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Home / News and Insights / Insights / COP28: What does the UAE Consensus mean for the net-zero transition?

The 28th United Nations Climate Change Conference of the Parties (COP28) concluded in the UAE this week, with negotiations on a landmark agreement now concluded. Here we break down what is in the COP28 agreement and the opportunities it will present as we continue our transition towards carbon zero.

Reaffirmations and doubling down

The COP28 agreement reaffirms the goal of holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels. The agreement recognises that across all sectors, we have the technology available to effectively implement low-cost mitigation options to keep the 1.5°C target alive.

Greater ambition is called for to align global emission reductions in line with the 1.5°C temperature goal, and the COP28 agreement speaks to an urgent need to address the gap. There is an impending sense of urgency in the COP28 agreement as it recognises the closing window to raise ambition and implement measures that will achieve these goals.

‘Global Efforts’ – rapid renewable uptake and a just transition away from fossil fuels

In line with the reaffirmed target temperature target, the COP28 agreement calls for the following global efforts (emphasis added):

  1. Tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030;
  2. Accelerating efforts towards the phase-down of unabated coal power;
  3. Accelerate efforts globally towards net zero-emission energy systems, utilising zero and low-carbon fuels well before or by 2050;
  4. Transitioning away from fossil fuels in energy systems in a just, orderly, and equitable manner;
  5. Accelerating zero and low emission technologies such as renewables, nuclear, abatement, and removal technologies such as carbon capture and utilisation, and storage;
  6. Accelerating and substantially reducing non-carbon-dioxide emissions globally, including in particular methane emissions, by 2030; and
  7. Accelerating the reduction of emissions from road transport on a range of pathways, including through the development of infrastructure and the rapid deployment of zero- and low-emission vehicles.

The COP28 agreement marks a clear statement that an eventual transition away from fossil fuels is coming. However, we do not see the COP28 agreement as a mark for the end of the fossil fuel era, as some pundits have stated. With the development of carbon capture technology, as we transition away from fossil fuels in a just, orderly, and equitable manner, fossil fuels will continue to play an important role.

While the future of fossil fuels grabbed the major headlines through the negotiations, we see the clear support and desire for rapid renewable energy development as an equally important development.

What COP28 has shown is the unequivocal international support for the rapid uptake and development of renewable energy capacity, such as solar generation and storage, wind, and nuclear power. A tripling of renewable energy capacity globally by 2030 is an ambitious target and should spur prospective developers.

A call for increased investment and enabling conditions

The COP28 agreement recognises the critical role the private sector will play in achieving a global transition towards low greenhouse gas emissions and climate-resilient development. The private sector should be buoyed on by COP28’s plea for countries to continue to strengthen policy guidance, incentives, and regulations that foster enabling conditions to reach the scale of investments required to achieve our targets. The COP28 agreement calls on financial institutions to further scale up investments in climate action and for a continued increase in the scale, effectiveness, and simplified access to climate finance.

Recent changes to the Energy National Policy Statements from the government appear to be in line with this desire for an enabling policy and regulatory environment. The government’s recent decision to include all net-zero technologies covered by National Policy Statements as ‘critical national priority’ (CNP) infrastructure has meant all onshore and offshore energy generation that does not involve fossil combustion (including anaerobic digestion, waste conversion energy plants, nuclear and carbon capture-ready natural gas plants) will have enhanced priority. The government, in the revised Energy National Policy Statements, has signalled that the urgent need for CNP infrastructure will in general outweigh any residual harm that cannot be avoided, mitigated, or compensated.

To quote government’s own policy,

‘Government strongly supports the delivery of CNP infrastructure, and it should be progressed as quickly as possible’.

COP28’s desire for an enabling regulatory and policy environment coupled with the government’s recent policy developments should provide further certainty for developers and investors alike that the grounds for renewable energy and low emission technological development will continue to be fertile.

Opportunities and future outlook

COP28 has bolstered the already evident international desire for rapid uptake in renewable and low-emission energy development. The desire for renewable energy development, advances in nuclear technology, and the implementation of zero- and low-emissions technology is more urgent than ever before.

While a transition away from fossil fuels is on the horizon, they will still have a role to play in energy infrastructure as we transition towards a low-emissions future, particularly as carbon capture, utilisation, and storage are developed.

Overall, the major takeaway from COP28 is the need for a multi-sectoral approach to achieving the 1.5°C temperature goal. COP28 recognised that the private sector is and will continue to play a vital role in the transition towards a low greenhouse gas future. The appetite for the development of low-emission technology and the uptake of renewable energy sources such as solar, tidal, and wind shows no signs of slowing, and it will be a race to the top to meet the lofty ambitions set by COP28.

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