The 28th annual conference of the parties, COP28, takes place in Dubai from 30 November to 12 December, with negotiations set to be framed by the first UN Global Stocktake. Finance is central to the debate, recognised as one of four cross-cutting themes alongside a dedicated day for the topic on 4 Dec.
While the UAE Presidency’s ties with the fossil fuel industry have caused considerable controversy, the President Designate, H.E. Dr Sultan Ahmed Al Jaber has set out its asks for the remainder of this “decisive decade”.
The UAE’s COP28 Action Plan includes asks for the tripling of global renewable energy capacity; doubling the number of energy efficiency improvements across sectors by 2030; and more than halving oil and gas industry scope 1 and 2 emissions, which includes reaching near-zero methane emissions.
Missing, however, from the President’s priorities is the IEA’s ask to reduce fossil fuel demand by 25% this decade.
Though this attention on methane is welcome, the lack of scope 3 emissions is glaring. That category accounts for 80% to 95% of oil and gas indsutry emissions, according to research by Wood MacKenzie.
The Presidency asks largely reflect the International Energy Agency’s “five pillars for COP28,” which it published alongside the World Energy Outlook 2023 and delivered to world leaders.
Missing, however, from the President’s priorities is the IEA’s ask to reduce fossil fuel demand by 25% this decade. The host nation’s language advocates for “phasing down” fossil fuels rather than “phasing out”, a language shift indicated at the Bonn Climate Change Conference earlier this year. The focus on reducing emissions, rather than fossil fuel production, has also been criticised by climate campaigners.
Stephanie Pfeifer, IIGCC CEO recently sent a letter to H.E Dr Al Jaber calling for the phase-out of fossil fuels and speeding up of global decarbonisation efforts. The letter also highlighted the need to build resilience and reduce vulnerability, as well as the importance of scaling up, accelerating and aligning finance for climate action.
Agreeing loss and damage
Finance shares its thematic day with trade, gender equality and accountability on 4 December and is also one of four cross-cutting themes across the conference. The Presidency priorities include calls to replenish the Green Climate Fund, which was established in 2011 to help fund clean energy and sustainable development projects in developing countries.
The EU and US have signalled their intent to contribute to the fund in recent weeks. There is also pressure on a handful of other high per-capital income countries not currently obliged to contribute.
COP28 will also see efforts to operationalise the Loss and Damage Fund, which was hotly debated but agreed last year at COP27. Many questions remain over how to facilitate the fund, which aims to provide financial support to poorer, more vulnerable nations to cope with climate-related disasters such as droughts and floods.
The fund’s structure, where it’s hosted, which nations should contribute, and whether it should receive capital from “any willing donor” are all questions set to cause friction during negotiations. But overcoming these concerns and finalising the details of the fund at COP28 is key to rebuilding trust in the negotiations, particularly among developing nations.
Investors will pay close attention to the discussion on “any willing donor”, which could open the door to private finance.
For now, the World Bank is the interim host of the fund, while the EU and US have signalled their intent to contribute to it in recent weeks. There is also pressure on a handful of other high per-capita income countries that are not currently obliged to contribute to do so, including the UAE.
Investors at COP
More broadly, investors will play a vital role in finance discussions, with private finance recognised as imperative to reaching net zero and closing the finance gap. Many will use COP28 to reiterate their commitments and emphasise the need for a supportive enabling policy environment that accelerates and scales up private finance flows.
Our delegation will be on the ground to represent IIGCC members, joining panels, speaking opportunities and engaging in bilateral meetings. We are also working with several organisations including the Marrakech Partnership for Global Climate Action, the BuildingtoCOP coalition, the Resilience Hub, Race to Zero, and the Investor Agenda.
IIGCC delegates including myself, Stephanie and the Chair of our Board, Faith Ward, will be on the ground to collaborate with members and represent investors in dialogues with policymakers and UNFCCC officials.
Find out about our delegation and its priorities in our overview of IIGCC at COP28. We’ll also share more information on how to get involved, in person or online, in the coming weeks.
IIGCC members: Join us on 21 November at 13:00 GMT for a special COP28 policy webinar with Archie Young CMG, who previously led negotiations for the UK Presidency of COP26. We will also be joined by Nazmeera Moola, Chief Sustainability Officer at Ninety One, who will give the investor’s perspective.
The webinar will explore the key themes of this year’s conference and how the policy outcomes of the Global Stocktake could impact sectoral policy frameworks and investor portfolios.
If you’d like to be the first to hear about IIGCC’s work at COP28 and access our webinars, insights and analysis, why not speak to our investor relations manager today to find out more about becoming a part of IIGCC?