La Française AM: Allocation also true challenge of COP28

La Française AM: Allocation also true challenge of COP28

20 december 2023

Energietransitie
Olie Grondstoffen

COP28, the true challenge lies not only in raising capital, but also in ensuring its just and efficient allocation.

‘COP28 was a rollercoaster ride marked by its president’s affirmation that there is ‘no science’ behind demands for the phase-out of fossil fuels to limit global warming to 1.5°C. For thirteen days, the world held its breath for as long as it took for a much-awaited final agreement to be negotiated. What ultimately came out is arguably bittersweet,’ concludes La Française AM today.

‘While the debate around the success of COP28 seems to be ongoing, one evident and critical concern looms: to support transition and adaptation and to compensate damages, it remains unclear where the necessary capital, especially for developing countries, will come from in the medium to long term. Of the circa $ 83 billion mobilised at the summit (including $ 30 billion pledged by the UAE in an investment vehicle which, it claims, could mobilise $ 250 billion in investment by 2030), it remains to be seen what will be channelled where.

The past two weeks have shown that the true challenge lies not only in raising capital, but also in ensuring its just and efficient allocation. Furthermore, a 2022 OECD report revealed that between 2013 and 2020, overall climate finance consistently fell short of the $ 100 billion annual goal defined at COP15, with a bigger than 45% gap at its worst.

Hence, COP28 ends with a deal on fossil fuels, but the hardest part is not behind us. As the world grapples with the escalating impacts of climate change, the ability of the international climate summit to bridge the gap between promise and practice will be crucial in determining the global community’s capacity to mitigate and adapt to these challenges.’

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