The 28th Conference of the Parties (COP28) occurred in Dubai between November 30 and December 12 and was a critical moment for the stocktake of global progress towards addressing the climate crisis and setting strategies for future climate action. To meet the 1.5°C target of the Paris Agreement, corporations, governments, philanthropies, banks, and venture capital investors will need to define a new climate economy.
Here are five major outcomes from this climate conference that will impact corporates.
The final agreement of COP28 now includes, for the first time, a commitment to a global energy transition away from fossil fuels to achieve net zero by 2050. This climate goal will require substantial private-sector investment and cross-sector collaboration. The circumstances of different countries need to be considered to ensure the timing and distribution of this transition are just and equitable.
To meet net zero by 2050, the IEA shows a pathway to get there that requires a 97% reduction in fossil fuel GHG emissions.
Some remaining questions include: How will this transition be achieved within its non-binding framework when fossil fuel demand is increasing? What role will carbon capture and management play in achieving these climate targets?
More than 100 countries agreed to triple their renewable energy capacity and double energy efficiency by 2030. The U.S. committed to $50 million in investment to support the supply of critical minerals needed for the green energy transition, but additional financing and development of countries sourcing the mineral supply is needed. The cost of integrating and deploying renewables deployment is also very high, so private sector financing and innovation will be critical to meeting goals.
Aligning with the Global Methane Pledge from COP27, 50 companies representing more than 40% of global oil production committed to zero methane emissions and ending routine flaring by 2030. The Oil and Gas Decarbonization Charter (OGDC) provides guidance for measuring, reporting, and reducing methane emissions and flaring practices. If fulfilled, these pledges covering the zero methane goal along with increased energy efficiency and reduced methane/flaring would cut 4 gigatons of carbon dioxide (CO2) equivalent.
More than 150 countries signed a declaration to include agriculture and farming industry emissions in national plans to mitigate climate change. A new $200 million enteric fermentation program was also announced, aimed at reducing methane emissions within the agriculture sector. Additionally, the US and UAE announced a partnership to advance clean solutions for climate-smart farming, contributing to the $17+ billion of increased investments in the Agriculture Innovation Mission for Climate (AIM) for Climate.
Significant finance needs to be mobilized to ensure that action on climate change is taken. The UAE President announced his creation of a $30 billion fund for global climate solutions, aiming to reach $250 billion in investment by 2030. The World Bank also committed to increasing their financing of climate-related projects by $9 billion annually. Business leaders will need to work with regulators and governments to gain access to investments by using innovative financing vehicles and developing public-private partnerships.
COP28 has set the direction for global climate action, emphasizing a significant shift away from fossil fuels and a substantial increase in renewable energy capacity. Only time will tell whether this direction is set into motion with concrete climate action. The private sector is at the forefront of the transformation, playing a crucial role in pioneering innovations and investments in renewable energy, methane reduction, and the decarbonization of the food and agriculture industry. Finally, the complexities of this transition will require substantial financing and equitable implementation driven by public-private partnerships and cross-sector collaboration.
To achieve these ambitious goals, reduce carbon emissions, and turn visions into action, companies will need accurate data-driven insights about their emissions. With our trusted sustainability software and LCA experts, we ensure that Chief Sustainability Officers have the tools they need to make the best business decisions.
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