The 28th annual United Nations (UN) Climate Change Conference (COP28) concluded last week. It took place in Dubai from the 30th of November to the 12th of December. This year, the goal of COP28 was for all involved parties to come to an agreement on how to limit global warming to just 1.5 degrees. 

There are 198 parties that are stakeholders in the United Nations Framework Convention on Climate Change (UNFCCC). These were represented at COP28. UNFCCC’s stated goal is to prevent human-instigated damage to the climate and global weather system.

Most of you reading this news post will already know most if not all of this. But for completion’s sake, and for those who are taking an interest in the COP for the first time, it is important to provide this background.

The Main Issues Addressed at COP28

There were several top-level issues that COP28 aimed to address. As well as a number of tertiary topics that smaller groups of delegates wished to table for discussion. Some of the main topics were:

• Phasing out fossil fuels – this was the big topic, and also the most contentious of all topics raised at COP28. A significant block of delegates were pushing for the implementation of a plan to stop using fossil fuels entirely by a future date to be agreed by all parties. Later in this news post, we will cover this discussion in a little more detail, as it almost resulted in COP28 ending early.
• Geographical adaptation to climate change – this discussion revolved around the idea that each country can take measures to not just lower their impact on the environment, but also mitigate any negative effects of climate change. For instance, countries at risk of major flooding if sea levels rise even a little, should take responsibility for implementing measures to combat such flooding. Rather than relying on the help of other nations once the disaster has occurred.
• Establishment of a climate emergency fund – A proposal was tabled for a global fund to be established, that could be tapped to help poorer nations deal with damage and loss caused by climate change. Put simply, some nations simply lack the resources to proactively mitigate any negative impact of climate change. They must rely on external funding to begin tackling local issues.

These were the top three issues that were discussed at COP28. However, there were many more tertiary issues that were covered, although at nowhere near the same details as these three. Such as:

• Mitigation of currently active greenhouse gases.
• Further global restrictions on emissions.
• Funding of climate-related projects.
• Reaching net-zero emissions by the year 2050.

Phasing Out Fossil Fuels

The idea that mankind could globally stop using fossil fuels entirely, was always going to be a point of contention. Some countries have no stake in the oil and gas production industry. These countries lose little if fossil fuel use is banned globally. But of course, there are entire continents for which oil and gas production is the major contributor to the GDP.

The overall proposal was that at COP28, all stakeholders should agree that fossil fuel use will be ended some years in the future. Along this timeline, commitments to increasing the capacity for the generation of renewable energy, a reduction of methane emissions, and a general effort to make energy use more efficient, would be required from every nation.

It is not surprising that this discussion was often heated. Indeed, only some fast talking and some smart concessions kept the entire COP28 conference from falling apart.

Concessions Offered to Oil and Gas Producing Nations

The Organization of the Petroleum Exporting Countries (OPEC), consists of a number of member nations that combined, control over 80% of the global oil reserves. On the 6th of December, an internal OPEC communication was sent to all members. Its purpose was to encourage members to act together, to stop any agreement on phasing out fossil fuels at COP28 from being passed. Resulting in a proverbial immovable object meets an unstoppable force scenario.

Surprisingly, it was the USA and China, the two nations that rely most on fossil fuels, that stepped in to help reach a compromise. These two countries put forward a proposition to appease nations that rely on fossil fuel production to generate wealth. This proposition was that for oil producers, the option of cleaning up the climate impact of fossil fuel production would suffice. Utilising techniques such as carbon sequestration and capture.

How Does COP28 Impact the Oil and Gas Sector?

The elephant in the room, is that 200 nations signed an agreement to move away from fossil fuel use. Whilst this is not going to be a quick transition, it does pose the question of whether tighter sanctions and greater restrictions will be placed on the oil and gas sector at subsequent COP conferences.

As it is, oil and gas producers now need to commit to cleaning up production processes to reduce and eventually eliminate carbon emissions, rather than simply offsetting them. Whether this is an obtainable goal remains to be seen. But what we can say, is that the world is now looking at the fossil fuel sector with greener eyes. Continuing to operate in the oil and gas industry will only become increasingly difficult as more and more restrictions and requirements are put in place.

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