End of the Fossil Fuel Era? Not Really
Even before the COP28 summit began in Dubai this year, it was seen as possibly the most controversial climate summit in history. This view had strong, compelling reasons for pessimists to believe so. First, it was being hosted in an oil-dependent nation, where the oil lobby and the OPEC group were expected to give serious pushback to any agreement on moving away from oil and gas. Second, the presidency of the summit was with the man who heads the UAE's state oil company, Sultan Al Jaber, the director general and CEO of the Abu Dhabi National Oil Company (ADNOC). But Jaber wanted to make history and did not want the summit to become a giant greenwashing exercise.
Jaber's intent was at play in the initial days of the summit. In a pact he sponsored, 50 oil and gas companies signed up to cut greenhouse gas emissions from their operations and slash methane releases to near-zero by the decade's end. This charter was significant as it included Jaber's own ADNOC and even the likes of American oil giant Exxon Mobil, which climate activists have lamented over the years for their long-overdrawn climate denialism and advocacy of the economic benefits of fossil fuels.
Hence, when negotiations over the final pact ran overtime on the last day of the summit – 12 December, there was a sense of hope that Dubai would deliver something "historic" and "ambitious". Finally, on 13 December, a day after the scheduled ending of the summit, Jabar announced the adoption of the pact, which had an "unprecedented" reference to transitioning away from fossil fuels.
For the first time, the world agreed to move away from fossil fuels – oil, gas and coal and called for a transition away from fossil fuels in "energy systems in a just, orderly and equitable manner." But just minutes after the UAE consensus was announced and as the final text of the pact made rounds, climate activists, small island nations, and much of the developing world saw a 'litany of loopholes' in the text and called it short of being a landmark deal. More on that later, but first, the breakdown of several clauses and the language around them which has come under fire.
The devil in the language
The biggest contention with the clauses in the final text is that these principles were long recognised, and without any binding targets, nothing will change on the ground in the race to net zero by 2050. The only positive, however, is that much has been put into a global agreement for the first time.
Take, for example, the clause recognising the need to transition away from fossil fuels. Without a doubt, it signals the path that the world’s energy systems must take, but “transitioning away” is seen as weaker than the “phase out” of fossil fuels. The language here, as seen by experts, does not seem to be strong enough to halt further investments in fossil fuels.
Similarly, the clause about “accelerating efforts towards the phase down of unabated coal power” seems no different or stronger than what the world saw at COP26. Instead, the focus on “accelerating efforts” from COP26’s “rapidly phasing down” of coal highlights the concerns.
“The exclusive focus on rapidly phasing down unabated coal, as opposed to all fossil fuels, heightens the risk of exacerbating the North-South global divide. Despite the spotlight on fossil fuels, realising a phase-down necessitates a simultaneous robust expansion of renewable energy and climate finance, particularly in emerging economies poised for a green leap,” says Arunabha Ghosh, CEO, Council on Energy, Environment, and Water (CEEW).
Gas for energy security
Possibly the biggest win for the fossil fuel industry is the recognition that transitional fuels, i.e., gas, play a role in “facilitating energy transition while ensuring energy security.”
Effectively, this implies a licence to burn natural gas, a fossil fuel, albeit less polluting than coal.
Just after the consensus in UAE, the Gas Exporting Countries Forum (GECF) and the OPEC came out with their joint statement stressing the pivotal role of oil and natural gas in economic development and energy security.
“This will require increased levels of investments in oil and gas,” the joint statement said.
The clause for transitional fuels makes transitioning away from fossil fuels all the more ambiguous under the garb of preserving energy security.
India’s position on The Consensus
India has acknowledged the ambitious actions delineated at the summit but urged the developed world to bring these commitments to fruition.
“While this COP is outlining ambitious actions, India urges that such determination is also substantiated with means to bring it on the ground. The way ahead, as underlined by PM Shri Narendra Modi Ji, must be based on equity and climate justice,” wrote Union Environment Minister Bhupender Yadav on X (formerly Twitter).
Experts also say there has not been much change for India and that the policy approach and targets have been in line with the action plan for years.
“India has been consistent in its commitment around the declaration and has been scaling down coal-powered station additions while scaling up renewables and electric mobility in the mix along with progressive energy efficiency measures,” says Sambitosh Mohapatra, Leader - ESG/Climate & Energy, PwC India.
This consistency in policy approach, added with lower carbon emissions per capita, also explains why India did not sign up for the pledge related to tripling renewable energy sources by 2030 at the summit. More importantly, the pledge also had anti-coal language, which called for ending investments in new unabated coal-fired power plants.
“While India is likely to add new coal-based capacity in the near to medium term to meet the growing electricity demand and ensure energy security of the country, the share of coal-based capacity in the electricity generation mix is expected to come down from 73% currently to less than 60% by 2030, along with a healthy increase in the renewable energy capacity,” says Vikram V, Vice President & Sector Head - Corporate Ratings, ICRA.
Financing gets a miss
Perhaps the biggest contention with the UAE Consensus was that even though it lays the groundwork for transitioning away from fossil fuels, it fails to provide a plan to fund it.
"COP28's failure to instate effective financial mechanisms, obliging historical emitters to contribute, jeopardises support for developing nations in meeting their NDCs. The urgency of the climate crisis demands immediate reforms be made to the COP process to ensure that accountability, implementation, and climate justice become central to all efforts. Otherwise, future COPs risk becoming obsolete," says Ghosh.
The Energy Transition Commission, a think-tank, estimates that the developed world needs to shell out around USD 25-50 billion a year in grants to the developing world over the rest of the current decade to retire coal.
The final text does acknowledge that trillions of dollars will be needed for a just transition but lacks the keys to unlocking them. The union environment minister's statement subtly hinted at this while reiterating the principles of climate justice and how the developed world should take the lead based on their historical contributions.
Despite its flaws, the COP28, for now, will be considered the most historic climate summit since COP21. Jaber, within sight of the largest oil plant on the planet and despite OPEC opposition, managed to keep "fossil fuels" in the final text. However, the implementation will be the key, as Jaber sums it up – "We are what we do, not what we say."
