COP28? I’m staying home.
The annual COP summit has grown beyond its original purpose, an event “where Parties (governments) assess global efforts to advance the key Paris Agreement aim of limiting global warming to as close as possible to 1.5 °C above pre-industrial levels.” With the 1.5 centigrade goal in the rearview mirror and our oil tanker sailing straight into the melting glacier, as no real or brave decisions are made during the month-long festival, I thought it would make more sense to stay home.
Particularly for Israeli climate entrepreneurs and startups, staying home means more than going to Dubai. It signifies that you’re prioritizing work over PR, that you’re staying relevant to your people during a time of war, and that you don’t let the governmental delegation showcase your work to hide their lack of policy and ambition.
Enough negativity for today. If you are going to COP28, or just watching it from your upcycled retro couch, here are a few interesting things to keep an eye out for.
The stocktake
This review event takes place every 5 years, and will be held during COP28. Its purpose is to survey where each and every country and survey made progress towards climate goals, and where they did not. As we already know, our ambitions and performance are lagging beyond what they should have been, so expect the stocktake to be sad.
For those less acquainted with UNFCCC and COP, some of the “parties” are countries like Russia, China, Turkiye and the USA, and other “parties” are negotiation groups that consist of several countries that are either in the same region, or share the same level of economic development, or similar economic interests. Besides the climato-economic interests, I find this grouping system as a “Rosetta stone” for other geopolitical aspects, too.
During the stocktake negotiations, the parties will discuss horizontal, “meta” issues which affect other topics of the COP agenda, like whether natural gas could be considered a transformation energy source, or differential goal-setting for developing and developed countries. Each party was required, prior to the Conference, to indicate its position and priority on a set of issues, and as it seems now, the most controversial issues are the differentiation of goals and outcomes by equity, and the commitment to set outcomes that lead to the 1.5 goal. In other words, the main question in the stocktake loops back to COP’s raison d’etre…
Money talks
The climate crisis is a physical manifestation of a socio-economic failure. Ignoring the human impact on the atmosphere and nature got us to this point, and aligning our financial systems with the planet are, in my opinion, our only way out. All the EVs, solar panels, CDRs and Greta’s won’t help us if we don’t change some core principles in the capitalistic economy.
COP28 will host a series of financial discussions. Also here, the parties are divided, and each will try to get the best “deal” that will suit not only its climatic ambitions but also its economic growth aspirations. Developing countries hope to continue growing and minimize their obligation to climate-finance alignment. Between the developed and rich countries, some are more ambitious than others, and they’ll try to make sure that everyone’s participating (=paying) equally.
The dramatic discussions are around Article 2.1(c) of the Paris Agreement, “making finance flows consistent with a pathway towards low greenhouse gas (GHG) emissions and climate-resilient development”. Assuming an ongoing, extended commitment to the 1.5 centigrade goal, this article says, basically, that the financial system must align with the goal. The planned discussions cover the question whether Article 2.1(c) should be adopted as-is as a definition for climate finance, or it should be defined better: more explicit, with more attention to the expected outcome, and with higher granularity to represent the difference in the financial capability and responsibility between countries of different levels of development.
Another term pending clarification or reassessment is “the contributor base”, which defines which countries should provide money to finance the economic transition. As you may expect, today those countries are the US, Canada, the EU, Australia and a few other rich countries, who will vouch for the expansion of the contributor base to other countries that are also rich but probably less ambitious. This will be a challenging moment for the host of the conference and the Arab Group which are against this expansion, although GDP-wise they should have been included a long time ago.
While last year’s COP dedicated attention to “loss and damage”, this COP’s finance talks will double down on the eternal climate debate of mitigation and adaptation. Developing countries and countries at risk of severe impact from climate change will try to push for bigger funding of their climate adaptation, sourcing the budget from the already-developed countries. Oil and gas producing countries will, surprisingly, support them, as they still prefer to monetize fossil fuel and let the world adapt to the new reality.
The economic differences between countries could also be seen in their approach to setting post-2025 financial goals, and defining who will sponsor them. This micro-cosmos includes questions like whether loss and damage should be counted into the financial goals, and whether the ambition should lean towards the economic need of under-developed countries, or to strict scientific objectives.
What else to expect?
COP28 will cover a wide spectrum of topics, including land-use and forestation, adaptation, energy, “Article 6” (the duties and commitments of each country and the mechanisms to coordinate the global effort), and more. There will also be thousands of side events, talks, expos and shows, both in the green zone and the blue zone.
I like following the financial topic because for two main reasons. First, it’s a concentrated dose of climate policy and it wraps up climate ambitions with economic and geopolitical interests — in other words, it’s the bridge between climate aspirations and real life politics. Secondly, it’s the ultimate challenge for countries to put their $ where their words are, so whatever isn’t financed, would is in high likelihood of not happening.
I’m staying home. I’ll watch COP on TV and follow it through the media, and I’ll try to share more thoughts here as the conference unfolds. I really recommend climate entrepreneurs and innovators to follow this annual event carefully, not because it’s a fantastic opportunity to engage with like-minded people and showcase your technology, but because it will define the financial terms of the game we’re playing in.
