COP28 puts the heat on energy transition

What we need to see now is action and implementation. And we need to see it from leaders in politics and business.

As we turn to that task, we are in the privileged position of knowing that access to finance, at least in Australia, is rarely going to be a big impediment to taking strong action.

We are also privileged in our capacity to economically benefit from becoming a net zero economy and potentially a green energy superpower – a status that is dependent on the rapid decarbonisation of our electricity sector.

Powerful motivator

As others have noted, a key result from this COP is that it calls on the world to “transition away” from fossil fuels in energy systems.

Many had wanted a decision that called for a “phase-out”, and stronger wording would have been better. But it’s worth pointing out that the word “transition” has always proved a powerful motivating term in the development of climate change strategies and policies.

In the corporate sector, the development of a robust “transition plan” is increasingly seen as essential to ensure access to finance and to win the confidence of key stakeholders.

In a social context, the need for a “just transition” to net zero has shaped how we move towards it, ensuring that workers and communities dependent on high-emitting industries aren’t left behind as our economy transforms.

To that influential terminology we can now add the need to “transition away” from fossil fuels – and this new use of the word will inevitably become another crucial guiding principle for Australia’s climate change response.

Notably, the Carbon Market Institute’s most recent annual survey of business attitudes to climate change showed most Australian businesses want a managed fossil fuel phase-out.

However, the consensus decision from this COP will increase pressure on them to show that this desire for a managed phase-out isn’t just theoretical but is something they plan to achieve.

Regarding fossil fuels, the COP28 text also strengthens wording on methane – explicitly calling for countries to accelerate their efforts to reduce methane emissions by 2030.

Australia has recently joined the global pledge to reduce global methane emissions across all sectors by at least 30 per cent below 2020 levels by 2030. Given we are the third-largest emitter of methane, this is something we must address urgently.

Carbon market standards

Disappointingly, the COP28 official negotiations made little headway in building on important advances made at previous COPs on the structure and administration of international carbon markets.

But important progress to boost integrity and build capacity was made on the sidelines.

In particular, six major independent voluntary carbon market standards – including the widely known VERRA and Gold Standard regimes – have launched an unprecedented collaboration to boost integrity and consistency in international carbon markets.

In addition, two key international organisations that have released major reports on carbon credits integrity have undertaken to jointly produce consistent decarbonisation guidance on producing and using carbon credits in a credible way.

As we look ahead, there’s plenty to build on before next year’s meeting in Azerbaijan. The next COP in the Asia Pacific region is likely to be hosted by Australia and its Pacific partners in 2026.

As a demonstration of its desire to be a good global citizen, and to show it can effectively host an ambitious international climate conference, Australia must honour the spirit of the COP28 decision, and show that it won’t take advantage of the loopholes that inevitably appear in any international climate agreement.

At COP28, the world took stock of its climate change response, found it seriously wanting, and proposed measures that could put us back on course. Now Australia needs to act.