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A COP like no other: COP28 UAE

The Roman philosopher Lucretius coined the expression “Quod ali cibus est aliis fuat acre venenum” (what is food for one man may be bitter poison to others). After COP28, it would be more appropriate to adapt this saying to our realities: “What's one man's treasure is another man's grave.”

UNFCCC's Conference of Parties have had a notorious legacy as a platform for oil-rich countries and oil corporations to “seed doubt, dispute, distract, delay, disrupt, deny, and repeat." COP28 is torn apart by controversy, ideology, and the belief of the “legacy” markets battling with the faith of climate change.

Global commitments for this decade add up to a cut in emissions of carbon and other greenhouse gases of just 11 percent, well below the cuts of between 25 percent and 50 percent needed to limit global warming to 1.5˚ Celsius by 2050, IMF research shows.

The world will not reach the 1.5˚ ambition unless there is a successful energy transition in Asia.

(1.) Asia accounts for about half of global greenhouse gas emissions.

(2.) Coal plants account for nearly 60% of power generation in Asia, where energy demand is expected to increase by two-and-a-half times by 2050.

(3.) Coal-fired power plants account for about a third of Asia's greenhouse gas emissions. If they are left to operate as planned, they will exhaust about two-thirds of the carbon budget that we have remaining to keep the rise in global temperatures to within 1.5 ˚ Celsius.

In the immediate aftermath of #COP28, we face the urgency of the job at hand - the need for collaboration between financial institutions and businesses to develop innovative financing models where risk is shared between partners.

Tripling Renewable Energy Capacity, doubling of #energyefficiency measures by 2030 and phasing out fossil fuels in line with a scientific 1.5˚ trajectory (all of which we hope to see in the final text of the negotiations), alongside calls for halting and reversing deforestation, land degradation, biodiversity and ecosystem loss, a resilient food system and a strong goal on adaptation, is a capital intensive business which will require the redirection of international private sector finance.

It's never been a secret, but at COP28 UAE, private sector leaders were quite loud and clear: "Bridgewater's Ray Dalio Stresses the Importance of Profit in Green Investing— Bloomberg event." Tipping the balance in favour of attractive green investment requires a sustainable taxonomy-aligned, asset-based, ring-fenced approach to green and social finance for transitioning high-emitting industries, when coupled with robustly audited transition plans and stringent financial penalties if a borrower backs on delivering net zero commitments.

In the immediate aftermath of #COP28, we face the urgency of the job at hand: the need for collaboration between financial institutions, businesses to develop innovative financing models where risk is shared between partners. The resulting funds, partnerships, and solutions deploy non-commercial and development finance to mobilise private capital, ensuring both acceptable risk-adjusted returns to all parties and an attractive cost of capital.

Nonetheless, it's worth mentioning, the scale of the COP28 UAE was enormous:

(1.) 100,000 attendees—nearly three times the number who attended COP-26 in Glasgow
(2.) 285 Press Conferences
(3.) 152 Global Climate Action Events
(4.) 366 Side Events
(5.) 195 Exhibit

A UNFCCC COP definition of success is not the scale, it's the outcome.

The updated text of the global stocktake was released on December 11, 2023. The much anticipated 'phase-out' of fossil fuels was not included; instead, the text around fossil fuels implies a 'phase down' as follows: “Reducing both consumption and production of fossil fuels in a just, orderly, and equitable manner so as to achieve net zero by, before, or around 2050, in keeping with the science.

The gloves are off with a fossil fuel fight out in the open on a United Nations diplomatic platform is the most refreshing thing about #Cop28. Why so? The systemic risks are now clear and manifest for all meaning everyone finally has “skin in the game”.

The success or failure of intense COP28 UAE negotiations is down to "consensus" vs. "majority". If there is no consensus on phasing out/down fossil fuels it would lead to existential questions on UNFCCC ability to address climate change and related issues. If 200 countries agree on phase out/down, when will the majority win?

Key impact points:

(1.) Financial pledges: COP28 secures over $80 billion pledges for climate action, including the groundbreaking $30 billion 'Alterra' fund.

(2.) Food systems revolution: A declaration signed by 130+ countries vows to overhaul global food systems, combatting climate change's significant contributor.

(3.) Emission reduction strategies: A triple commitment emerges: tripling renewable energy capacity, tripling nuclear power by 2050, and a substantial reduction in methane emissions.

Author


Ms. Chandni Khosla

Ms. Chandni Khosla

She is a Non-Executive Director at Neo Securities Ltd. and Senior Vice President with sustainability and sustainable finance with Singapore Exchange. She is a Climate Safe Lending Network Fellow, a Senior Executive Fellow, Harvard Kennedy School and is also a Lifetime Fellow of the Institute of Directors (IOD). She has participated in the Taxonomy working group (HDFC–Special Invitee) in the development of India's Sustainable Taxonomy that is led by the Ministry of Finance, Department of Economic Affairs and she has also been involved with FICCI led UK –IndiaEconomicandFinancialDialogue(EFD).

Owned by: Institute of Directors, India

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