“Historic” or “Historic Failure”? Fossil Fuels at COP28

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Another climate change COP has come and gone. As has become quite common by now, a complex set of intergovernmental negotiations are ultimately reduced to a fight over one particular issue. At the UN Climate Change Conference in Dubai, UAE (COP28), this issue was the phasing out of fossil fuels. The decision adopted in Dubai by parties to the Paris Agreement has both been lauded as “historic” and decried as a “historic failure”. So what did parties decide on fossil fuels, and what does it mean?

#FFPO: The Fight over a Fossil Fuel Phase-out

Two years ago, I wrote about how the Glasgow Climate Conference (COP26) broke a taboo on fossil fuels by calling for a phase-down of unabated coal-fired power and a phase-out of inefficient fossil fuel subsidies. However, the former commitment was criticised for its “phase-down” – rather than “phase-out” – language, and its omission of oil and gas, whereas the latter commitment introduced a loophole through the inclusion of the undefined qualifier “inefficient”.

In the two years since, a group of countries sought to correct this by pushing for a broader fossil fuel phase-out. At COP28, 127 countries expressed support for such language (albeit with some of them favouring the term “unabated fossil fuels”), up from 80 countries the year before. They were supported by many business and environmental NGOs, international organisations such as the World Health Organization, and UN Secretary-General António Guterres. In addition to this broad support, the unusually early adoption of a major decision on a new loss and damage fund meant that the question of phasing out fossil fuels would not be tangled up with another contentious issue.

Notwithstanding these relatively favourable conditions, it was evident that agreement on a fossil fuel phase-out would face major hurdles. There was widespread scepticism about whether the UAE COP Presidency – headed by the CEO of the country’s state-owned fossil fuel company – would push for the issue. Resistance was further to be expected from OPEC members. Indeed, during the conference these countries were instructed by the OPEC Secretary-General to resist any phase-out language. Developing countries were also hesitant, and sought assurances by developed countries to scale up financial support for the just energy transition.

A few days before the end of COP28, hopes went up that the final outcome would include a phase-out commitment when a draft text was released that included several options to do so. Yet a subsequent draft dashed those hopes by not only removing any phase-out language, but also presenting options related to fossil fuels as a menu that parties could choose from.

The COP28 Decision

Following significant backlash against this draft, among others by small island states and the EU, the UAE COP Presidency tabled a compromise decision, which parties ultimately adopted.

Paragraph 28 of this decision:

calls on Parties to contribute to the following global efforts, in a nationally determined manner, taking into account the Paris Agreement and their different national circumstances, pathways and approaches:

(b) Accelerating efforts towards the phase-down of unabated coal power;

(d) Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science;

(h) Phasing out inefficient fossil fuel subsidies that do not address energy poverty or just transitions, as soon as possible;”

First, the good news: for the first time in three decades countries recognise that a transition away from fossil fuels is needed to respond to climate change. Parties also acknowledge that action should be taken “in this critical decade”, which is important given the rapidly diminishing carbon budget to keep the global average temperature increase below 1.5°C. The addition of the goal “to achieve net zero by 2050” offers further detail on the timeframe for actions to move away from fossil fuels. The reference to science further suggests that parties’ decision-making ought to be informed by the latest scientific insights. This matters because such insights offer a clear indication of what is required. For instance, in scenarios that keep warming below 1.5°C, coal, oil, and gas supply decline from 2020 to 2050 by 95%, 62%, and 42%, respectively. Lastly, with regard to phasing out fossil fuel subsidies, a modicum of urgency is provided through the addition of “as soon as possible” compared to the formulation in the Glasgow Climate Pact, which included no timeframe whatsoever. However, the commitment still applies only to “inefficient” subsidies.

Unsurprisingly, there are also several weaknesses. First, there is an ambiguous reference to “energy systems”. It is unclear if this refers only to the power sector, or also includes other sectors such as transport (a major user of oil and gas) and industry (which uses, e.g., coking coal for steel production). Second, there are no clear targets and timelines that would offer guidance on the pathway countries should follow in transitioning away from fossil fuel production and use. Third, other parts of paragraph 28 open the door to technologies such as carbon capture and storage that would allow for the continued use of fossil fuels, even though there are concerns about the lack of scalability and costs of such technologies. Moreover, paragraph 29 of the decision explicitly refers to the role of “transitional fuels” in the energy transition, which can be seen as an implicit endorsement of gas as a bridge fuel, something that remains highly contested.

Problematically, the decision also does not clearly differentiate between developed and developing country Parties, and fails to call for financial support for developing countries to realise a just energy transition. Pursuant to Article 3(1) of the Climate Change Convention, developed countries ought to take the lead in a transition away from fossil fuels, but major fossil fuel producers in the Global North, including the United States, Norway, and the United Kingdom, still have shown no interest in restricting fossil fuel supply. Meanwhile, fossil-fuel producing countries in the Global South face adverse consequences if they seek to reduce their fossil fuel dependency. For example, Environment Minister Susanna Muhamad of Colombia – a country that has pledged to end fossil fuel exploration – noted that the decision by the country to rid itself of fossil fuels was followed by a downgrading of its currency and credit rating. Developing countries that are making a genuine effort to transition away from fossil fuels require support, but the decision fails to make a direct link between mitigation commitments and financial support.

What Are the Implications?

According to a UNFCCC press release, COP28 signals the “beginning of the end” of fossil fuels. The decision does offer an indication that the world will move away from fossil fuels, and could be understood as a stark warning to investors to avoid stranded fossil fuel assets. However, it is unclear how strong this signal will be: many nations still plan to expand fossil fuel production, and investment levels for fossil fuels remain high. Even the country brokering the COP28 deal has indicated it will not scale down its fossil fuel investments.

But the decision may also have other implications. A COP decision, as such, is not legally binding. However, unlike the COP26 decision, where language on coal-fired power and fossil fuel subsidies was included in a “cover decision” – a decision unrelated to specific negotiation agenda items, driven primarily by the COP Presidency – the fossil fuel phase-out debate became part of the negotiation of the outcome of the first “global stocktake”, a five-yearly process in which parties assess collective progress towards the long-term goals of the Paris Agreement. This means that countries are under an obligation (“shall”) to be informed by the decision when updating or enhancing their “nationally determined contributions” (NDCs), which are due in 2025. When submitting their new NDCs, parties are also required to explain how they have taken the outcomes of the global stocktake into account in their NDC preparations. Although this falls short of requiring parties to develop a plan or set targets for transitioning away from fossil fuels in their NDCs, it does offer a hook for progressive domestic constituencies to push for phasing out fossil fuels in the next round of NDCs.

Another way through which the decision could generate legal effects is through domestic or international court cases targeting fossil fuels. In particular, it could strengthen the hand of litigants that seek to challenge new fossil fuel infrastructure or projects. At present, such cases draw on scientific evidence to demonstrate the risk of fossil fuels for achieving climate change goals. The COP28 decision complements this scientific argument as it documents governments’ acknowledgement that a transition away from fossil fuels is a key mitigation measure to keep warming below 1.5°C. It will be difficult for a government to defend approving a new coal mine or providing a license for new oil and gas exploration (or related infrastructure such as gas pipelines) if it has simultaneously called for transitioning away from fossil fuels.

Looking Ahead

COPs are easily derided as large-scale spectacles that do not deliver the action required to avert dangerous climate change. Critics looking at COP28 can easily point to the usual flaws of the international climate change negotiations: a small group of countries blocking a decision sought by a larger group of countries; the watering down of decision text; and a lack of overall ambition whilst climate change impacts are becoming increasingly visible. It is therefore unsurprising that calls for alternative approaches, such as a fossil fuel treaty, have found resonance.

However, it should be borne in mind that COPs are ultimately a platform for intergovernmental consensual negotiations, and that any COP outcome is very much shaped by the current balance of political power within and across key countries. A primary function of the international climate negotiations is therefore to provide additional ammunition to pro-climate constituents. The COP28 outcome does so to a greater extent than could have been expected given the presence of fossil-fuel producing nations and interests in the negotiations.

Ultimately, whether – and how fast – countries phase out fossil fuels will not be determined by a COP decision alone. It will rather depend on the rapidly changing economics of renewables versus fossil fuels, and on domestic politics and the power of fossil fuel industries. But the COP28 decision in part reflects the waning global status of fossil fuels, and in part helps accelerate this change.

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