Vijay Vaitheeswaran, Global energy and climate innovation editor at The Economist, discusses the challenges and progress in international climate summits, the role of the private sector in finance for clean energy, the economics of energy sources, the politics and pragmatism surrounding the summit, and the importance of hope, innovation, and accountability in fighting climate change.
COP 28 will focus on phasing out fossil fuels, establishing a loss and damage fund, and addressing equity in climate financing.
The private sector's role in financing climate solutions and access to capital for developing countries will be significant discussions at COP 28.
Deep dives
Overview of COP 28 and Global Stock Take
COP 28 is the 28th edition of the UN's annual climate summit, and this year's meeting is particularly important as it is the first formal assessment of nations' progress in meeting the goal set in the Paris Agreement to limit the rise in global temperatures. Progress since the Paris Accord includes the significant growth of renewables, with solar photovoltaic becoming cheaper than coal in many parts of the world. Energy efficiency and access have also improved, and there has been innovation in decarbonizing existing assets. However, despite these advancements, global warming continues to exceed the 1.5 degree Celsius target. The conference will focus on key issues such as phasing out fossil fuels and establishing a loss and damage fund to help developing countries mitigate the impacts of climate change.
Controversy and Challenges Surrounding COP 28
COP 28 is facing controversy due to its location in the UAE, a major oil producer, and the involvement of Dr. Sultan Al-Jaber, the head of the UAE's state oil company, as president of the conference. This has raised concerns among activists and some countries about the influence of the fossil fuel industry on the summit's outcomes. Contentious discussions at the conference will surround the future of fossil fuels, particularly the phase-out or phase-down of coal and other high-emission energy sources. Another important topic is methane emissions, with efforts to curb them and seek cooperation between major emitters like the US and China. Additionally, the loss and damage fund established last year will be further debated and the issue of equity in accessing climate financing will be addressed.
The Role of Private Sector and Access to Capital
The role of the private sector in financing climate solutions, as well as access to capital for developing countries, will be significant discussions at COP 28. The current global environment poses challenges for clean energy investments, as higher interest rates and inflation create difficulties for raising funds. Developing countries, particularly those facing debt crises, face even greater hurdles in accessing capital for climate projects. While the US has implemented significant climate legislation, such as the Inflation Reduction Act, focused on providing subsidies and incentives for clean energy, there is a need for a mix of carrots and sticks to effectively transition towards greener forms of energy. It is crucial to explore innovative financing mechanisms and ensure equity in access to capital for developing countries.
Hope for Climate Action and Innovation
Amid the challenges and controversies surrounding COP 28, there is hope for climate action and innovation. The growing momentum towards innovation and the recognition of the need to develop alternative solutions to tackle climate change are promising signs. Technological advancements, such as satellite technology for monitoring methane emissions, provide tools for holding governments and companies accountable. Democratizing the process by involving bottom-up and outside-in approaches, along with the efforts of civil society and innovation from the private sector, contribute to addressing the climate crisis. While the COP process remains important, the solutions will ultimately come from these collective efforts and the bottom-up approach.
The 28th edition of the international climate summit known as the Conference of the Parties—or COP—convened in Dubai this week, just as scientists announced that 2023 was likely to be the hottest year in human history. Host Ravi Agrawal spoke to Vijay Vaitheeswaran, the Global energy and climate innovation editor at The Economist, about what to expect.
