NOW Calls for Significant Pledges 4th call to action for a better COP28.

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Finance plays a critical role in turning ambitions into actions with the staggering amount of cash needed for climate adaptation, disaster relief and energy transition.

CALLING FOR TRILLIONS … NOT BILLIONS

In the first four days of COP28 Dubai, governments, businesses, investors and philanthropists have announced a pledge of more than $57 billion across the climate agenda.

A report published on the fifth day of COP28, jointly commissioned by the governments of the UK and Egypt, revealed that emerging markets and developing countries, other than China, will require US$1 trillion annually by 2025 to cut emissions, boost resilience and deal with the loss and damage caused by climate change impacts, and restore nature and land.  It also calls for a total annual investment of US$2.4 trillion by 2030.

WHO IS WRITING THE CLIMATE RULES?

In his opening COP28 address, president Dr. Al Jaber said: “It is essential that no issue is left off the table. We must look for ways and ensure the inclusion of the role of fossil fuels.”

Controversially, at least 2,456 fossil fuel lobbyists are present at COP28. This is almost four times more than at COP27, according to an analysis by Kick Big Polluters Out (KBPO), a coalition of more than 450 organisations calling for an end to fossil fuel companies’ influence in climate policy. These lobbyists are granted delegate access as part of trade associations mostly from the global north, and they received more passes than delegates from the 10 most climate-vulnerable countries and outnumbered every country delegation apart from the host country United Arab Emirates (UAE) and Brazil (2025 COP30 host country).

According to the International Energy Agency (IEA), oil and gas companies doubled their profits in 2022 compared to 2021 levels due to high energy prices triggered by the Russian war on Ukraine and record subsidies from governments of more than US$1 trillion. Oil and gas majors renewed their investments in fossil fuel and scaled back commitments on renewable energy during their most profitable year in history. They earned an average annual revenue of US$3.5 trillion from 2018 to 2021 and spent just 2.5% of their investment on clean energy, which is about 1% of the global clean-energy spend.

The United Nations (UN) warned that the expansion plans of oil and gas companies would exceed the planet’s carbon budget by more than double. New data from the Global Oil and Gas Exit List (GOGEL), a public database detailing the activities of more than 1,600 companies representing 95% of global production, revealed that the UAE state oil company ADNOC, whose CEO is presiding as COP28 President, has the largest oil and gas expansion plans of any company in the world.

These disturbing choices and future plans are being made at an urgent time when there is huge awareness that the effects of burning fossil fuels are having far-reaching effects on our climate, ecosystems and communities.

As concerning and distasteful as it may be to climate change activists, there is a logic to including oil and gas companies at the COP28 negotiation table – to participate in shaping energy transition solutions, to balance investments in clean energy, to phase out (not phase down) unabated fossil fuels and to tackle pollution.  Country leaders are also calling on them to contribute to the Loss and Damage Budget, to help the world’s most vulnerable people to repair the damage from climate breakdown. The investments and funding contribution will come from oil revenue.

TURNING OIL MONEY GREEN

There is something special about “oil money” according to Natalie Koch, author of “Greening oil money: The geopolitics of energy finance going green” published last November on Sciencedirect.com, which examined the role of “oil money” in promoting energy transition, tracing activities across the oil industry and countries heavily dependent on oil revenues to bolster their green credentials.

Through a case study of the UAE from 2014 to 2022, it illustrated how, given the moral taint of oil money today, UAE corporate and government leaders are especially interested in the symbolic capital derived from “greening” oil money by investing in sustainability and energy transition activities which, in turn, might even allow them to retain control of global energy systems that they have dominated for so long.

NOW CALL TO ACTION

NOW is calling on developed countries and major emitters to contribute significant new pledges of money to the disaster relief Loss and Damage Fund and a sustainable mechanism to regularly replenish the fund.

It took more than thirty years of pressure from climate-vulnerable developing countries to establish the loss and damage fund due to continued resistance from wealthy countries concerned about legal liability and compensation. They also insisted that high-polluting nations – China, India, Russia, and Saudi Arabia – contribute to the fund and that only the least developed countries be eligible for funding.

A United Nations report found that funding from wealthy nations grew by 65% from 2019 to 2020, to US$49 billion. That’s still far below the US$160 billion to US$340 billion the UN estimates will be needed annually by 2030.

The Loss and Damage Fund was activated on the opening day of COP28 and it’s now vital for those deemed responsible to step up to fill the fund. By the sixth day of COP28, US$725m has been pledged.

– United Arab Emirates: US$100m

– Germany: US$100m

– Italy: US$108m

– France: US$108m

– UK: US$75m (taken from an existing and recently downgraded climate finance pledge and it is neither new or additional)

– Denmark: US$50m

– Ireland: US$27m

– EU: US$27m

– Norway: US$25m

– USA: US$17.5m

– Canada: less than US$12m

– Japan: US$10m

– Slovenia: US$1.5m

To date, finance contributions are voluntary and come from several sovereign and non-sovereign states. A group of climate policy advocates emphasized that any money pledged and delivered should be new and additional, and that funds are grants and not loans. They are also calling for new sources of funding such as taxing the fossil fuel industry, a frequent flyer levy, a tax on international shipping fuel, or a global wealth tax.

UN Secretary General Antonio Guterres repeatedly called for taxing fossil fuel profits for climate damage. “I am calling on all developed economies to tax the windfall profits of fossil fuel companies. Those funds should be re-directed in two ways: to countries suffering loss and damage caused by the climate crisis; and to people struggling with rising food and energy prices.”

Climate adviser Ann Harrison of Amnesty International observed that the amount pledged to-date is dwarfed by the US$7tn in subsidies that many states, including some donors, provide annually to the fossil fuel industry.

The push to develop a Loss and Damage Fund was first suggested by Vanuatu in 1991, on behalf of the Alliance of Small Island States (AOSIS). The country is a negligible polluter of greenhouse gases, yet it is most at risk from the rising sea and natural hazards due to climate change. Today, Vanuatu politicians and activists are leading a campaign to have the International Court of Justice in the Hague issue an opinion on climate change, which could lend support to the growing push for climate litigation from individuals or groups (potentially even countries) to sue governments or private companies for climate harm.

Join us in four days for our key takeaways for COP28.

 

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