The Netherlands heads a joint ministerial statement on phasing out fossil fuel subsidies; massive global build-out of liquified natural gas flagged
The 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change in Dubai, United Arab Emirates (UAE), began November 30, 2023. Here’s a look at what happened on the tenth day of COP28.
COP Presidency Plenary
COP28 President Sultan Al Jaber stated at the COP28 presidency plenary event that there were more “areas of divergence than convergence” in all negotiation tracks. He added that ministers would continue with their consultations on December 10.
For mitigation, the major divergence was language around fossil fuel phaseout / phasedown and abatement technologies. There was also divergence on the difference between the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC) and the term “equitable transition” and division of the remaining carbon budget.
The Presidency will hold a consultation regarding the textual proposals on all negotiation tracks of the Global Goal on Adaptation (GGA), Global Stocktake (GST), mitigation and finance among others at 3 pm on December 10. It will then work on the text overnight to produce final texts on December 11 for consultations and adoption.
Japan made a country intervention on the need for the operationalisation of Article 6 to create financial resources so that the world can be kept on track to achieve the 1.5°C Paris target.
Adaptation
Collins Nzovu, Zambian MP and Minister of Green Economy and Environment as well as chair of the African Group of Negotiators, stated at a press conference on December 9 that without a robust outcome of the GGA, including on adaptation finance, COP28 would fail.
He was also disappointed at the slow progress of negotiations around the scale of adaptation finance needed by developing countries, especially in Africa, to adapt to the impacts of climate change.
He stated that it was a matter of life and death for the African continent. The draft text for GGA will be out on December 10 for the COP presidency to work on it overnight and present the final text on December 11.
Article 6.2
Late night discussions on the new version of the decision text saw dissatisfaction with the progress among Parties and disappointment expressed by various groups over the text. There were mentions of the need for balance across Article 6 and the challenges faced in reaching a consensus.
The African Group and the European Union (EU) stressed on the need for more transparency in the market. Similarly, the Coalition for Rainforest Nations asked for stronger rules and definitions that do not compromise integrity.
The United States (US), on the other hand, seeks lesser rules and more provisions to be nationally determined, including the authorisation process. The Agreed Electronic Format has not been adopted and parties expressed disappointment over it as well.
Article 6.4
A new draft text on Article 6.4 — which will create a global carbon market for emission reduction or CO2 removal projects — was released on December 9. It presents two options.
The first option accepts the recommendations provided by the Supervisory Body, a 12-member team tasked with overseeing the mechanism. Under the same option, Parties asked the supervisory body to reconsider a highly flawed item called ‘tonne-year’ accounting for nature-based removals. It is a method that considers storing 1 tonne for 100 years as a carbon credit, but also storing 100 tonnes for 1 year, or 10 tonnes for 10 years as the same.
The other option called for adding a moratorium on the functioning of markets. To analyse the suspension of the moratorium, it suggested that the Intergovernmental Panel on Climate Change will have to submit a report assessing the carbon market’s contribution to the stabilisation of the climate system every three years.
OPEC
In a letter sent to Organization of the Petroleum Exporting Countries (OPEC)’s member countries, OPEC Secretary General Haitham Al Ghais responded to momentum at COP28 on fossil fuel phaseout language by urging the group to “proactively reject any text or formula that targets energy i.e. fossil fuels rather than emissions”. The language has been inserted in the third draft of the GST text with options.
Azerbaijan has been announced as the host country of the next COP summit in 2024 — COP 29 — with the capital city of Baku set to host the talks at the end of next year. The announcement came after Armenia stepped down from the process of bidding to be the host. Disagreements had abounded between Russia and Eastern European countries due to the Russia-Ukraine conflict, and Russia indicated no objection to Azerbaijan hosting the summit.
GST
There have been no open door consultations since December 8. It has been overheard that another negotiation will take place on December 10 before moving into a final iteration of the text on December 11.
Phasing out fossil fuel subsidies
The Netherlands headed a joint ministerial statement on phasing out fossil fuel subsidies. Canada, France, Austria, Belgium, Antigua & Barbuda and Finland are among signatories of the coalition.
The Dutch highlighted the lack of transparency and inaction during previous COPs on the matter, urging all parties to scale up efforts. The joint ministerial addresses lack of a clear methodology and international cooperation as key barriers to the implementation. Fossil fuel subsidies are heavily reliant on public money. Global fossil fuel subsidies rose to $7 trillion in 2022 according to the International Monetary Fund.
The ministerial aims to follow threefold actions to move away from inefficient fossil fuels — transparency including publishing inventories by countries; international agreements to drive bilateral and multilateral cooperation; and international dialogue to share lessons learned and phasing out strategies.
Signatory countries also noted the key role of developing carbon markets to price carbon along with phasing out subsidies to realise the Paris goal.
Global LNG Boom
The environmental and human rights organisation Urgewald (Germany), the Port Arthur Community Action Network (US) and the Centre for Energy, Ecology and Development or CEED (the Philippines) addressed a press briefing at COP28 on the massive global build-out of liquified natural gas (LNG) in North America and South East Asia.
According to Urgewald’s Global Oil and Gas Exit List (GOGEL), oil and gas companies plan to increase global LNG export capacity by 162 per cent. This equals 729 million tonnes of liquefaction capacity annually.
The US Gulf coast is set to become the world’s largest LNG export hub, with 21 new facilities in planning. In total, these account for 41 per cent of the global LNG export expansion listed on GOGEL.
Simultaneously, Southeast Asia is forging ahead to establish the world’s largest import hub, with the Philippines at the forefront of this development. Plans in the Philippines include 12 LNG import facilities and 40 GW of gas fired power situated in some of the world’s most biodiverse ecosystems.
Climate finance: NCQG
On December 9, an informal consultation for continued discussion on the New Collective Quantified Goal (NCQG) on climate finance was held.
Parties had requested the previous day to allocate time for discussing substantive elements of the goal (including time frame, transparency, structure), as the first week primarily focused on determining the work modality for 2024.
In the process for next year, there is broad agreement on conducting three meetings under the ad hoc work programme for NCQG. Norway pointed out that the text needs to clarify whether these meetings refer to the Technical Expert Dialogues or are something separate. South Africa, on behalf of the African Group, suggested there was no need to decide the exact number of meetings and to leave such details to the co-chairs.
In substantive elements, on structure, the EU said they cannot accept any language which includes Loss and Damage next to mitigation and adaptation for finance in NCQG text, a demand that has been made by several developing countries in the past.
South Africa on behalf of the African Group said that overall they were “not satisfied at all” with how their views were reflected in the draft text.
Saudi Arabia on behalf of the Arab Group said they are “strongly against having substantive elements in this decision in CMA 5,” even though they were among the chief proponents of having discussions on substantive elements the previous day.
They said this stance is due to the lack of sufficient time to really discuss nuances of options related to each element. But they provided comments on substantive issues nonetheless, including on timeframes.
On this, they said they support a short period of five years (linking the NCQG to GST, NDCs cycle, etc.) which could be reviewed and extended as per requirement for five years after. They further added they did not see options reflecting developing country needs on this front.
Other developing countries have, in the past week, been vocal in their support for shorter timeframes as well.
The co-chairs noted the point of lack of sufficient time to discuss all nuances of substantive elements and requested countries to submit in writing the options they wanted to see included that had been missed so far.
As on the afternoon of December 9, the discussions on NCQG have likely shifted to ‘inf inf’ settings, where delegates converse informally and non-Party stakeholders such as Observers are not allowed. Whether the changes that are made to the text after these conversations bring the Parties closer to a concrete way forward in less than four days time remains to be seen.
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