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Oikon at COP28

December 15, 2023 – Dedicated to a world developing in harmony with nature, we attended the recently concluded COP28 in Dubai, where important discussions and decisions on sustainability took place, and are happy to share some insights with you…

To better understand the achievements and limitations of COP28, it is important to realise that so far only one COP has taken place in a country rich in the fossil fuels, namely COP18 in Doha, Qatar in 2012. At that time, the main achievements recognised were “the adoption of an amendment to the Kyoto Protocol providing for a second round of binding greenhouse gas emission targets for Europe, Australia and a handful of other developed countries“ and “the launch of a process to consider the establishment of a new mechanism to address ‘loss and damage’ from extreme weather and from slow-onset impacts such as sea level rise“.

Fast forward to 2021, when in Glasgow, United Kingdom of Great Britain and Northern Ireland, “a dispute over coal nearly sank the Glasgow Climate Pact”. You could argue that a dispute was trivial, but it was not, as the coal-rich countries, notably China and India, blocked an agreement until the end of COP26, unless the “phase out” was not replaced by a “phase down” of coal. Their argument in that case was that it would be unfair to limit their prospects for economic growth.

As the situation worsened with the impact of the economy on the climate, the environment and society, the stakes became higher and higher. The language of the agreements became less and less of a trivial issue and more of the centrepiece of future successes or failures in achieving a sustainable net zero world. The language must also be considered in the context of the Brundtland Report, which brought to light a definition of sustainability. Unfortunately (for all of us), the definition of sustainability has been reduced to a single element, that of intergenerational solidarity. The other two elements, which are extremely important for understanding the achievements and disappointments of each new COP and all other international agreements such as the UN’s 2030 Agenda or the Paris Agreement, have been left out.

Two other elements of a definition were that to be sustainable development must be “based on consumption standards that are within the bounds of what is ecologically possible and to which all can reasonably aspire” and „must not endanger the natural systems that support life on earth — the atmosphere, the waters, the soils and the living beings.”

For decades, fossil fuels supported what Jim MacNiell, a former secretary-general of the Brundtland Commission and lead author of Our Common Future, calls “a colossal expansion of the world economy”. This growth has been indeed tremendous, with many advances, but at the same time it has been pursued in unsustainable, business-as-usual forms of development. And here we are, according to the World Meteorological Organisation and Copernicus, 2023 is set to be the warmest year on record, with all the implications for economies around the world not yet fully understood.

Will or to what extent can COP28 change the current business-as-usual forms of development? The most important, and already described as landmark deal, fossil fuels have been mentioned for the first time. In addition, all countries have been called to transition away from fossil fuels. According to the United Nations Climate Change Conference the agreement reached signals the “beginning of the end” of the fossil fuel era by laying the ground for a swift, just and equitable transition, underpinned by deep emissions cuts and scaled-up finance.

The Oikon team was especially keen to find out how this finance will be scaled up through the many COP28 hubs, i.e. Climate Finance, Energy Transition, Knowledge, Technology & Innovation and Impact Hub. The UAE, Saudi Arabia and China pavilions were also of great value, especially the first two, as they provided valuable insights into their „transitioning mindset “.

We got the impression that the banking sector in the UAE is rapidly and agilely changing its strategies and business models and behaving as if it is committed to CSRD and ESRS. There will be a lot of work done in terms of transition plans, improving data quality, developing regional scenarios for net zero, embedding climate in risk management framework, setting GHG emission reduction targets for the most carbon intensive sectors and achieving sustainable target of tens of billions invested in sustainable project. Until COP28, this was a largely neglected topic. However, with COP28, the UAE is setting new, far more ambitious national targets to reduce greenhouse gas emissions by 2050, with the aim of achieving net zero emissions. This commitment is also visible in a special UAE presentation entitled House of Sustainability.

Like China, Saudi Arabia has also set itself the goal of achieving net zero emissions by 2060. Its pavilion, the Saudi Green Initiative, displays a fresco of various projects. From massive reforestation projects and wildlife conservation projects to projects using plastic waste from the ocean to make computer mice – the Ocean Plastic Mouse, whose casing is made from 20% recycled plastic from the ocean by SABIC. This is a breakthrough in material technology that starts with the removal of plastic waste from the oceans and waterways.

As we reflect on COP28, we look forward to a future where sustainability is not just a commitment but new opportunities and delivering of the tangible results.

Oikon d.o.o.
Oikon d.o.o.