Key issues for directors to watch at COP28

This year’s COP28 climate negotiations are considered ‘absolutely critical’ for the world to limit global temperature rise to 1.5°C. But what are they likely to achieve? We dig into some of the issues world leaders are expected to address and what this means for directors.

COP28 is happening at a time when governments and companies are navigating conflicting demands. The global economic growth outlook is weak, geopolitical tensions abound and some governments, including the UK, are walking back previous climate commitments.

Yet limiting global warming to less than 1.5°C requires a coordinated and urgent political response, making the forthcoming summit ‘absolutely critical’ according to US Climate Envoy John Kerry. This is underscored by a recent study which found the world is warming at a faster rate than at any point in recorded history.

What is COP28?

The 28^th United Nations climate change summit (COP28) will convene in Dubai from 30 November to 12 December. The summit will bring together leaders and representatives from almost 200 state parties to the United Nations Framework Convention on Climate Change (UNFCCC).

As summit hosts, the United Arab Emirates wants governments to deliver on past promises and have set four priorities for COP28. These include reducing emissions before 2030 through fast-tracking the energy transition and negotiating a deal to adequately finance developing economies vulnerable to the physical impacts of climate change in order to respond and adapt to this risk. Other priorities include nature and inclusive communities and a just transition.

What are key issues to watch at COP28?

Global stocktake

At COP28, governments will respond to the first global stocktake. The global stocktake is an accountability mechanism developed to track progress towards achieving the Paris agreement goal of limiting warming to 1.5 °C.

The global stocktake synthesis report released in September 2023 shows progress is not on track to meet the Paris Agreement goals and warns the window for action is closing. At COP28 governments are expected to negotiate a roadmap to accelerate action.

Climate finance – loss and damage fund
At COP27 in Egypt, countries agreed to create a fund to assist ‘developing nations, especially those that are particularly vulnerable’ to climate change, with the details to be decided in Dubai.

It is estimated that more than USD2 trillion in climate finance is needed to support developing nations to respond to climate change, many of which are the most vulnerable to the physical impacts.

Wealthier countries have consistently failed to meet their climate-finance pledges of providing USD100 billion in climate finance annually by 2020. Pre-COP28 negotiations indicate the fund will be established but will be voluntary and housed with the World Bank for four years.

Adaptation
Climate adaptation includes actions that reduce community and ecosystem vulnerability to the harmful effects of climate change, such as sea-level rise or more intense extreme weather patterns.

It is anticipated that COP28 will establish a framework for the Paris global goal on adaptation that will clarify how local communities, cities and agricultural areas can be supported to measure and enhance adaptive capacity and grow climate resilience. The adaptation finance needs of developing countries are 10-18 times the current levels of public international adaptation finance, according to the UN Environment Programme.

Australia’s Assistant Minister for Climate and Energy, Senator Jenny McAllister, has been facilitating consultations on adaptation in pre-COP consultations. Supporting sustainable development and unlocking nature-based solutions is important to this goal, as is protecting food systems and forests.

Pressure to phase-out unabated fossil fuels

The complete phase-out of unabated fossil fuels is expected to be a flashpoint at the summit. Several European countries have joined with Pacific Island countries to call for a reduction of methane emissions to near-zero and an end to new coal production and any expansion of existing mines.

Australia’s climate role with Pacific neighbours

Ahead of COP28, Australia’s Prime Minister, Anthony Albanese, participated in the Pacific Islands Forum where climate change topped the agenda. Australia and Tuvalu announced the landmark Falepili Union treaty, which includes climate cooperation and allows for a special human mobility pathway for citizens of the low-lying island of Tuvalu to access Australia.

The Australian government is seeking to co-host COP31 in 2026 with Pacific Island countries. Pacific support for Australia’s bid is likely to be tied to Australia’s willingness to phase out fossil fuels and end subsidies for coal and gas projects. If successful, Australia’s targets and government and corporate progress on emissions reduction will come under renewed scrutiny.

As leaders prepare to gather, what is clear is that there is no silver bullet to put the world on track to meet the Paris Agreement temperature goals. A raft of policy action is required across capacity building, adaptation and finance, making all aspects of COP28 vital if negotiations are to be judged a success.

AICD members attending COP28 

As host member of the Climate Governance Initiative in Australia, the AICD is pleased to extend to our members access to several in-person networking opportunities at COP28. For our members scheduled to attend COP28 in-person and who are interested to be put in connection with other directors within the international CGI network, please contact CGI Australia lead Kulja Coulston, kcoulston@aicd.com.au.

For more information on COP28, the Climate Governance Initiative (CGI) international network has prepared a range of resources, including a pre-COP28 webinar and a COP28 briefing note for directors which includes key messages and opportunities to engage throughout the event. You can register for the post-COP28 CGI webinar on 14 December and follow the network news page online throughout the event.