Good morning, friends. After months of anticipation and hand-wringing over the choice of host country, COP28 is finally kicking off today in Dubai. The UAE will host the summit from today through to Tuesday, 12 December. Let’s dive right into what you need to know this morning as opening ceremonies commence.

IT’S KICKOFF TIME- Here’s a handy guide (pdf) for the main thematic days and what to expect. Head to the official events schedule for a full rundown of all the panels, workshops, discussions, debates, and keynote speeches.

DAYS TO LOOK OUT FOR-

4 December: Finance and Trade

5 December: Energy and Industry + Just Transition

6 December: Transport

10 December: Food, Agriculture, and Water

10-11 December: Final Negotiations

HAPPENING THIS WEEKEND-The World Climate Action Summit is kicking off on Friday and carrying on into Saturday. The event will gather heads of state and government along with leaders from various sectors of civil society and business to discuss concrete actions and plans aimed at scaling climate action. The summit will serve a vehicle for major announcements, providing momentum and guidance to the remainder of the COP.

HERE’S FIVE TOPICS WE EXPECT TO HEAR A LOT ABOUT-

#1 The Loss and Damage fund: After months of contention and debate, the recommendations due to be presented to governments at COP28 on how the loss and damage fund will be operationalized was finally approved earlier this month despite reservations by developing nations and the US. The transitional committee — which represents a geographically diverse group of countries — agreed to recommend the World Bank serve as trustee and host of the fund for a four-year period, a point that has caused divisions between the global north and south. UAE’s COP28 President-designate Sultan Al Jaber emphasized the importance of ensuring the loss and damage fund is operationalized at COP as no country yet announced a specific financial pledge to the fund, though some have signaled their intent or interest.

#2 Reform, reform, reform: While not on the official agenda, Al Jaber called on multilateral development banks (MDBs) to work through country platforms, revise climate finance targets for coming years, and lower the risk for the private sector. The International Monetary Fund (IMF) will also play a role in deploying climate finance. The IMF’s board of directors is currently reviewing using SDRs on-lent to them as hybrid capital that could then be leveraged to expand their lending capacity. Al Jaber also invited the IMF to a high-level event on Finance Day at COP28 on international financial institution reform. More world leaders are also expected to endorse the debt pause clauses and debt-for-nature swaps. The World Bank is also expected to engage in talks under its updated mission to include climate change.

#3 More funds pledged for the Green Climate Fund (GCF): Countries are expected to replenish the fund at the conference, with Gulf states being pressured to contribute. Some companies like the UK and US already made pledges, yet many more are expected to put an amount to their contribution.

#4 The Global Stocktake: Assessing article 2.1(c) of the Paris Agreement, The Global Stocktake will measure progress towards the goals of the agreement for the first time. Al Jaber called on South Africa’s Minister of Environment, Forestry and Fisheries Barbara Creecy, and Danish Minister for Development Cooperation and Global Climate Policy Dan Jørgensen to conduct consultations with Parties, Groups, and constituencies, on critical elements regarding the outcome of the first global stocktake at COP28. Look out for discussions on the 1, 2, 12, and 14 December according to the COP28 schedule.

#5 Carbon Markets: We expect to see more details to establish international trading for carbon offset credits at COP28. Several countries are expected to announce financial pledges that were agreed on at COP26 to regulate the trading of carbon credits. The COP28 presidency will host carbon market discussions at the Compliance Carbon Market meeting on 4 December. The Dubai Financial Market (DFM) plans to launch its maiden voluntary carbon market (VCM) during COP28 as well.

THE LATEST IN COPLAND AS THE CLOCK TICKS DOWN- Pope Francis will not attend the summit after all: Pope Francis will follow his doctors’ request and cancel his trip to attend COP28, according to a statement. Earlier on Tuesday, the Vatican had said the sovereign pontiff would go to the UAE on a three-day visit despite having fallen ill over the weekend. Francis is still willing to take part in discussions at the summit over the next few days, possibly via video link. The story made headlines in the international press: BBC | Reuters | Deutsche Welle | France 24 | CNBC | The Guardian | ABC News | The Wall Street Journal

AN ADDITION TO THE GUESTLIST- No-show Joe is dispatching his VP: US Vice President Kamala Harris will attend COP28 along with Secretary of State Antony Blinken and other high-ranking American officials, Bloomberg reports.

THE WARRING WORDS CONTINUE- Four different shades of denial from Al Jaber: COP28 President-designate Sultan Al Jaber denied allegations of planning to use the climate conference to push oil agreements, Reuters reports. “These allegations are false, not true, incorrect and not accurate,” Al Jaber told reporters yesterday. “It’s an attempt to undermine the work of the COP28 presidency. Let me ask you a question: do you think the UAE or myself will need the COP or the COP presidency to go and establish business or commercial relationships?” Al Jaber added. Leaked documents seen by the BBC and the Centre for Climate Reporting found the COP chief planned to leverage upcoming meetings with foreign governments including China, Germany and Egypt to hammer out agreements for new oil and gas drilling projects.

A STARK WARNING FROM THE IMF- “Business as usual” is not viable if the world wants to manage global warming, IMF head Kristalina Georgieva told Reuters ahead of the summit. Pledges to reduce climate-damaging carbon emissions are at 11% when they need to fall 25-50% by 2030, Georgieva said. She also stressed the importance of ensuring funds are available for climate vulnerable countries, adding that the African Development Bank and the Inter-American Development Bank have proposed using Special Drawing Rights (SDRs) on-lent to them as hybrid capital that could then be leveraged to expand their landing capacity, which the Fund’s board of directors is currently reviewing. Georgieva stressed that carbon emissions need better pricing and an incentive is needed for rapid decarbonization, whether through carbon taxes or trading systems. Whichever method is chosen needs to cover methane emissions and ensure that rich countries pay more, poorer countries pay less, and fragile countries pay nothing, Georgieva said.

COP28 sponsors have not pledged net zero targets: Only one of the 24 sponsors of COP28 have signed up to the UN-backed net zero targets, The Guardian writes, citing analysis by corporate accountability firm Spendwell. This includes US oil giant Baker Hughes and the Bank of America as well as global accountancy firm EY, which was hired as the independent verifier of the climate record of all the sponsors. Spain’s Iberdrola is the only sponsor yet to pledge the targets. “The fact that so few of the sponsors are signed up to their net zero targets, and that EY itself, chosen to verify the climate commitments of the sponsors, doesn’t have set targets yet, suggests this is just greenwashing,” said Spendwell’s Lincoln Bauer, who conducted the analysis.

REMEMBER- Methane curbs will be in the spotlight at COP: Drafting a legally binding agreement to phase out methane emissions should be a priority for the COP28 summit in order to meet global climate targets, the World Bank’s former Climate Envoy Rachel Kyte told Reuters this week. The US Methane Finance Sprint — which aimed to mobilize at least USD 200 mn during COP28 to help developing countries curb greenhouse gas emissions — will reportedly exceed its targets. 150 nations have also signed up for the Global Methane Pledge — first proposed in 2021 to push down methane volumes by at least 30% by 2030.

ExxonMobil is (finally) on board with methane monitoring: ExxonMobil has agreed to join the Oil and Gas Methane Partnership, a UN-led reporting framework to monitor emissions of the greenhouse gas, after years of resisting external monitoring of its approach to climate change, the Financial Times reports. The company had remained reluctant to join the program as recently as last May, when shareholders were urged to vote against a resolution for the company to join the program during the company’s annual meeting. Exxon’s decision to join the partnership makes Chevron the only Western supermajor to not join the program, according to the FT.

WATCH THIS SPACE #1- The Global Environment Facility will extend USD 12 mn for four of Egypt’s climate projects: Four Egypt-based projects in renewables, green hydrogen, environmental restoration, and livestock production will collectively receive a USD 12 mn funding package from the Global Environment Facility (GEF) co-financed by the World Bank and the United Nations, Egypt’s Environment Minister Yasmine Fouad told Al Mal. The developers of the green power plants, individual investment tickets, and targeted generation capacities for the projects were not disclosed.

A few of many: 44 national projects had applied for funding under GEF and the government will look to other avenues for financing for the unselected projects. GEF has provided more than USD 23 bn and mobilized another USD 129 in co-financing toward 5k projects globally focused on tackling the climate crisis, biodiversity loss, and land and oceanic degradation. The facility has channeled more than USD 48 mn in financing toward development projects in Egypt to date.

WATCH THIS SPACE #2- 12 countries, including Morocco, are turning to nuclear in a bid to boost decarbonization: Morocco is among 12 economies looking to source energy from nuclear power to meet climate action targets, Reuters reports, citing comments by Director General of the International Atomic Energy Association (IAEA) Rafael Mariano Grossi. To meet the Paris-agreed 1.5°C warming threshold, the amount of atomic energy plants needs to double from the current 400 units, Grossi said, adding that 10 countries have entered into the decision phase of building new nuclear power plants. 17 countries have also entered the evaluation phase, and countries including Kenya, Nigeria, the Philippines, Kazakhstan and Uzbekistan will potentially build nuclear reactors “within a few years,” he added.

DATA POINT- The world needs USD 13.5 tn for a net zero future: Around USD 13.5 tn in investments are needed — especially in manufacturing, energy, and transportation — by 2050 to build a carbon neutral future, a new report (pdf) by the World Economic Forum and Net Zero Industry Tracker found. The total investment amount would cover clean energy costs, nuclear and geothermal power and clean hydrogen, transportation, and storage costs. The report also highlighted the need to focus on prioritizing clean energy tech in all sectors, upscaling carbon capture and storage, reducing green hydrogen costs, and developing the infrastructure for industrial clusters.

AND- Global energy efficiency efforts need to double from current levels to meet 2030 climate targets, according to a new report (pdf) by the International Energy Agency (IEA). Though investments in energy efficiency have increased by 45% since 2020 leading to a 1.3% uptick in energy conservation this year compared to 2022, the rate of improvement has declined from the 2% energy savings reached in 2022 compared to 2021, and investments in the energy efficiency sector need to be doubled to reach a 4% conservation rate annually by 2030 if the 1.5°C Paris-agreed warming limit is to be realized, the IEA notes. A 4% energy efficiency rate could cut today’s energy bills in advanced countries by a third and make up 50% of CO2 reductions by 2030, the IEA notes.

But rising inflation will likely drive down investments this year: Despite “historically high levels” of investments in the energy efficiency sector of USD 620 bn this year compared to pre-covid levels, inflation of energy efficiency project costs coupled with rising interest rates are expected to push down investment growth to just 4% in 2023 from an average 20% for the previous two years, IEA notes. Energy efficiency investments have totalled USD 700 bn since 2020, with 70% of the financing channeled by the US, France, Italy, Norway, and Germany.

DANGER ZONE- Climate-driven coastal flooding to increase fivefold this century: The impact of climate change on coastal flooding is set to quintuple by 2100, putting some 73 mn in the path of expanding floodplains, the UN warned earlier this week. The report relies on data gathered by the UN’s Human Climate Horizons, which mapped out where sea-level rise impacts may most threaten homes and infrastructure. Under current climate action strategies aimed at curbing the impact of global warming and rising sea levels, an estimated five percent of the population of the world’s coastal cities will be exposed to increased inundation risks by 2050, with the number set to double by the end of the century, posing a considerable threat to human development in affected regions, the UN warns.

MENA is under threat: The impact of sea-live rise will echo in our part of the world. Approximately 160k sq km of coastal land would be inundated by 2100, including “vast stretches of coastal cities” in Saudi Arabia and the UAE, the UN says. Stepping up climate action strategies to curb global warming to below 2°C could see 70k sq km of the land remain above sea level, the UN notes.

One in 20 coastal cities live with flooding threats every year: Climate-driven sea level rise has upped the scale of coastal flooding globally over the past two decades, rendering one in 20 coastal cities under annual threat of being battered by coastal torrents and threatening an additional 14 mn people compared to flooding levels 20 years ago, the UN says. Earlier this year, a wider group of climate vulnerable islands led by Vanuatu — which faces the threat of becoming completely submerged by the end of the century — asked the International Court of Justice to issue its assessment of what countries are obliged to do in order to make sure that global temperature rise is kept below the Paris Agreement target of 2°C.

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CIRCLE YOUR CALENDAR-

Oman will host its Green Hydrogen Summit from Tuesday 12, December through to Thursday, 14 December in Muscat. The two-day event will bring together green fuels developers, renewables companies, and policy makers in a bid to chart a course toward carbon-neutrality by 2050. Aside from the conference, the summit will also include masterclasses delving into the specifics of the green hydrogen value chain, from green electricity production to H2 production, distribution and storage. You can register for the event here.

Saudi Arabia will host theFuture Minerals Forum from Tuesday, 9 January through to Thursday, 11 January in Riyadh. The event will bring nations and private sectors together to enable the creation of resilient mineral value chains in the resource rich regions of Africa, Western Asia, and Central Asia. The forum will hold a ministerial roundtable with over 60 countries being represented., and delegates will discuss global critical mineral strategies as well as an international exhibition with over 150 exhibitors and industry sponsors.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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