a report, ‘Tripling Renewable Power and Doubling Energy Efficiency by 2020: Crucial Steps Towards 1.5°C’ at the Pre-COP28. The report provides policy recommendations for governments and the private sector on how to increase global renewable energy capacity to at least 11,000 GW while also doubling annual average energy efficiency improvements by 2030.
- The International Energy Agency (IEA) and the COP28 Presidency, in conjunction with IRENA have convened a series of four High-level Dialogues in the lead up to COP28. The Dialogues were intended to build consensus on 1.5°C-compatible energy transition pathways and engage both public- and private-sector decision-makers in the energy industry.
- The COP28 Presidency launched the Energy Transition Changemakers initiative, which is aimed at promoting collaboration within the private sector to implement innovative and scalable decarbonisation projects worldwide. The initiative seeks to showcase solutions that facilitate the energy transition by selecting multiple projects to be selected as Energy Transition Changemakers and to present their work on 5 December 2023 at Expo City Dubai. During the selection process the COP28 Presidency actively sought projects that have successfully addressed climate challenges through ground breaking and innovative solutions or approaches. Projects of all types within the renewables, renewable integration and clean power, energy efficiency, low-carbon hydrogen, and heavy emitting sectors (such as steel, cement and aluminium), were considered.
The Presidency and the European Commission are expected to launch the ‘Global Renewables and Energy Efficiency Pledge’ at COP28, and Ministerial leaders will convene at the Global Renewables and Energy Efficiency Pledge roundtable to discuss innovative strategies to accelerate the transition to renewable energy sources and enhance energy efficiency on a global scale.
In a similar vein, energy and industrial sector transition will be one of the four focus areas of the World Business Council for Sustainable Development (WBCSD) at COP28, along with corporate carbon performance and accountability; food and agriculture transformation; and ‘nature positive for climate action’.
With respect to nature, COP28 will be the first COP since the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) in December 2022, which guides action in global efforts to halt and reverse biodiversity loss by 2030. Given the intrinsic connection between climate change and biodiversity loss, achieving the goals and targets of the GBF will make significant contributions to both climate mitigation and adaptation. It is estimated that at least 70% of the GBF targets directly or indirectly support governments and non-state actors in fulfilling the objectives of the Paris Agreement. COP28 provides a platform for stakeholders, including financial institutions, to showcase credible actions in addressing the intersection of climate and nature. At COP28, December 9 will be the ‘Nature, Land Use, and Oceans’ day, which will in part showcase efforts that accelerate the implementation of the GBF.
The Presidency recently launched the ‘Net Zero Transition Charter: Accountability mobilisation for the private sector’, requiring organisations who sign up to set public 1.5-degree aligned targets, produce credible transition plans by December 2024, and report annually on progress. While it remains to be seen how the Charter will be taken up over the course of COP28, signing up presents an opportunity for organisations to publicly demonstrate their commitment to supporting the net zero transition.
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