Phasing out or down?
More than 115 countries have pledged to triple their renewable-energy capacity by 2030. Twenty countries have also committed to increase their nuclear capacity two-fold by 2050. Accelerating the low-carbon transition remains at the heart of COP. Yet the disagreements about how to achieve it persist. The question of whether to end using fossil fuels completely or capture the emissions with innovative technology is particularly heated. The COP28 president, Sultan Ahmed Al Jaber, highlighted that “the phase-down and the phase-out of fossil fuel is inevitable,” following his earlier remarks that suggested that limiting global temperature rise to below 1.5C does not require an end to fossil fuels. Meanwhile, UN secretary-general António Guterres, re-iterated that he is “strongly in favour of language that includes phase-out, even with a reasonable time framework. We have the potential, the technologies and the capacity and the money [...] The only thing that is still lacking is political will.”
It’s an existential question
Many discussions have reflected the urgency with which the impacts of climate change are treated at this COP. Economist Impact participated in the Munich Security Conference event, where participants discussed how climate action and security are linked and affect some of the most vulnerable communities, particularly in the global south. Climate-induced floods in Pakistan last year, and droughts in the Horn of Africa, have driven local instability and mass migration. Nevertheless, some participants expressed concerns about excessively “securitising” the climate-action dialogue.
More than 115 countries have pledged to triple their renewable-energy capacity by 2030. Twenty countries have also committed to increase their nuclear capacity two-fold by 2050. Accelerating the low-carbon transition remains at the heart of COP. Yet the disagreements about how to achieve it persist. The question of whether to end using fossil fuels completely or capture the emissions with innovative technology is particularly heated. The COP28 president, Sultan Ahmed Al Jaber, highlighted that “the phase-down and the phase-out of fossil fuel is inevitable,” following his earlier remarks that suggested that limiting global temperature rise to below 1.5C does not require an end to fossil fuels. Meanwhile, UN secretary-general António Guterres, re-iterated that he is “strongly in favour of language that includes phase-out, even with a reasonable time framework. We have the potential, the technologies and the capacity and the money [...] The only thing that is still lacking is political will.”
It’s an existential question
Many discussions have reflected the urgency with which the impacts of climate change are treated at this COP. Economist Impact participated in the Munich Security Conference event, where participants discussed how climate action and security are linked and affect some of the most vulnerable communities, particularly in the global south. Climate-induced floods in Pakistan last year, and droughts in the Horn of Africa, have driven local instability and mass migration. Nevertheless, some participants expressed concerns about excessively “securitising” the climate-action dialogue.
To discuss the links between climate change and fragility in more detail, Economist Impact’s Phillip Cornell hosted a panel on “Transition and Fragility” in collaboration with the We Mean Business Coalition (WMBC). The panellists included Ala Qasem, (presidential advisor, Yemen), Angela Homsi (CEO, Ignite Power), Anna Bjerde (World Bank Group), Gautam Narasimhan (UNICEF) and Sérgio Pimenta (IFC). The panel discussed the key challenges of transition in areas with weak governance or active conflicts, how low-carbon energy solutions can be effectively deployed in such areas, the financing gaps and the wider implications of development in such areas.
To discuss the links between climate change and fragility in more detail, Economist Impact’s Phillip Cornell hosted a panel on “Transition and Fragility” in collaboration with the We Mean Business Coalition (WMBC). The panellists included Ala Qasem, (presidential advisor, Yemen), Angela Homsi (CEO, Ignite Power), Anna Bjerde (World Bank Group), Gautam Narasimhan (UNICEF) and Sérgio Pimenta (IFC). The panel discussed the key challenges of transition in areas with weak governance or active conflicts, how low-carbon energy solutions can be effectively deployed in such areas, the financing gaps and the wider implications of development in such areas.
Money, money, money
Financial commitments are taking centre-stage in Dubai. COP28 announced that US$57bn in climate finance commitments have been made so far. The early support for the Loss and Damage Fund as well as the Green Climate Fund (GCF) came as a somewhat positive surprise. The Loss and Damage Fund—designed to help lower-income countries manage the damage caused by climate-change impacts—has seen more than US$720m in funding commitments, including US$100m from the UAE. Meanwhile, the US pledged an additional US$3bn to the GCF. The World Bank committed to increasing its use of climate finance, and to expanding clauses that allow countries hit by disasters to pause their debt repayments.
But this still falls significantly short of the vast financing needs for mitigation and adaptation to climate change, which are counted in trillions of dollars. Mobilisation of private funding and investment has therefore been one of the key talking points. Indeed, King Charles III of the UK, among other leaders, highlighted this urgent need: “Public finance alone will never be sufficient. But with the private sector firmly at the table and a better, fairer international financial system, combined with the innovative use of risk-reduction tools like first-loss risk guarantees, we could mobilise the trillions of dollars we need—in the order of 4.5-5trn a year—to drive the transformation we need.”
The UAE pledged to invest US$30bn in a new climate fund, in partnership with BlackRock and others, aiming to mobilise US$250bn for emissions-reduction projects in the global south by 2030. Financial innovation will have to play a role, too. The importance of natural capital and investment in nature-based solutions has been highlighted in numerous discussions by both private and public financiers.
Financial commitments are taking centre-stage in Dubai. COP28 announced that US$57bn in climate finance commitments have been made so far. The early support for the Loss and Damage Fund as well as the Green Climate Fund (GCF) came as a somewhat positive surprise. The Loss and Damage Fund—designed to help lower-income countries manage the damage caused by climate-change impacts—has seen more than US$720m in funding commitments, including US$100m from the UAE. Meanwhile, the US pledged an additional US$3bn to the GCF. The World Bank committed to increasing its use of climate finance, and to expanding clauses that allow countries hit by disasters to pause their debt repayments.
But this still falls significantly short of the vast financing needs for mitigation and adaptation to climate change, which are counted in trillions of dollars. Mobilisation of private funding and investment has therefore been one of the key talking points. Indeed, King Charles III of the UK, among other leaders, highlighted this urgent need: “Public finance alone will never be sufficient. But with the private sector firmly at the table and a better, fairer international financial system, combined with the innovative use of risk-reduction tools like first-loss risk guarantees, we could mobilise the trillions of dollars we need—in the order of 4.5-5trn a year—to drive the transformation we need.”
The UAE pledged to invest US$30bn in a new climate fund, in partnership with BlackRock and others, aiming to mobilise US$250bn for emissions-reduction projects in the global south by 2030. Financial innovation will have to play a role, too. The importance of natural capital and investment in nature-based solutions has been highlighted in numerous discussions by both private and public financiers.
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