A Landmark Consensus Amidst Contradictions & Lobbying At COP28

On December 13, COP28 concluded with a ‘historic’ consensus on transitioning from fossil fuels, and Sultan Al Jaber, the president of COP28, emerged as a key figure in this successful negotiation. Within 48 hours, on December 15, Al Jaber, who is also the chief executive of the United Arab Emirates’ national oil and gas company, asserted, “It is the demand that will decide and dictate what sort of energy source will help meet the growing global energy requirements.”

The contradiction was in the air, even before COP28, as a country heavily dependent on fossil fuels, was to be the host of the event. These negotiations usually focus on reducing dependence on fossil fuels as the key climate solution.

From the beginning, it was clear that Big Oil, some of the world’s largest publicly traded and investor-owned oil and gas companies, would try to leave its mark on the negotiations. It became further evident when it was reported that at least 475 lobbyists for carbon capture and storage (CCS) were active at the venue. Predicting the lobbying at COP28, the International Energy Agency’s Fatih Birol, in a webinar launching a report in November, called the idea of relying on CCS for ongoing oil and gas production while meeting Paris target emission goals a “pure fantasy.”  In 2022, the technology managed to capture just 0.1% of total energy-related emissions globally and is yet to prove its worth at scale.

But, CCS, with little success despite being discussed for several decades, managed to get space in the final draft in the call to parties to contribute to the global efforts for “accelerating zero- and low-emission technologies, including, inter alia, renewables, nuclear, abatement and removal technologies such as carbon capture and utilization and storage, particularly in hard-to-abate sectors, and low-carbon hydrogen production.”

Some experts say that these unproven and expensive technologies can be misused to further fossil fuel interests as countries can keep burning fossil fuels while claiming that the carbon is captured through CCS technology.

A section of economists has been trying to advocate inclusion of unaccounted benefits and impact to gain better understanding of a particular sector. For example, the impact of fossil fuel on society. GIST Impact released an estimate stating that the total externality costs arising from the oil and gas sector in 2022 are $4.4 trillion. This estimation includes the true cost of greenhouse gas (GHG) emissions on health, the environment and the economy. Based on these findings, economist and CEO of GIST Impact, Pavan Sukhdev, in a post on the social media platform, Linked In stated, “Society continues to bear immense hidden costs for the benefit of oil and gas companies and their shareholders.” He called for a commitment to phase out the use of fossil fuels in COP28.

In an interview with Mongabay India, in the run up to COP28, eminent environmental economist Professor Sir Partha Dasgupta emphasised the importance of capturing the true cost to make climate negotiations successful. The economic model used for climate change negotiations is based on the conventional GDP growth model practiced globally. However, this approach is flawed because it overlooks the significance of biodiversity and ecosystem services provided by nature, according to Sir Partha.

COP28, despite the presence of 2,456 fossil-fuel lobbyists, hosted by a Gulf country with an economy heavily dependent on fossil fuel, a call to resist anything related to fossil fuel in final commitment and six versions before reaching the final draft, agreed to “Transitioning away from fossil fuels in energy systems, in a just, orderly, and equitable manner.” There is no looking back from here.

The Dichotomy Of Climate Negotiations

Facing the challenge of conducting the first Global Stocktake and assessing progress toward the goals of the Paris Agreement, COP28 achieved consensus on operationalising the Loss and Damage fund established in 2022 in Sharm el-Sheikh, Egypt, on the very first day. This accomplishment was particularly crucial for vulnerable countries that face the larger impacts of climate change.

However, after this initial success, negotiations entered a tough terrain where parties found it difficult to build consensus on issues such as the first Global Stocktake (GST) under the Paris Agreement, the framework for implementing the Global Goal on Adaptation (GGA), the mitigation work programme, etc. The issue of phasing out fossil fuel and whether it should be part of the final draft or not, grabbed the attention of the entire negotiation.

Two sets of parties were opposing the phase-out of fossil fuel. One, economies heavily dependent on fossil fuels, and second, those having no means to transition from fossil fuels to cleaner alternatives.

Throughout the negotiation, concerns of developing countries related to growth within the limited carbon space were raised. There is a limited quota of coal, oil, or gas that the world can use to achieve its growth ambition. Research has highlighted that if one place produces more, another must produce less to keep the world’s overall trajectory of fossil fuel consumption going down. Research has also underlined that at least 62 emerging economies that have yet to achieve decent living standards, may face challenges in meeting their emissions reduction targets. However, at COP28, neither the negotiations nor any actions, signalled that countries agreed over equitable sharing of the carbon space.

Despite knowing these facts and the urgency of steps to fight the climate emergency, the richest countries were found bargaining for everything from carbon space to finance. The final draft, too, recognises the use of transitional fuels in facilitating the energy transition. Experts find the inclusion of transitional fuels a loophole as it gives developed countries an opportunity to keep using natural gas. Historically, the richest countries, overall, have reduced their emissions just by 7.4% to 8.8% over the two decades from 1990 to 2021.

In addition to agreeing on the inclusion of the term “fossil fuel” in the final text, the COP made progress on the Global Goal on Adaptation (GGA), Established with the Paris Agreement in 2015, the GGA aims at enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change. It helps put into action, the plans related to vulnerability and risk assessment, create multi-hazard early warning systems and create country-driven national adaptation plans with clear-cut deadlines. Here, too, the developing countries contended over equity principles and finance.

Unique In Many Ways

The COP28 will be credited for many firsts. For the first time, trade was featured as a theme in the conferences. The World Trade Organisation (WTO) Secretariat was active throughout the two-week-long event. On December 1, the WTO and the UN Food and Agriculture Organization (FAO) signed an agreement to boost cooperation on trade, food, and climate change. On December 2, the Secretariat launched Trade Policy Tools for Climate Action, offering governments a strategic toolkit to align with global climate targets. The publication talks about how the integration of trade policy options, like re-evaluating import tariffs on low-carbon solutions, will help economies mitigate the effects of climate change and adapt to its challenges. It also published methodologies to measure emissions from the steel sector and announced a review of progress on the implementation of the principles at COP29 next year. On December 9, it also published a report on global hydrogen trade and policies.

All these facts highlight WTO’s increasing activities in climate negotiations, which is different from the idea of this trade governing body, which was agreed upon by parties in its initial days. Developed and developing countries have different views about the WTO’s role in climate negotiations. The WTO allows exceptions for environmental concerns, letting members take trade-related steps to protect the environment. Developing countries, like India, do not prefer dealing with environmental issues in WTO, while developed countries have been aiming otherwise.

Similarly, for the first time, the link between climate change and food systems was prominently discussed at the COP. Around 158 countries endorsed the Emirates Declaration on Food and Agriculture. India chose not to sign the declaration on food and agriculture, sticking to its usual approach in international negotiations. This means it does not want to commit to specific timelines that might affect the country’s food security.

India chose not to sign the UAE Declaration on Climate and Health, which aims for better integration of health considerations into climate policy processes while designing the next round of nationally determined contributions (NDCs). Some 143 countries endorsed the declaration.

India also did not endorse the Global Renewable and Energy Efficiency Pledge, which commits to working together to triple the world’s installed renewable energy generation capacity and improve energy efficiency. These two issues are worth highlighting because the G20, which concluded in September under India’s presidency, emphasised the need for both goals, but India refrained from committing to them by signing the pledges in Dubai.

For the last three years, India has negotiated against using the term phase-out of coal and that explains why the country chose to be quiet in 2023. In 2021, India faced a standoff with major economies over the phase-out of coal. In 2022, at the climate summit in Egypt, India called for the gradual reduction of all fossil fuels and gained support from many other parties. In 2023, India appeared to play a passive role in the conflict over the call to phase out fossil fuels as bigger players were fighting whether fossil fuel phase-out should be part of the final draft. This strategy seemed to work in its favour when the final draft on coal at the Dubai summit remained the same as in the Glasgow text, using the term ‘phase down’ of unabated coal power, despite stiff attempts by developed countries to impose caps on any new or unabated coal power generation. Minister of Environment Bhupender Yadav deemed COP28 successful in achieving a balance between addressing climate change and the need for sustainable development.

As COP28 wraps up, each country takes home something, but we will only know the true impact on the environment in the coming years. Looking ahead, all eyes shift to COP29, set in Azerbaijan, a nation at the crossroads of Western Asia and Eastern Europe in the South Caucasus region and getting two-thirds of its GDP from oil and gas.