$57bn in climate finance and carbon credit controversies: The 7 biggest stories from 4 December at COP28
In this members' exclusive COP28 daily roundup, we summarise seven of the biggest stories from 4 December at the climate summit in Dubai, including the President's emergency press briefing on fossil fuels, held in an attempt to safeguard his credibility.
It may be the start of the week for edie’s readers back in Europe, but the editorial team have worked through the weekend and have now arrived at another themed day in the COP28 Presidency’s agenda. Attention today has turned to finance and trade, with the organising team celebrating $57trn of investment so far.
Of course, participants continue to flag that this is not enough, and that quality is just as important as quanity, if not moreso. Peaceful protests continue to be held onsite calling for more loss and damage funding and guarantees that this will be accessible.
Debates are also raging regarding greenwashing – whether that’s around tenacious claims on fossil fuels or debates on international carbon markets.
To help you recap all the action, this article rounds up all the major developments from 4 December at COP28.
COP28 Presidency denies widely-criticised comments on phasing out fossil fuels
COP28 President Dr Sultan Al Jaber was slammed on social media and in the press on Sunday (3 December), after the Guardian unearthed comments he made in an online event prior to the climate summit.
In conversation with Ireland’s former President and chair of The Elders on 21 November, Mary Robinson, he said he had seen “no science out there” concluding that a fossil fuel phase-out would deliver the Paris Agreement’s 1.5C trajectory. He accused Robinson of “alarmism” and asked her to have a more “sober and mature conversation”.
Al Jaber and his team hosted an impromptu press conference today in an attempt to allay concerns that he would not push for a strong, science-based final text. He said his statements were misinterpreted, despite video evidence. He stated: “I have said over and over the phase-down and the phase-out of fossil fuel is inevitable. In fact, it is essential.”
COP28 mobilises more than $57bn in first four days
To mark finance day at COP28, the COP Presidency team sent a timely statement summarising what has been achieved so far at the Summit, and crucially how much climate finance has been mobilised.
We’ve already seen historic deals for loss and damage, more finance into the Green Climate Fund, billions poured into renewable energy and fresh funding to phase down on methane emissions.
Here’s a quick glance at the committed funding so far:
Loss and Damage: $725m
Green Climate Fund: $3.5bn – increasing to more than $12bn
Renewable Energy: $2.5bn
Technology: $568 million
‘Bespoke climate finance’: $30bn
Relief, Recovery and Peace: $1.2bn
Local Climate Action: $467m
Also today, the UN-convened Independent High-Level Expert Group in Climate Finance published its second report, confirming a need for a sharp increase in international climate finance this decade.
The report concludes that a fifteen-fold increase is needed in annual private climate finance to emerging and developing nations. We also need to see annual climate finance flows through multilateral development banks trebling and concessional finance growing five times over.
International export credit agency alliance launched to boost net-zero investment
UK Export Finance joined a host of national international peers today to launch a Net Zero Export Credit Agencies Alliance.
Backed by the UN’s Environment Programme Finance Initiative, the partnership seeks to improve collaborative action from export credit agencies and banks to fund the transition to net-zero emissions. It will be supported by the Glasgow Financial Alliance for Net Zero (GFANZ).
The alliance currently includes UKEF, Export and Investment Fund of Denmark (EIFO), Export Development Canada (EDC), and the Swedish National Export Credits Guarantee Board and Swedish Export Credit Corporation (EKN and SEK) as full members. ECAs from the UAE, Kazakhstan and Spain have also joined the Alliance as affiliates.
Tim Reid, CEO of UK Export Finance, said: “Export credit agencies play a crucial role in helping businesses to transition towards net-zero and shifting finance flows towards climate-friendly projects and investments. This new alliance mobilises export finance in support of a common goal: achieving global net zero by 2050 and limiting global warming to 1.5C. I look forward to working with UKEF’s counterparts around the world to support this journey.”
Plan for trebling renewables without harming nature promised
The Nature Conservancy (TNC) and Global Renewables Alliance (GRA) have announced a joint declaration to work together to develop, establish, and deliver on a five-point Global Action Plan on Tripling Renewables with a Nature Positive and Just Transition.
Just days after more than 100 countries signed up to a commitment to keep the 1.5C pathway of the Paris Agreement alive by tripling global renewable capacity and doubling energy efficiency by 2030, the two organisations are calling on nations not signed up to do so while promoting nature and the Just Transition.
“While global leaders must maintain the focus on phasing out fossil fuels, in parallel we need to act fast to triple renewable energy capacity before the end of the decade,” said Jennifer Morris, CEO of The Nature Conservancy. “Our work to accelerate renewable energy in North America, Europe, and India shows that this can be done in a way that supports a nature positive and just transition. This action plan provides a roadmap for how we can work together for a clean, green, and equitable energy future.”
Under the joint declaration, TNC and GRA will work together to accelerate action across five key pillars. These are: establishing international principles for nature and renewables, promoting renewables as a way to incorporate nature and social values, introducing support policies to help unlock market solutions, promote knowledge sharing and track and report the role of renewables in boosting nature.
“Tripling global renewable energy capacity by 2030 is the most impactful commitment governments can undertake to achieve a 1.5°C pathway,” said Bruce Douglas, CEO of Global Renewables Alliance.
“This would deliver cleaner electricity systems, access to affordable energy and green jobs for millions of people—and unlock billions of dollars in public and private capital to foster climate-resilient growth. This will crucially reduce loss and damage for nature. It is vital that renewable energy is an ally of nature as it develops to ensure that the renewables era is one marked by thriving biodiversity on land and in our oceans.”
New Taskforce launched for sustainability-linked sovereign financing for nature
Global public debt exceeded $92trn in 2022 and more than half of low-income countries are classed by the IMF and World Bank Debt Sustainability Framework as being at high risk or already in debt distress.
At COP28, nations outlined how sustainability-linked sovereign financing can be used to provide solutions for vulnerable countries fighting the climate crisis who are also at risk of debt.
The world’s top multilateral development banks have signed a joint declaration and launched a global “task force” to boost sustainability-linked sovereign financing for nature and climate.
The Taskforce will hold its first meeting in January 2024, and will be led by the Inter-American Development Bank (IDB) and the United States International Development Finance Corporation (DFC).
The World Bank has also expressed support for the Task Force and interest in collaborating to advance these efforts.
Bogolo Kenewendo, Africa director and Special Advisor to the UN Climate Change High-Level Champions, said: “Sustainability-linked sovereign financing offers innovative solutions for vulnerable countries facing the triple crises – climate shocks, biodiversity loss, and debt crisis. It does so by using credit enhancement mechanisms to lower borrowing costs and attract private investment. This Joint Declaration and Task Force is a critical effort forward towards addressing key barriers that will catalyze financial flows towards nature and climate adaptation goals.”
Carbon credit schemes seek to streamline work, as hot debates continue
Heated debates on nature-based carbon credits are raging at COP28. On the one side are those who think credits give nature-rich emerging and developing nations a chance to access new economic opportunities, pointing to $36bn leveraged over the past two years. On the other, those concerned that this is a land-grab for the 21st century, rich with potential for unintended negative social consequences, and an ‘get-out-of-jail-free’ card for wealthy, high-emitting nations.
There are, broadly speaking, two kinds of carbon markets – national markets in which countries produce and purchase, and voluntary carbon markets, in which subnational organisations such as businesses can buy offsets.
Bain and Company partner Dale Hardcastle said: “The voluntary carbon market has had a difficult year, with many of its flaws and weaknesses exposed. Unfortunately, high-integrity carbon markets, as well as the planet more broadly, have paid the price.”
In the hopes of creating a better year ahead for the market, six of its largest standards agencies (ACR, ART, CAR, GCC, GS, Verra/VCS) have announced a collaboration to align standards with common principles. These principles will cover topics including avoiding leakage, transparency and ensuring that projects have community benefits.
UN climate chief calls for more detail on women in climate plans
The COP28 Presidency has shoehorned several different themes into each day of its thematic agenda, running 3 December to 10 December inclusive. Alongside finance, trade and accountability, the theme for today was gender equality.
We know that women are impacted by physical climate impacts to a greater degree. We also know that they are under-represented in the COP process. CARE International has claimed that just 11% of the world leaders present at COP28, and just 38% of the climate summit’s wider registered delegates list of more than 100,000 attendees, are female.
Regarding the final COP texts and national plans under the Paris Agreement, UN climate chief Simon Stiell has noted that most countries (79%) do now include gender considerations in their Paris Agreement commitments, known as NDCs.
But he’s stating that there simply is not enough high-quality data for most nations to identify and implement the most impactful changes.