As COP28 in Dubai concludes its first week, the Brussels International Center (BIC) team provides a comprehensive summary of the main developments, emphasizing the need for continuous progress in the realm of climate finance and collective action. Progress on climate finance has been a focal point, with a significant gap between flows and investment needs in emerging markets and developing economies.
In a groundbreaking move during the WCAS, 12 leading countries on finance reform unveiled a new vision for climate finance through the COP28 UAE Declaration of Leaders on a Global Climate Finance Framework. The UAE unveiled plans for a Finance Forum in 2024, aiming to oversee progress made at COP28 and report on the global climate finance framework's implementation. Noteworthy advancements include the $100BN goal, Green Climate Fund pledges totaling $12.8BN, and cumulative contributions of $295M to the Adaptation Fund and Least Developed Countries Fund. Developed nations, historically significant contributors to emissions, are now summoned to play a crucial role in sustaining the Fund.
After 30 years of effort, from developing countries on the frontline of climate impacts and from civil society, a Loss and Damage Fund has been agreed in the UNFCCC. The landmark adoption occurred with an agreement on Loss and Damage, accompanied by almost $726M pledged to the fund and funding arrangements. Further, innovative financing mechanisms emerged, including pledges to the IMF Resilience and Sustainability Trust, commitments to channel Special Drawing Rights (SDRs) to the African Development Bank, and widespread adoption of climate-resilient debt clauses.The current focus intensifies on tangible action, compelling these nations to not merely craft but deliver pledges that will propel the Fund into full functionality. It marks the initiation of resource allocation, a step in the Fund's capacity to address pressing global climate challenges in least developed countries. Acknowledging that loss and damage needs right now are in the order of $400 billion a year, the Fund should play a key role in delivering funding of this magnitude. Therefore, initial pledges must be made in the context of this scale.
Multilateral Development Banks showcased commitment with over $180BN in additional climate finance commitments, the World Bank elevating its climate finance target to 45% by 2025, unlocking an additional $9BN annually. While the Inter-American Development Bank (IDB) has set ambitious goals, aiming to triple direct climate finance and mobilize up to $150BN over the next decade, it is crucial to acknowledge that these efforts may fall short in comparison to the pressing needs. The World Bank pledged $5BN for clean energy access in Africa, while the IDB committed $5BN to sustainable development projects in the Amazon, accompanied by $1BN in incentives for countries meeting set targets.
Regarding decarbonization, the Oil & Gas Decarbonization Charter (OGDC) gained the endorsement of 52 companies spanning all continents, including 32 national oil companies. The endorsers collectively represent 40% of global oil and gas production, with 35 committing to achieving near-zero methane emissions for the first time. CEOs who endorsed the charter outlined their strategic plans to actively contribute to the target of achieving net-zero emissions by 2050 or even earlier. The COP28 Presidency, in collaboration with numerous partners, inaugurated the Global Decarbonization Accelerator (GDA). This comprehensive, cross-sectoral initiative is designed to significantly reduce emissions, fostering an accelerated, just, equitable, and orderly energy transition.While commendable and as conclusions are still being negotiated, it is imperative to advocate for a fossil phase-out rather than a mere phase-down. The urgency of addressing climate change necessitates a bold and decisive shift away from fossil fuels. A phase-out strategy should entail a complete cessation of fossil fuel use, aligning with the imperative to limit global temperature rise.
On December 4th, a significant milestone was achieved with the inaugural integration of Gender Equality and Finance Days, emphasizing the pivotal role of funding for women and girls in climate action. The COP Presidency introduced the COP28 UAE Gender-Responsive Just Transitions & Climate Action Partnership, garnering endorsement from 74 countries. This partnership aims to mainstream women's leadership, decision-making, and financing, aligning with the just transition mandated by the Paris Agreement.
In the first week of COP28, technology and innovation took center stage. The Climate Innovation Forum on December 1st gathered global tech leaders to discuss the development and scaling of cutting-edge climate solutions, attracting numerous attendees. The Technology and Innovation Hub stage hosted numerous sessions and speakers exploring the enabling role of technology, innovation, and entrepreneurship in tackling climate change. For instance, during the Business and Philanthropy Climate Forum at COP28, the Innovate for Climate Tech coalition was officially launched.
In the upcoming second week of COP28, the Presidential action agenda will address crucial topics such as youth and education, nature and ocean, and food and water systems. Simultaneously, efforts are underway to finalize an approach for political engagement by Ministers during the negotiations. This strategy aims to successfully resolve all outstanding issues, fostering a balanced and equitable set of outcomes aligned with the goals of the Paris Agreement. While the initiative stresses an integrated approach covering mitigation, adaptation, finance, and the conclusion of the first Global Stocktake, much is still on hold, and it remains to be seen how effectively these efforts will lead to a substantial course correction in the global pursuit of climate objectives.