COP28 agreement marks a milestone but does not go far enough

The agreement reached this week at the U.N. Climate Change Conference in Dubai by nearly 200 countries calls on all nations for the first time to shift away from fossil fuels. While this marks a significant milestone, the accord falls short of what is needed in several ways and leaves too much room for interpretation.

The conference, officially the 28th Conference of the Parties (COP) to the U.N. Framework Convention on Climate Change, had been scheduled to end on Tuesday morning. However, with crucial wording in the consensus text still under dispute, delegates stayed on for an extra day and night of fierce negotiations.

Wednesday began with approval of a text known as the Global Stocktake. It recognizes that the world is not currently on track with the goal set under the 2015 Paris Agreement of limiting global warming to 1.5 C.

The new text underscores that to keep 1.5 C alive, emissions must be reduced 43% by 2030 and 60% by 2035 relative to 2019 levels and that net zero has to be reached by 2050. It is significant that the text clearly recognizes the findings of climate scientists, with reference particularly to the Synthesis Report to the Sixth Assessment Report of the U.N. Intergovernmental Panel on Climate Change released in March.

In addition, the text includes a key commitment by participating countries to triple global renewable energy capacity and double energy efficiency by 2030. Another critical provision calls for countries to "transition away" from fossil fuel energy by 2050.

That is significantly weaker language than many nations sought.

The Alliance of Small Island States, which includes the Maldives, Samoa and a number of other Asia-Pacific nations, had repeatedly made its position clear that a phase-out of fossil fuels should be included in the text. Its members were not present when the final text was adopted and later objected that it was insufficient to acknowledge scientific findings without setting a clear direction on necessary action.

During the final days of the summit, a number of major fossil fuel users and producers, including the U.S., Australia and the European Union, expressed support for a phase-out provision. But anything more ambitious than "transitioning away" from fossil fuels appears to have been too much to expect from talks hosted by a petrostate under pressure from certain fellow major oil- and gas-producing nations like Saudi Arabia.

A major sticking point for many developing countries opposing a phase-out was the absence of a commitment from richer nations to provide sufficient financial assistance for a full transition away from fossil fuels. Without that, a difficult transition could put many of their domestic priorities at risk, including human development and poverty eradication.

The final language on finance in the Dubai agreement did not address this concern sufficiently. Grant-based finance is already falling far short of what is needed, particularly for climate adaptation in developing countries.

However, the outlook for agreement on new long-term financing for climate action at next year's U.N. Climate Change Conference appears reasonably bright.

More generally, it is clear the international financial and economic architecture is not meeting the needs of developing countries that need to decouple their economies from fossil fuels. Elevated debt levels, unaffordable interest rates and currency risks are just some of the challenges developing countries face as they reduce their reliance on fossil fuels, as Colombian delegates emphasized in Dubai.

This problem also requires progress beyond the COP process and must be an element of discussions about reforming the World Bank and other multilateral development banks. Still, one thing that this year's climate change negotiations can claim as a historic achievement is the operationalization of a fund to address losses and damages in developing countries from climate change.

More than $700 million has been pledged by rich nations for this fund. This marks a promising start, but it is only a tiny fraction of the estimated $400 billion per year that is needed.

While the agreement at COP28 to transition away from fossil fuels represents a significant move, it remains incremental at a time when urgency is paramount. Diplomatic efforts may be in motion, but the pace is slower than the rate at which the Earth's carbon budget is being depleted.

Ultimately, emissions need to be brought into line with science. The compromises reached in Dubai should be only an interim step toward a full phase-out of fossil fuels. As U.N. Secretary-General Antonio Guterres said this week, "Whether you like it or not, a fossil fuel phase-out is inevitable."