Fossils, Energy Transition, Climate Finance Challenges: Announcements, Expectations, and Realities
While the goal of limiting global warming to 1.5°C by 2100 required a 43% reduction in greenhouse gas emissions by 2030, current commitments from global states hover between -2% and -5%. This gap raises concerns about achieving these ambitious objectives in the next six years.
The core of the discussions revolved around fossil fuels, including coal, gas, and oil. Despite intense negotiations on terms like “reduction,” “exit,” or “substitution,” the final text adopted the concept of a “transition away from fossil fuels” in energy systems. However, the lack of a specific timeline for this transition is a cause for concern, especially given the steep climb needed by 2030.
Financing also emerged as a critical topic, with estimated needs of $2.4 trillion annually in developing countries by 2030.
A small success happened with the announcement of the creation of a “loss and damage” fund of $30 billion to help developing countries finance the damage caused by climate change. Countries like France, United Arab Emirates and Germany are each putting in around 100 million. That’s more than the United States, which is at around 20 million, or Japan at 10 million, for example. However, Developing countries and NGOs estimate that between 100 and 600 billion a year is needed, not millions, so between 200 and 1000 billion more than was promised in Dubai.
Energy Transition: Impacts and Opportunities for Businesses
The energy section of the text, known as the “energy package,” sets concrete goals, including tripling renewable capacities by 2030. Energy efficiency, widely praised, must increase from 2% to 4% annually during the same period. Nuclear power, alongside carbon capture, hydrogen, and electric transportation, enters the list of technologies to accelerate.
Implications for businesses are extensive, touching diverse sectors such as transportation, energy, livestock, and machinery production. The renewable energy boom provides companies with available land the opportunity to become electricity producers using sources like solar panels.
Outlook and Next Steps: What to Expect from COP 29?
In conclusion, COP 28 unveiled limited progress and persistent challenges. Major announcements in areas like agriculture and health may likely be deferred to COP 29 next year. Concrete action remains crucial in the face of climate urgency to meet set objectives and safeguard our planet.
To understand the direct impact on businesses, we invite you to watch our 7-minute summary video on COP 28.
