As the dust settles on a monumental COP28 and its “UAE Consensus” package of decisions, CMI has reviewed outcomes on its key priorities for the two-week negotiations. While there were some setbacks, especially in Article 6 discussions, there were also significant gains: the delivering of the first global stocktake among others. The focus now shifts to implementing these consensus-derived decisions.

Key priority progress

CMI Priority: Global Stocktake Course Correction Roadmap

COP28 delivered the first of 5-yearly global stocktakes (GST) of collective emissions reduction ambition under the Paris Agreement. GSTs are intended to support the ratchetting of ambition in the next round of nationally determined contributions (NDCs), the next due to be shared in early 2025 ahead of COP30 later that year. As per UNFCCC rules, the final text was delivered through a consensus process amongst all Parties, so there are compromises in the final text. However, the direction of travel is clear: the world must transition away from fossil fuels, while increasing investment in clean climate technology, improving land management practices, and solutions for hard-to-abate industrial sectors.

The GST text further reaffirms the IPCC science recommendation that, to limit global warming to 1.5C, collective global efforts must decrease global emissions by 43% by 2030 and 60% by 2035 on 2019 levels, noting that the next NDCs due in 2025 need to consider these trajectories. Australia has used 2005 as the baseline for its targets, 60% from 2019 translates to 67% by 2035 from 2005 levels for the global average. As developed countries should do more. CMI advocates for reductions of at least 70% by 2035 on 2005 levels.

In addition to signalling the beginning of the end of the fossil fuel era, the text provides a substantial mitigation work program outlined for Parties to inform their next NDCs, including tripling renewables and doubling energy efficiency by 2030, phasing down unabated coal, emphasising methane reductions and phasing out inefficient fossil fuel subsidies where they do not directly address energy poverty.

The reference to phasing down “unabated coal power” from previous COPs remains in Paragraph 28b. However, it should be noted that there is still no clear definition or process for “unabated” in this context, meaning that potential loophole compromises remain on abatement and transitional fuels which could undermine efforts to limit warming to 1.5 degrees.

Whilst the text represented general ‘consensus’, the Association of Small Island States (AOSIS) response expressed disappointment saying “the course correction has not been secured.” This is a clear challenge for countries, business and citizens as the next NDCs are developed over the next 12 months or so.

CMI Priority: A clear path towards Article 6 carbon market operationalisation and readiness

Although the COP Presidency highlighted in advance the role better functioning voluntary carbon markets can play in channelling additional finance to developing countries and local economies, there was no progress in advancing governance for Article 6.2 and the UN-centralised Article 6.4 market. Formal negotiations hit several unmoveable roadblocks including a failure to agree on transparency requirements, reporting, and crediting authorisation and revocation rules. While sufficient progress made at previous COPs has enabled bilateral agreements to commence under Article 6.2, following COP28 these will continue without a UNFCCC framework that sets an Agreed Electronic Format for reporting and clarity around rules on authorising Internationally Transferred Mitigation Outcomes.

Issues relating to final draft, unadopted, decision texts are highlighted below:

Article 6.2

  • Concerns around reduced transparency requirements, with Parties now only required to report key details such as methods, metrics, vintages and entities at their leisure.
  • Ongoing challenges around authorisation, in particular it appears that progress is being made determining that A6.2 units – internationally transferred mitigation outcomes (ITMOs) – can only be transferred following authorisation;
    • A question mark remains over changes to authorisation “under extreme circumstances” following the first transfer.
  • There was still no consensus on the agreed electronic format, and tables for reporting under A6.2: this has been pushed for adoption at the 6th Conference of Parties to the Paris Agreement (CMA.6), sessions at COP29.
  • Also pushed to CMA.6 was the consideration of whether or not emissions avoidance can be an eligible activity under A6.2.

Article 6.4

  • Virtually all of the work programme under A6.4 was pushed back to the June 2024 intersessional meetings of the Supervisory Body, and the Subsidiary Body on Scientific and Technological advice, aiming for agreement at CMA.6 Matters for this work programme include:
    • Further guidance on assessment of methodologies;
    • Whether or not eligible activities can include removals; and
    • As part of a longer term work programme: whether or not eligible activities could include avoidance and conservation enhancement.
  • The Supervisory Body is requested to continue work on:
    • The sustainable development tool to further strengthen its human rights safeguards, particularly around Indigenous and local communities;
    • The appeals and grievances procedure embedded in the mechanism; and
    • Guidelines relating to baselines, additionality, leakage and reversals.
  • One point of relative progress in this draft is the decision that afforestation and reforestation project activities registered under the Clean Development Mechanism can be transferred to A6.4, so long as they comply with the rules, modalities and procedures, and the request is received no later than June 30, 2024.

Article 6.8, which had an agreed decision, unlike 6.2 & 6.4

  • 8 for non-market approaches (NMAs) is progressing slowly, but steadily, with the UNFCCC web-based platform to track activities under the mechanism expected to be established by June 2024.
  • Encourages Parties to identify opportunities to develop and implement NMAs, recognising that this is a hitherto unconsidered category in formal approaches.
  • Ongoing work will include the secretariat developing a manual for submitting and recording information on NMAs in the web-platform.
CMI Priority: High integrity approaches to corporate and industrial net zero transition

On the sidelines of the official negotiation streams, COP28 saw an important collaboration launched that establishes an end-to-end integrity framework to support demand-side integrity in the use of carbon markets in net zero transition. This brings together key international organisations including the SBTi (Science-based targets Initiative), the VCMI and IC-VCM. These and other groups agreed to provide consistent decarbonisation guidance, including regarding the credible role of carbon credits in corporate transition. At an event organised by the COP President, this end-to-end framework was also endorsed by the Climate Disclosure Protocol , the GhG Protocol and the We Mean Business Coalition.

COP28 also saw the launch of a historic collaboration by six of the major independent voluntary standards. The collaboration – which includes the American Carbon Registry, ART (Architecture for REDD+ Transactions), Climate Action Reserve, Global Carbon Council, Verra and Gold Standard – aims to ‘promote integrity throughout 2024 to create the next step-change in the dependability of carbon markets.’

Further information on these initiatives can be found in our post: Reflections on Finance and Trade Day at COP28.

On the broader suite of international standards and guidance to support corporate and industrial net zero transition, COP28 saw:

  • The establishment of a Taskforce on Net Zero Policy, following the launch of the Integrity Matters report by the UN High-Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities at COP27. The Taskforce will identify opportunities within existing policy frameworks to support the implementation of recommendations, including through research and technical support for developing countries.
  • The launch of the COP28 Presidency’s Net Zero Transition Charter. This initiative is intended to mobilise credible, science-aligned private sector net zero goals, while holding corporate signatories to account on commitments made under the Charter.
  • A collaboration agreement between the IFRS Foundation/International Sustainability Standards Board (ISSB) and the International Organisation for Standardisation (ISO) to support efficient and resilient global economies through consistent international approaches in the internal management and disclosure of sustainability-related matters.
  • The UNFCCC Net Zero Recognition and Accountability Framework for private sector commitments that was anticipated to be launched at COP28 was postponed to early 2024.
CMI Priority: Scaling up and acceleration of climate finance, including the operationalisation of the Loss & Damage Fund

The landmark Loss & Damage Fund that was gavelled through in the opening plenary immediately raised expectations for COP28. While the Fund was quickly operationalised with USD770.6 million pledged to it, it is estimated to represent less than 0.2% of the financing requirements of developing countries impacts by loss & damage. The cost of operationalising the Fund, initially hosted by the World Bank, is also expected to be USD115.3 million. On the sidelines of COP28, vigorous calls were made for climate justice and the need for the fund to focus on human rights and support historical reparations.

However, on a positive note, it was agreed that the Santiago Network (part of the Warsaw International Mechanism for Loss and Damage established in 2013) will be housed in consortium between the UN Officer for Disaster Risk Reduction, and UN Office for Project Services. Once fully operational, the Network will draw together relevant organisations and experts to avert, minimise and address loss & damage at a local, national and regional level in developing countries particularly susceptible to climate impacts.

The GST text explicitly recognised the “growing gap” in financing commitments to developing countries for both mitigation and adaptation and called for steps to address that. The text “urges” developed country Parties to strive to fully deliver on the USD100 billion per year in climate finance (agreed at COP15) through to 2025, noting that this goal is yet to be met.

Looking ahead to 2025, when the new collective quantified goal on climate finance (NCQGF) under the Paris Agreement is set to commence, the text suggests a transition in the mode of work to commence next year at CMA.6. The GST text further recognises the changing landscape of climate impacts, including the greater financial burden of adapting to and recovering from climate-induced disasters, and suggests that the NCQGF should take into account these new elements.

Each of the above decisions underscores the importance of reforming the multilateral financial architecture, including multilateral development banks. Concerns raised by developing countries in relation to the World Bank’s high administrative fees for hosting the Loss & Damage Fund further highlight the need for these reforms. Pleasingly, on the sidelines of COP28, multilateral financial institutions highlighted their collaboration on carbon pricing, including through the recently established taskforce, as a means to accelerate mitigation through sustainable finance.

CMI Priority: Adaptation, nature-based solutions and Just Transition Work Programme decision

A framework for the Global Goal on Adaptation (GGA)  was adopted following intense negotiations co-chaired by Australia’s Assistant Minister Jenny McAllister. It calls for a doubling in adaptation finance on 2019 levels, by 2025, and includes national assessments and monitoring of adaptation needs. One challenge that persisted at COP28 was the quantification of 2019 finance flows to adaptation as these are not entirely clear – this lack of clarity is making the GGA finance goal difficult to agree on.

While the text recognises the current gaps in implementation of the assessment, monitoring and evaluation frameworks, it equally states that contributions to GGA targets are country-driven and voluntary. This has continued to be a point of contention for developing country Parties who want to see mandated adaptation contributions by developed country Parties as they have the largest historical responsibility for current climate impacts.

On nature-based solutions, the GST text explicitly calls for Parties to conserve, protect and restore nature and ecosystems in line with the Kunming-Montreal Global Biodiversity Framework, which sets a target of protecting 30% of all land and sea by 2030. While Article 6 does not feature heavily through the text, owing to minimal progress and a lack of decisions adopted at COP28, the role for carbon markets to play in enhancing nature and capturing residual GHG emissions is evident through the inclusion of “results-based payments” for land conservation and carbon stock enhancing activities.

On the sidelines of the formal negotiation streams, the Forest & Climate Leaders Partnership (a joint initiative to deliver on the Glasgow Leaders’ Declaration on Forests and Land Use) released their roadmap Scaling investment in forest carbon results and credits on December 9 (Nature and Land Use Day). The roadmap details how high-integrity forest carbon investments can be scaled to meet the growing ambition required under the Glasgow declaration, and the Paris Agreement.

Finally, the decisions included some important recognition of the importance of delivering a just transition with important focus in global stocktake, adaptation, climate finance, and implementation agreements. However, the final text does not set out ambitious outcomes for the Just Transition Work Programme, limiting it to dialogues and an annual report to inform the GST. Whilst it does centralise just transition work within the UNFCCC and embedding in its processes, more work will be required on what the just transition means in quantitative terms from emissions trajectories to climate finance obligations.

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