COP28: Climate finance must follow Dubai deal on moving away from fossil fuels, say experts

“We are what we do, not what we say,” he said at the concluding plenary at Dubai Expo City. “We must take the steps necessary to turn this agreement into tangible actions.”

Amid the cheering as fossil fuels were mentioned for the first time at the global climate talks, there were notes of caution by experts. “While negotiators sent a strong signal in Dubai, the final outcome contains some large footholds for the fossil fuel industry that must be swept away at future negotiations,” said Ani Dasgupta, chief executive of World Resources Institute, a think tank.

Also read: 8 biggest takeaways for India from COP28 climate summit.

Some of the more vulnerable countries were less sparing. “We have made an incremental advancement over business as usual when what we need is an exponential step change in our actions,” said Anne Rasmussen, lead negotiator for the Alliance of Small Island States.

Although petrostates failed to stop the mention of fossil fuels in the Dubai outcome document, some elements have caused concern. There was a clear mention of hastening technologies such as carbon capture and storage that can reduce emissions. “The deal fails to address limitations of carbon capture technology when the reality is it can only play a very small role in our fight against climate change and should not be used as an excuse to slow the transition to renewables,” said Dasgupta.

Reiterating the trend

The final deal called for “transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner” so that the world can achieve “net zero by 2050 in keeping with the science”, endorsing what several countries, including India, are already doing to transition to a greener economy.

The deal asked national governments to triple global renewable energy capacity by 2030, which was mentioned in the New Delhi declaration of the G20 summit held earlier this year under India’s presidency. In that, it merely reiterated the direction the world economy is already taking.

The inability of the summit to be firmer on ditching fossil fuels was criticised by climate champions like former US vice-president Al Gore, who said, “The influence of petrostates is still evident in the half measures and loopholes included in the final agreement.”

“This COP28 outcome (is) strong on signals but weak on substance,” said Marcio Astrini, executive secretary at Climate Observatory in Brazil, a research organisation. Brazil will hold the presidency for the next climate summit that is already being dubbed as a finance COP.

“COP29 will be the finance COP and it must agree on how to urgently ramp up investment and align the entire financial system behind a just energy transition and support for vulnerable communities dealing with the mounting impacts of the climate crisis,” said Joe Thwaites, senior advocate of international climate finance at the Natural Resources Defense Council, an American think tank.

The agreement showed that real progress is needed in ensuring the financial flows that are necessary to bring about the transition. The Dubai deal failed to provide any directions on this, observers said.

“We cannot celebrate the mere inclusion of a reference to fossil fuels in the text if it comes without the means of implementation and finance for energy transition for poor and developing countries,” said Sanjay Vashist, director at Climate Action Network South Asia, a collective of advocacy groups.

Even the language on fossil fuel subsidies came in for flak as it called for “phasing out inefficient fossil fuel subsidies that do not address energy poverty or just transitions”, effectively leaving a big loophole that the industry could exploit for short-term gains. In 2022, countries provided a record $1.3 trillion in fossil fuel subsidies, according to a briefing by the International Institute for Sustainable Development.

Show us the money

Climate finance, a typical sticking point at the annual climate talks, did not make much headway this year either. The financial offering from rich states to poor is far too small since developing and poor nations have little to no capacity to invest in clean energy or adaptation in the near term, experts said. The next year’s summit needs to be an occasion when that offer becomes a reality, they said.

There is poor progress on finance besides an acknowledgement of the need for it. There were hardly any concrete numbers other than more promises and pledges that are often observed in the breach. The text on climate adaptation was called weaker than previous versions, with few concrete metrics or definitions aside from a plan to get there over the next two years.

“The road to fossil fuel phaseout lies first through massive financial flows for a huge investment in renewables,” said climate finance expert Avinash Persaud, emeritus professor at London’s Gresham College. “Implementing that plan requires governments and the multilateral development banks to be better, bigger and bolder.”

The Dubai deal also made no specific mention of coal, much to the relief of countries like India and China, which are heavily dependent on the dirtiest of fossil fuels to meet their energy requirements. At the same time, both nations are global leaders in adding to renewable energy capacity.