Deal in Dubai as COP28 leaders agree to ‘transition away’ from fossil fuels

Leaders and representatives at the COP28, the United Nations climate conference currently taking place in Dubai, have approved a deal that urges the international community to start moving away from fossil fuels.

The agreed text calls for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner."

It urges countries to accelerate its shift towards clean energy this decade, with the aim to reach net zero greenhouse emissions by 2050.

The deal came after 24 hours of frenzy talks which went deep into the night. Sultan Al Jaber, COP28's president, announced the agreement under loud applause and called the final text "historic".

His sentiment is shared by many delegates at the climate summit as they pointed out Al Jaber and his team of negotiators managed to bring large, oil-producing countries such as Saudi-Arabia, the UAE, Iran, Nigeria and Angola in line with nations that are pushing for a complete phaseout of coal, oil and natural gas, such as most European countries.

Al Jaber told a packed conference hall in Dubai: “Through the night and the early hours, we worked collectively for consensus. The presidency listened, engaged and guided. I promised I would roll up my sleeves. I promised I would be with you. You did step up, you showed flexibility, you put common interest ahead of self interest. Let us finish what we started. Let us unite, act and now deliver.”

He then told the plenary: “We have the basis to make transformations change happen. Let us finish what we have started”

Delegates burst into a long applause, as Al Jaber continued: “We have delivered a robust action plan to keep 1.5c in reach. It is a balanced plan that addresses emissions… it is built on common ground. It is strengthened by full inclusivity. It is a historic package to accelerate climate action."

The COP28 summit was then told: “For the first time, we deliver on methane and emissions. We have language on fossil fuels in our final agreement for the first time ever.”

However, Al Jaber did stress: “Let me sound a word of caution. Any agreement is only as good as its implementation. We are what we do, not what we say. We must turn this agreement into tangible action."

He also stressed that “we have reframed the conversation around climate finance. We have integrated the real economy into the climate challenge.”

Al Jaber's speech ended with a standing ovation, after which UN climate chief Simon Stiell took to the stage.

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'Beginning of the end'

After hugging Al Jaber, he told the auditorium that he said “this is the beginning of the end for fossil fuels. All parties must agree on every word, every comma, every full stop. Indeed, it underscores how much these UN conferences can achieve.”

Stiell declared: “We must get on with the job of putting the Paris agreement to full work. In early 2025, countries must deliver new NDCs. It must bring us into alignment with a 1.5C world. We will keep working to improve the process.”

He claimed that “without these conferences we would be headed for 5 degrees. We’re currently headed for 3 degrees. We are still in this race. We will be with you every step of the way.”

Negotiations were tense and uncertain until the very end as all eyes were on the nitty gritty of the final policy documents: Should fossil fuels be phased out or phased down? 

While the difference might seem marginal, these words send important signals to global capital markets. The focus was also on reducing “unabated” fossil fuel emissions rather than simply emissions as a whole, a draft policy document revealed on Monday.

This sparked a row between nations, with Australia, the US, UK, Canada and Japan refusing to co-sign the statement, describing it as “a death certificate for small island states.”

The leaked document was strongly condemned by climate activists and diplomats across the globe. Former US presidential candidate and climate campaigner Al Gore warned that the summit was now “on the verge of complete failure”, accusing the policy document to be "by the Petrostates and for the Petrostates".

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Last week, the expression fossil fuel phaseout was included in a draft version of the policy document, to the dismay of OPEC secretary general Haitham Al Gais, who urged OPEC members not to back a phaseout of fossil fuels.

Moreover, a coalition of more than 2,000 investors, politicians, executives, scientists, activists, and global faith leaders, including representatives from the Net Zero Asset Owner Alliance (NZAOA) called for a clear commitment to phase out fossil fuels.

But the broader context behind the row over phasing out fossil fuels was that many of the world’s largest economies, including some who are now urging for a clearer commitment to a phaseout, are still expanding their fossil fuel production.

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India, Russia and Australia are planning to increase their coal production within this decade while Saudi Arabia, the US, the UK, Brazil, Canada and Kuwait have confirmed oil expansion plans.

Also, the UAE, the host of this year’s climate summit, plans to drill 40% more oil by the end of the decade than it does now, according to forecasts by Rystad Energy.

This is despite the International Energy Agency (IEA) explicitly stating that in order to meet the 1.5 degree target, no new oil or coal production is required. The IEA instead warns that there is already an oversupply of fossil fuels.

Scrutinising today's deal in Dubai, Mark Kenber, executive director of the Voluntary Carbon Markets Integrity Initiative (VCMI) said in response to the final text "while there were many encouraging developments on carbon markets at COP28, the overall negotiations fell short of the mark." 

He told Net Zero Investor: "Achieving Paris Goals requires all flows of capital to be mobilized. The lack of agreement on Article 6 makes this much harder." 

'Finance the constant drumbeat'

In a response to the agreement, analyst Laura Sabogal Reyes, senior policy advisor at climate change think tank E3G, told Net Zero Investor that "finance was the constant drumbeat behind this COP, from the establishment of the Loss & Damage fund to the Global Stocktake’s final calls for scaled-up MDB finance, debt and tax reform." 

She said that "although we are far from bridging the financial gap that will enable the transition to a climate safe world, the inclusion of these provisions was unimaginable just a few years ago." 

Moreover, Reyes said "this deal paves the way for broader resource mobilization beyond the UNFCCC into next year’s World Bank’s Spring Meetings and the upcoming G20 Brazilian Presidency, as well as to ongoing initiatives like the UN Tax Convention and the recently-launched Global Expert Review on Debt, Nature and Climate championed by Colombia, Kenya and France."

However, she did add that "the missing element was a clear financial package for countries embarking on their energy transition as well as clarity about how to fill the adaptation finance gap."

Reyes argued that "to keep 1.5C within reach, leaving no one behind, developed countries must deliver the necessary essential concessional and grant-based resources to enable these pivotal transitions in developing countries.”

'The weakest we could have gotten'

While many commentators welcomed the deal, not all responses have been positive.

In a reaction to the agreement, Alex Rafalowicz, executive director of the Fossil Fuel Non-Proliferation Treaty Initiative, told Net Zero Investor that "having the words fossil fuels in the text is an important political signal, but it’s a far cry from the ‘historic’ outcome we were all expecting."

He added: "This is the weakest we could have gotten, it has all the intentionally vague words planted to deceive us, and is still very reliant on all the unproven technologies we want to avoid."

Meanwhile, Eduardo Giesen, Latin America and the Caribbean coordinator for the Global Justice group, shared with Net Zero Investor that he thinks that "once again, at COP28, the rich countries in complicity with the world’s economic elites, sacrifice the opportunity for real decarbonisation and a transition based on justice, equity, and sustainability."

Giesen called the agreed text "terrible" as he said it contains "misleading concepts like 'unabated fossils'."

He added: "Carbon capture and storage, hydrogen production, nuclear energy and others, increase climate vulnerability and lead to the violation of the rights of communities and nature in the Latin American and the Caribbean region as well as the entire Global South.”

The technology is indeed controversial. 

Hoesung Lee, chair of the Intergovernmental Panel on Climate Change, recently warned that banking on carbon capture was no free lunch and would lead to an overshoot in oil production, which would trigger more global warming.

Researchers also said that if carbon capture and storage underperforms by only capturing part of the carbon released into the atmosphere, it could amount to a “billion tonne carbon bomb” being released into the atmosphere.

“If carbon capture rates only reach 50% rather than 95% and upstream methane emissions are not reduced to low levels, this would pump 86bn tonnes of GHG into the atmosphere, equivalent to more than double the global CO2 emissions in 2023,” researchers for the think tank Climate Analytics stated.

“The term abated is used as a trojan horse to allow fossil fuels with dismal capture rates to count as climate action,” they warned.

US viewpoint

Nevertheless, John Kerry, the US climate change envoy and representing the world's largest market, embraced the agreed COP28 text.

“This is a document that reflects two years of work by all parties from every part of the globe... While nobody here will see their views completely reflected, the fact is that this document sends a very strong signal to the world. We have to adhere to keeping 1.5 in reach."

Kerry added that "in particular, it states that our next NDCs will be aligned with 1.5. It reflects what the science says, we have to urgently peak GHG emissions and have them fall.”

The US political veteran continued: “For the first time in the history of our regime, the decision calls for transitioning away for fossil fuels to achieve net zero by 2050," although he did acknowledge that "we would have liked clearer language about the need to begin peaking. We would know this was a compromise between parties.”

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