Cop28’s bounty of climate promises – what did we really get out of it?

What we got was incrementalism when deep and radical solutions are needed. Politicians are fiddling while the world burns
Nevertheless, Hong Kong can play a key role in how carbon trading is implemented and in financing the energy transition

Mark Hinnells

Published: 9:30am, 25 Dec 2023

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The Cop28 UN climate conference in Dubai ended with its first ever declaration on “transitioning” from fossil fuels and a bounty of promises and plans – at least 74 “pledges and declarations” and “new initiatives” were counted by Climate Action Tracker.

But the question remains: what did we really get out it?

On the first day of Cop28, delegates agreed to operationalise the “loss and damage” fund proposed at the previous Conference of Parties to help climate-vulnerable countries. But the over US$700 million pledged so far amounts to less than 0.2 per cent of the losses faced by these countries every year.

On the last day, delegates agreed on “transitioning away from fossil fuels” but the journey was fraught. At Cop26, there was discussion of a “phase-out”, later diluted in the final agreement to a “phase-down” of fossil fuels. Before COP28, its president Sultan Ahmed al-Jaber had astonishingly claimed there was “no science” to phasing out fossil fuels, only to execute a volte-face in helping produce a declaration that moving away from fossil fuels was in “keeping with the science”.

But merely saying we need change doesn’t deliver it. And carrying on as we are would see temperatures rise by 2.9 degrees Celsius this century. We need to reduce emissions by roughly half by 2030 to keep the increase under the targeted 1.5 degrees.

Policy and enforcement are still up to national governments. Just as each country agrees to a Nationally Determined Contribution (NDC) towards targeted global emissions cuts, any Cop28 pledge must be translated into national policy to be effective.

For instance, countries vowed to triple the world’s renewable energy capacity and double the rate of energy efficiency improvements to over 4 per cent every year before 2030. But given that appliances such as refrigerators and air conditioners, as well as cars, can take 15 years or more to be replaced, efficiency changes are notoriously slow.

There was the launch of the Oil and Gas Decarbonisation Accelerator, a platform aimed at getting oil and gas companies to cut emissions, including methane. But when burning oil and gas produces at least five times more emissions than their extraction and refining, real change has to come from transitioning away.

As for the pledge to scale up carbon capture to a gigatonne a year by 2030, the Climate Action Tracker called it “beyond the realms of plausibility”. It would need the current pipeline of projects to more than double and all be successful – when the technology has a long lead time and a success rate of 20 per cent.

While initiatives can increase climate ambition, voluntary pledges have a mixed track record. And the sheer amount of Cop28 initiatives, their overlaps and the way they are packaged could make the calculation of emission reductions very difficult.

04:44

Cop28 climate summit closes with agreement to ‘transition’ from fossil fuels

That said, the Climate Action Tracker estimates that of the total emissions savings achievable under Cop28 pledges, around a quarter is included in government NDCs, another quarter is additional and achievable – but around half is unlikely to be happen.

And so the circus moves, next November, to the Cop29 hosted by Azerbaijan, where oil and gas bring in around 90 per cent of export revenue and finance around 60 per cent of the government budget. Already, there is concern the event might be used to promote Azerbaijan’s gas reserves over the global energy transition.

Cop29 will also need to pick up some really significant issues deferred from Cop28, including how to reduce aviation and shipping emissions, operationalise carbon trading and finance the decarbonisation of developing economies.

What does all this mean for Hong Kong? The city is covered under China’s NDC so may seem to have limited autonomy but, as I have previously explored, Hong Kong’s economy is very different from the mainland’s and needs different solutions.

Hong Kong is not formally represented at Cop events but at Cop28, the Hong Kong Financial Services Development Council and Friends of the Earth co-hosted a Hong Kong forum, a first for the city.

Hong Kong can play a key role in how carbon trading is implemented, as a centre for carbon trading looking into the mainland and across Southeast Asia, and in financing the energy transition.

It also needs to understand which of its assets are at risk, from physical threats such as rising sea levels and stronger typhoons, and from the energy transition, which could leave funds’ assets, such as fossil fuel investments, worth significantly less. Hong Kong may even aspire to host a Cop to influence how markets develop, particularly for carbon trading and transition finance.

09:22

Central under water in 80 years? Hong Kong’s coming climate crisis

Former US vice-president Al Gore said: “The decision at Cop28 to finally recognise that the climate crisis is, at its heart, a fossil fuel crisis is an important milestone. But it is also the bare minimum we need and is long overdue. The influence of petrostates is still evident in the half measures and loopholes included in the final agreement.”

I would put it differently. What we got was incrementalism when deep and radical solutions are needed. Politicians are fiddling while the world burns.

Hong Kong still has a huge opportunity to use its market power to finance change across Southeast Asia. Given that it is a region with one of the world’s largest populations, fastest-rising emissions and great vulnerability to climate change, there is everything to play for.

Dr Mark Hinnells is strategy director at Climate Finance Asia