15. 12. 2023
AUTHOR: Linda Kalcher
For the first time, the UN climate talks have addressed the need to stop burning fossil fuels. COP28 was called ‘historic’ for recognising coal, oil and gas as the largest contributors to global warming. It marks the beginning of the end of the fossil fuel era. And yet, the deal was insufficient to keep the 1.5ºC temperature goal within reach.
Is there a chance to keep the 1.5ºC within reach?
Almost 200 governments agreed on a clear sense of direction ‘transitioning away’ from fossil fuels, ‘accelerating in this critical decade’ with a ‘net-zero’ end point for 2050. The ‘Dubai consensus’ calls for tripling renewable energy, doubling energy efficiency and using a variety of zero and low-carbon technologies to be deployed. The use of carbon capture and storage is limited to the hard-to-abate sectors. The signal is clear, it will be important that it is followed through by governments, board rooms and investors. Economic reality will limit the use of the false solutions that this text still enables, such as carbon capture and storage and so called ‘transition fuels’. Then the acceleration of the energy transition becomes a reality.
The text also highlights a list of financial system reforms to address concerns in developing countries on debt, cost of capital of zero-carbon technologies and investment needs. A lot of work can happen throughout the next year to start unlocking the almost 6 trillion US Dollars needed by 2030 to finance the transition. This is crucial to ensure all countries can benefit from the new industrial era. If countries are confident that they will have the financial support, they will set themselves ambitious 2035 climate goals. These shall be submitted in the form of nationally determined contributions (NDCs) between November 2024 and February 2025. These plans will inform domestic energy transition policies across the world but also allow for a solid analysis determining whether the world will be more on track towards a 1.5ºC pathway.
How did the EU perform?
- Bridge Builder for Success at COP
The EU has invested a lot in this priority, by being a reliable partner on finance and making early pledges into the new Loss and Damage Fund. In fact, the announcement of its establishment on the first day of the conference paved the way for rebuilding trust with the most vulnerable countries. In particular the Spanish presidency, Germany, France, Denmark, Ireland and the Netherlands have aligned with the small island developing nations and Latin American countries to achieve a meaningful outcome.
- Setting High Standards for Fossil Fuel Phase-Out
The EU has been consistent in demanding urgent action on fossil fuels ‘in this critical decade’ which has now been included in the final outcome. Also, the use of abatement technologies such as carbon capture and storage (CCS) has been limited to hard-to-abate sectors so they can’t be used to delay action. The final deal clearly includes the EU’s signature thanks to the strong alliance it built.
- Championing Renewables and Efficiency Pledge
The global pledge to triple renewable energy and double energy efficiency by 2030 has been signed by over 130 countries. This is a significant diplomatic success for the European Commission, as these goals are now included in the final outcome. While some of our expectations on a financial facility and secretariat have not been met, the Commission plans to provide over 2 billion EUR to support countries’ implementation of the pledge.
- Proactively addressing concerns by developing countries
Many countries were upset at what they perceive as “unilateral trade measures”, like the EU’s Carbon Border Adjustment Mechanism (CBAM). While the EU’s response was rather defensive, the final text now highlights the need for stronger cooperation instead. It is important that the EU creates new economic cooperation that benefits the partner country and discusses its policies more openly, also in platforms like the climate club or the critical raw materials club.
What does the outcome mean for the EU?
The EU’s diplomatic achievements in Dubai have the potential to turn into a blueprint on how to strengthen energy security, industrial competitiveness and societal prosperity. After championing 1.5ºC and a fossil fuel phase out in Dubai, it’s time for the EU to walk the talk. The EU can show credible leadership at home and submit its 2035 and 2040 targets in line with the UN deadline between November 2024 and February 2025.
In its upcoming 2040 plan, the European Commission can set clear trajectories on coal, gas and oil with limitations for CCS and a clear commitment to electrification powered by zero-carbon electricity. A new 2040 climate target can address the EU’s vulnerability to supply chain shocks, unreliable gas exporters and inflation driven by fossil fuels as our analysis shows.
Key milestones ahead:
- 18 December: The Environment Council agenda includes an exchange of view with European Scientific Advisory Board on Climate Change (ESABCC) on their recommendations for a 90-95% target for 2040,
- 16 January: Informal Environment Council under the Belgian EU Council presidency that provides an opportunity for debating what the Global Stocktake means for the EU at the margins,
- 6 February (tbc): European Commission publication on a new 2040 climate target, ideally with a clear 2035 milestone that gets included in the next EU NDC.
- 25 March: The Environment Council will discuss the European Commission’s 2040 climate plan,
- 27 and 28 June: Heads of State and Government have the opportunity to agree on the 2040 climate target as part of the Strategic Agenda, which sets the main priorities of the European Union for the new institutional cycle. The 2040 climate plan can guide the next policy and investment cycle.