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COP28 Day 5: Oil and gas in the spotlight

By Sophie Morello
05 December 2023
Green & Good (ESG and Impact)

For the host country, the UAE, the week got off to a rocky start with widespread outcry at the emergence of comments from the COP President, Sultan al-Jaber, appearing to question the science behind ending fossil fuels to limit global warming. The COP Presidency responded to the reports, saying "We very much believe and respect the science." 

There was also anger that figures revealed the number of COP delegates linked to fossil fuel interests has quadrupled this year. The data comes from a campaign group, Kick Big Polluters Out, and shows that around 2,400 people connected to the coal, oil and gas industries all registered for the climate talks. The increase can partly be attributed to changes in registration details including industry type, but these stories add weight to the intense scepticism of the COP Presidency’s effectiveness and distract from some of the achievements being made.

So far, the Summit has shown encouraging developments on cutting out fossil fuels, for example. Over 100 countries have promised to treble world renewable energy use by 2030 with a phase out of fossil fuels by 2050. In addition to this, 50 oil and gas companies, including Saudi giant Aramco, have pledged to stop adding to carbon emissions by 2050, but some viewed this as greenwash.

It is still hoped the pledge to phase out fossil fuels will be included in the final deal made at COP, meaning all countries that are represented sign. This would be a big win if it happens, but Saudi Arabia has made it clear it won’t agree to this, and China and India have so far only shown support for the ramping up of renewables, not a phase out of fossil fuels. The scene is set for difficult talks in the days ahead.

The impetus for a ‘phase out’ pledge was reinforced today, when research showed that this year, emissions are estimated to be 1.1% higher than in 2022, despite some countries cutting emissions and the growth of renewable energy. And the UNEP says the world is currently on course for 2.9C of warming by 2100 and that global emissions need to peak in 2025. Worryingly, 2023 is on course to be the hottest year for 125,000 years.

The role of technology in helping track and reduce emissions has also been highlighted at COP. A global coalition co-founded by Al Gore, the former US vice president, has released a granular database tracking global greenhouse gas emissions, down to the individual polluter. Companies can use this data to decarbonise their supply chains. The database, Climate TRACE, uses machine learning, satellites and other technology to detect and track greenhouse gas emissions.

Also, Microsoft has agreed to purchase as many as 1.5 million carbon removal credits from Mombak in Brazil, covering 70,000 acres. Cloud technology and drones will choose reforestation sites and Brazil is now the world’s biggest exporter of carbon removal credits.

Aside from fossil fuel cuts, one of the biggest challenges at COP is to get finance to flow to developing countries. There is the long running problem that developing countries pay too high a cost for capital investment. There is also a gap between the money needed and the amount being spent. The UN says developing countries need up to $387 billion a year to adapt to climate change. 

The UAE has launched a $30 billion climate investment fund, alongside the likes of BlackRock and Brookfield, with a focus on the developing world. A Loss and Damage fund, to be administered by the World Bank, to deal with the impact of extreme weather events in the developing world has attracted financial commitments from the developed world. But billions are needed, not millions. 

Also, the US government, the Bezos Earth Fund and The Rockefeller Foundation announced the Energy Transition Accelerator (ETA), an innovative carbon finance platform aimed at catalysing private capital to support ambitious just energy transition strategies in developing and emerging economies. Based on preliminary estimates, the ETA could mobilize from $72 billion to $207 billion in transition finance by 2035. 

Climate finance is a big theme at COP and we are expecting to see big changes coming to the carbon offset market, which has been beset with controversy in recent months. There is the anticipated initiative from the global finance sector called the impact disclosure taskforce, which is designed to share available data which is relevant to the UN’s sustainable development goals.

A new global carbon offset mechanism known as “Article 6.4” has also been trailed, designed to establish a market mechanism which will be overseen by the UN that enables governments and companies to trade carbon credits. We hope to see news of this in the coming days.

Tomorrow will focus on Multilevel Action, Urbanization and Built Environment/Transport, and we’ll report back on Thursday the latest developments.