If Not Now, When? Ambitious energy package is a must at COP 28

As COP 28 approaches, all eyes are on the energy sector. Amid a striking 91% of global carbon dioxide emissions originating from fossil fuels in 2022, the world is watching for an ambitious energy transition package at this year’s UN Climate Change Conference in Dubai.  

Many regard this year’s edition as the most important COP since COP 21, where governments adopted the Paris Agreement. The global stocktake, the Paris Agreement mandated inventory of global progress on climate action, is set to conclude in Dubai, with world leaders expected to present a political response. The global stocktake has already revealed that countries are not on track to meet the Paris Agreement’s mitigation goal of limiting global warming to 1.5°C. Rather, the world needs to move much faster to reduce emissions. 

In this context, COP 28 is a moment of reckoning for the energy sector. It presents a significant opportunity for governments to construct a credible and ambitious deal to dramatically step up climate action to speed up the energy transition. 

In the last year, discussions about phasing out fossil fuels and scaling up renewable energy have gained traction. The Dubai conference is a chance to build on this momentum. For an ambitious and robust energy package at COP 28, governments need to step up on five key areas. 

1. Agree to phase out fossil fuels 

It’s clearer than ever that the world needs to get off fossil fuels—and fast. This year’s Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report Synthesis highlighted the need for a rapid global phase-out of unabated fossil fuels and a near-term peak in their consumption if the 1.5°C guardrail is to remain within reach. Last month, the International Energy Agency reaffirmed that there is no room for new oil and gas fields in a 1.5°C-aligned pathway, a conclusion supported by many other scenarios.  

But fossil fuel phase-out at the pace and scale required is, in fact, not “inevitable,” as the COP 28 president suggested in June. The UNEP’s recent The Production Gap report showed that while coal, oil, and gas supply and demand must decline “rapidly and substantially” between now and 2050, governments are still planning to produce around 110% more fossil fuels in 2030 than would be consistent with limiting warming to 1.5°C. 

COP 28 presents an opportunity for governments to correct course and send strong signals to corporations and financial institutions to stop investing in fossil fuel expansion.  

In Glasgow in 2021, COP 26 called on countries to “phase down” unabated coal power and phase out “inefficient” fossil fuel subsidies. Building on this landmark statement, at COP 27 in 2022, around 80 developed and developing countries supported India’s call to phase out all fossil fuels, not just coal.  

The momentum behind the call to phase out all fossil fuels has only grown since COP27. In May, the G7 committed to “accelerat[ing] the phase-out of unabated fossil fuels.” The High Ambition Coalition has repeatedly called for fossil fuel phase-out. The global stocktake technical synthesis report, which summarizes the science showing what’s needed to get on track with Paris Agreement goals, was very clear that phasing out all unabated fossil fuels is necessary to achieve net-zero. The European Union (EU) has made fossil fuel phase-out a key pillar of its COP 28 strategy. More than 100 companies have also backed the push for fossil fuel phase-out. 

However, several players are taking a stand against this position. The G20 was unable to agree on fossil fuel phase-out due to push-back from Saudi Arabia and several other countries. Meanwhile, China’s climate envoy has said that fossil fuel phase-out is “unrealistic.” 

A key debate will revolve around the inclusion of the word “unabated.” Agreement on phasing out “unabated fossil fuels” would leave room for new fossil fuel plants equipped with carbon capture and storage (CCS) technology. However, there is a lack of evidence on the efficacy of CCS—the IPCC found it has limited emissions reduction potential—and IISD analysis shows that CCS is not a promising solution for the oil and gas sector. Besides, there are already feasible, effective, and cost-efficient alternatives to produce power. Fifteen members of the High Ambition Coalition, including France, Kenya, the Marshall Islands, and the Netherlands, have indicated they will oppose the inclusion of the word “unabated” in any COP 28 decision. 

A credible and robust decision on fossil fuel phase-out at COP 28 would include all fossil fuels, not just “unabated,” and be worded as “phase out,” not “phase down.” 

2. Agree to triple renewable energy and double energy efficiency 

Alongside fossil fuel phase-out, a 1.5°C-aligned energy transition also requires a rapid scaling up of renewable energy capacity and energy efficiency. The International Energy Agency has indicated that the world must triple its renewable energy capacity and double the rate of energy efficiency improvements by 2030.  

The momentum behind this call has snowballed in 2023. Led by the United States, the EU, and the UAE, more than 60 countries now back a commitment to triple renewable energy and double energy efficiency at COP 28. This pledge would be structured as a political declaration, although these countries would also push for language in a formal COP decision.  

COP 28 is a critical moment to tip the policy and investment landscape further in favour of renewables and efficiency—especially in developing countries, an essential part of the COP 28 energy package. In implementing any such agreement, governments must be cautious that the significant increase in supply of the transition minerals required for renewable energy is properly managed, including policies to safeguard against social and environmental risks of mining and ensure local communities benefit. 

3. Implement commitments to end finance to fossil fuels and scale up financing for clean energy 

Rapidly scaling up renewables and energy efficiency will require serious investment. The International Renewable Energy Agency estimates that global clean energy investment needs to quadruple to around USD 5 trillion a year on average between 2023 and 2030. Financing is particularly needed in emerging and developing economies other than China, with Africa currently only attracting 3% of global clean energy investment.  

It’s not until COP 29 that countries are due to agree on a “new collective quantified goal” to replace the USD 100 billion per year by 2020 goal for climate finance from developed countries to developing countries. That said, COP 28 is a key milestone to check the progress of negotiations on the new goal.  

A large chunk of the required clean energy investment could be freed up by shifting public money away from fossil fuels. At COP 26, countries agreed to pursue the phase-out of inefficient fossil fuel subsidies, and they repeated this commitment at COP 27. However, in 2022, fossil fuel subsidies from G20 countries skyrocketed to a record USD 1 trillion. 

COP 28 could make progress on ending fossil fuel subsidies: decision text should drop the qualifier “inefficient” and instead name exceptional cases when subsidies could be considered justifiable. In this vein, the EU is calling for a phase-out of subsidies “which do not address energy poverty or just transition.” Countries should also set a deadline for ending subsidies. A 2025 deadline, like the G7 set in 2016, would be appropriate for developed countries. Finally, commitments should go beyond just subsidies to address all financial flows, including public finance and investments through state-owned enterprises. 

4. First-mover coalitions should demonstrate progress 

Away from the formal negotiations, three key country groupings have the opportunity to demonstrate progress at COP 28: the Powering Past Coal Alliance, Beyond Oil and Gas Alliance, and Clean Energy Transition Partnership (CETP). All three groups have committed to advancing the transition away from fossil fuels or, in the case of the CETP, shifting public finance from fossil fuels to clean energy. 

It’s important for all three alliances to show momentum at COP 28, such as by announcing new members. 

5. Any new commitments from energy companies should be credible and robust 

Sultan Al-Jaber, the COP 28 President, has mentioned plans to launch a new oil and gas sector alliance at the conference, to be called the Global Decarbonization Alliance. The alliance will reportedly set a goal of reaching net-zero scope 1 and scope 2 emissions by 2050—excluding scope 3 emissions, which result from burning fossil fuels and account for 80%–95% of oil and gas sector pollution. The group is also expected to commit to progressive targets for reducing methane emissions from upstream production.  

The UN High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities, tasked with developing stronger and clearer standards for net-zero emissions pledges, has made it clear that credible oil and gas sector pledges must commit to ending exploration for new oil and gas fields, the expansion of oil and gas reserves, and oil and gas production. Companies must also commit to publishing trackable plans showing how they will cut their emissions (from all scopes) by 2025 and reach net-zero by 2050. 

With ambitious options for a COP 28 energy package on the table, it’s critical that inadequate initiatives are not allowed to hamper momentum. 

The stakes are too high for half measures—COP 28 must deliver the full package 

Scaling up renewable energy and phasing out fossil fuels are two sides of the same coin—COP 28 must deliver on both. A deal to triple renewable energy capacity and double energy efficiency, without a corresponding agreement on fossil fuel phase-out, would not fulfil COP 28’s full potential. Shifting public financial flows away from fossil fuels is essential to turn words into action. And first-mover coalitions and other groups have an important role to play in raising momentum—not undermining it. 

The time to act is now. The global stocktake has laid bare the course correction governments must make to safeguard our future. Countries must use COP 28 to match global ambition to the urgency of the task at hand.