As is tradition, COP28 went into extra innings in Dubai until this morning, when negotiators came through with a deal marking a crucial first in the history of climate negotiations. The final text of the Global Stocktake agreement states the need to “move away” from fossil fuels, while “calling on” the world to triple renewable energy and double the annual rate of energy efficiency improvements by 2030.

As we discussed last week, there is still plenty of room for skepticism about any COP agreement due to its fundamental misalignment with the realities of climate change. Words on paper do not take carbon dioxide out of the atmosphere, nor do they cancel new coal power plants, and we will have to track progress in the coming months and years before firmly understanding the legacy of COP28.

Still, the inclusion of language that falls short of a “phase-out” is a moral victory against high-level attempts to dismiss the basics of climate science on the world stage. The conference also produced some notable progress for climate action.

To that end, the good people at Carbon Brief have put together an excellent interactive graphic to track the status of all 94 agenda items on the table at this year’s conference.

All told, most of the issues on the agenda going into COP28 moved forward. 51 agenda items are either agreed or near agreement, among them a breakthrough set of accords and commitments to climate justice through loss and damage funds. 15 agenda items are still lacking an agreement, but diplomats have put forth draft texts that could be concluded in the coming days or in future sessions.

There were also some notable shortcomings. Negotiators failed to strike a deal on 28 agenda items, including some critical issues like strengthening rules and regulations in carbon markets. Most of those postponed items have been filed under “Rule 16”, which is Paris Agreement jargon meaning they won’t be taken up for consideration again until next year’s COP in Baku.

While the COP process is not the climate conference the world wants or needs, it is the one we have, and this year’s summit produced some victories that we will look at today.

Wins- Loss & Damage Funds

The Loss and Damage Fund is a pot of money established at COP27 to collectively pay for the existing impacts of climate change.

There are three loss and damage initiatives currently within the framework of the Paris Accords: the Loss and Damage Fund, the Santiago Network for LD and the Warsaw International Mechanism. Negotiators agreed to make progress on all three agenda items at COP28, indicating that climate justice is an area of growing consensus in climate diplomacy.

This fund is the result of nearly thirty years of advocacy from vulnerable countries, namely low-lying island nations like Tuvalu, whose foreign minister recorded a speech for COP26 while standing in knee-high water. This year’s conference yielded $665.9 million in pledges from developed countries like the United States and the UK, as well as newcomers, such as the United Arab Emirates.

The Warsaw International Mechanism was established in 2013, providing the first structure inside of the UNFCCC to follow through on commitments to loss & damage.The Santiago Network for Loss & Damage was established at last year’s COP in Egypt and provides technical assistance to developing countries building out measures to adapt and mitigate climate impacts.

There is still some controversy among diplomats about how to best disburse the funds. This year, the World Bank took charge of the project over the objections of developing countries, who argued that the organization is dominated by wealthy countries who have already demonstrated a reluctance to pay their fair share. Despite this, COP28 represents the first time that climate diplomacy delivered tangible results with an adequate structure to deliver climate justice.

Along with Loss and Damage, agreements on the Adaptation Fund also moved forward this year. The Adaptation Fund has already led to successful projects in countries vulnerable to climate change. One program helped a development bank in India re-establish mangrove forests in the Krishna Delta that has improved fish stocks for local fishing communities while also providing a buffer against floods and stronger monsoons.

Losses- Carbon Market Rules

Negotiators went into COP28 hoping to finalize rules and operationalize carbon markets under what’s known as Article 6 of the Paris Climate Accords. But this time, diplomats failed to reach an agreement on two of the major pillars of Article 6, setting back fast-developing carbon markets for another year until the next COP.

If that sounds familiar to you, it’s because negotiating Article 6 has been the focus of almost every COP since the Paris Agreement in 2015. This year, carbon market rules were expected to fly “under the radar” as a priority, and perhaps that diminished focus contributed to the failure to find consensus.

There are two sections of the Paris Climate Accords that deal with the brass tacks of establishing rules for private and compliance carbon markets. Article 6.2 establishes the framework for countries to account and trade emissions along the same set of rules (compliance markets). Article 6.4 addresses the international rules for companies and private entities (voluntary markets).

One of the main issues of contention was an insistence by the United States to take a “light touch” approach that would keep the details of voluntary transactions confidential. A bloc of countries from the EU, Africa and Latin America disagreed, suggesting that the approach gave too much leeway for dubious carbon deals that have brought negative publicity to the sector.

The concerns around voluntary markets have been well documented this year, including in this newsletter. Aside from the uncertainty associated with methodologies, which have plagued projects in China and Indonesia, there are also increasing human rights concerns around displacing indigenous communities from forests for the sake of generating carbon credits.

It should be noted that while many of the highly-publicized issues in voluntary carbon markets have surrounded forest credits, known as REDD+, the vast majority of delivered carbon credits in 2023 came from biochar. Biochar is generally more compatible with existing MRV frameworks and is not associated with human rights violations, but those issues are nonetheless limiting what could be a major carbon asset class.

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