Cop 28 is an opportunity for Northern countries to recover a good part of the credibility lost compared to Southern countries after Covid, the energy crisis and the War in Ukraine. In this sense, according to a study by Bruegel, the relevant points to be able to evaluate the result of COP 28 would be:
- Greater ambition in decarbonization targets for 2030.
- An agreement to progressively reduce the use of fossil fuels and limit it to certain sectors and to increase energy efficiency targets before 2030.
- Advances in climate financing of developing countries by rich countries.
Latin America is the area in the world with the largest reserves of biodiversity and tropical forests, and it will have a special leading role in the UN climate summit being held in Dubai. The dilemma of regional governments is to reconcile developmental and environmental policies in fragile ecosystems that must be protected and preserved.
According to consulting firm McKinsey & Co., the following are some of the most important announcements from the first three days of COP28 in Dubai, and the key takeaways for organizations and policymakers:
Climate finance
UAE President Mohammed bin Zayed Al Nahyan announced a $30 billion fund for global climate solutions that aims to attract $250 billion in investments by the end of the decade. COP parties also pledged $700 million in financing to help low-income countries cope with loss and damage caused by climate change. The presidency also launched ten principles to make financing available, accessible and affordable.
The good news is that the world’s major economies are committing to net-zero emissions targets by 2050, while financial markets are rewarding sustainable technologies: IRENA says that in 2020, the S&P Clean Energy Index of clean energy stocks was up 138%, compared to the fossil fuel-heavy S&P Energy index, which was down 37%. Additionally, investment in clean technology creates three times as many jobs as fossil fuels per million dollars spent.
And after that?
• Governments will have to work to close the $18 trillion investment gap, prioritizing long-term gains over short- and medium-term costs. This means setting granular goals year after year to ensure promises are kept.
• The private sector will need to work with regulators and governments to unlock investment and find innovative instruments to ensure capital reaches the places that need it most. This includes moving beyond financing individual projects towards a more systematic approach, as well as consistently integrating carbon into decision-making and asset valuation.
• Multilateral development banks and other international financial institutions can redouble their efforts to improve access to finance, mitigate financial risks, increase concessional financing for blended instruments, and address debt in a sustainable manner.
• There is also an urgent need to increase financing for adaptation and resilience. In 2020, financing flows for climate adaptation and resilience reached only 10% of what was needed.
The future of food
More than 130 countries signed a declaration to include emissions from agriculture in their national plans to address climate change. Additionally, a group of more than 25 leading food and agriculture organizations joined forces to scale regenerative agriculture, partnering with 3.6 million farmers to accelerate the transition of more than 160 million hectares to protect soil and limit emissions. carbon.
And after that?
• Public climate finance needs to be rebalanced towards food systems, and companies will need to implement a strong engagement strategy between the Global North and South.
• Social equity should be at the center of adaptation, given the vulnerability of farmers and other local workers to changes.
• Food companies can invest in technologies and delivery models that prioritize climate-smart production of staple and non-staple foods, such as disease- and drought-resistant seeds.
• By diversifying their sourcing strategies and value chains, and reducing food waste, food companies can help stabilize food prices and protect against future crises.
Renewable energy
There are already around 170 countries out of the 195 currently recognized that have clean energy goals, made possible by the abundance of sustainable resources that are profitable and can be scaled up, and decarbonization is directly linked to electrification. Of all of these, 118 countries have agreed new targets to triple renewable energy generation capacity to 11,000 GW and double energy efficiency in this decade.
And after that?
• The objectives can only be achieved with strong government support and sufficient funding. The task for countries now is to ensure that appropriate policies and regulations support investment cases, including for network infrastructure. Organizations can also expedite permitting and reduce planning time to streamline the process.
• Utilities must be prepared to respond to a supply signal from governments for grid investments and capacity upgrades, without overlooking the importance of grid infrastructure for a successful energy transition.
• Scale is key to reducing costs and prices and driving efficiency. Supply chains will also need to be expanded and more engineers trained.
Methane reduction
Fifty oil and gas companies committed to reaching near-zero methane emissions by 2030 and presenting a plan to meet those goals by 2025. A fund was also announced for methane reduction projects in emerging markets and developing economies. The group of fifty companies also agreed to reduce net greenhouse gas emissions from their operations to zero by 2050.
And after that?
• Methane reduction is the most effective lever to quickly stop temperature rise, and 70% of energy-related methane emissions can be reduced with existing technologies and changes in operating practices. The methane fund should be leveraged to accelerate the implementation of methane reduction projects.
• Technology for methane leak identification, measurement and analysis, as well as physical solutions such as replacing high-bleed pneumatic controllers, may require concessional financing for lenders.
• Mitigating emissions is often commercially viable through capturing and selling methane, and the private sector, governments and multilateral development banks will have to work.
Well, great. Now we know what to do. But at this moment the big question arises: Will we be able to do what we said had to be done? Won’t what has already happened other times happen, that we stay halfway?
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