The annual climate conference (COP28) concluded this week, and it succeeded in doing what few thought possible: saying the world needs to end the use of fossil fuels.
That achievement is all the more remarkable when you consider the persistent cloud of doom that shrouded the event. Whether it was worries the hosts were mainly interested in promoting fossil fuels or that corporations and investors were taking over the event, negative media reports were everywhere.
That didn’t keep participants away, however. A record-setting 90,000 people registered for COP28, according to a Reuters report that cited UN data.
The final agreement, which called for the world to “move away” from fossil fuels, was a significant accomplishment, and it might only have been possible because the conference was hosted by the UAE and chaired by the head of its national energy company.
The agreement was just one of several positive developments to emerge from Dubai. The conference also established a loss and damage fund to help poor countries cope with climate disasters, pledged to significantly reduce methane emissions and affirmed the role of nuclear power as a low-carbon energy source.
There were other important achievements too, mainly involving the private sector. Companies, tech firms, venture capitalists and other investors attended in record numbers, and brought the kind of networking and deal-making you’d expect. Sure, activists and some diplomats might grumble that COP28 resembled a trade show, but without private business and capital there won’t be a low-carbon future.
To that end, the UAE announced a new $30bn climate investment fund with several global private equity firms, a strong sign of its commitment – and the opportunities it sees in the sector.
There were disappointments, of course. Perhaps the biggest was the failure to reach agreement on strengthening the rules for the carbon-trading market. The voluntary market for carbon credits has significant flaws, chiefly a lack of common standards and transparency, and has been tarnished by high-profile scandals. Proposals to create a centralized UN-administered trading system for offsets, which would have brought greater integrity to the market, failed at the conference.
Without an agreement, the carbon trading market won’t develop as quickly, limiting its role as a means of accelerating the low-carbon transition, particularly in developing countries. Its failure is also likely to weaken confidence in the market, which has already been suffering from declining volume over the past year, as well as public skepticism. A strong and sustained communication strategy certainly could help but has been notably absent.
Still, mark us among the optimists for continued progress on carbon trading and the fight against climate change. Progress is never smooth or fast enough but it is progress all the same.