COP28 Blog: Wrapping up – the Global Stocktake and Article 6 Negotiations

Introduction

After tense and protracted negotiations which went 24 hours past the formal end time of COP28, a text on the Global Stocktake was eventually finalised by Parties.

The initial hope from some Parties for a pledge to ‘phase out’ fossil fuels proved to be polarising and was removed from the final decision. Nonetheless, the final text of the Global Stocktake which has emerged from COP28 incorporates language which signposts the need to transition away from fossil fuels, in order to achieve the goals of the Paris Agreement to the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

Negotiations over the operationalisation of Article 6, which allows for carbon markets to be used by countries to achieve their Nationally Determined Contributions (NDCs), were highly anticipated in the lead-up to the conference. However reaching a consensus over key texts proved difficult, with Parties only reaching agreement on Article 6.8 (relating to non-market mechanisms).

This article discusses the progress of negotiations in the final days of COP28, and the key elements of the agreed texts.

Global Stocktake

COP28 marked the first Global Stocktake since the finalisation of the Paris Agreement. The Global Stocktake is intended to inform Parties on how they should update and enhance their actions and support in order to achieve the objectives of the Paris Agreement. The themes covered by the Global Stocktake included mitigation, adaptation, finance, technology development and transfer, and capacity building. A key element, which originally emerged from COP27, was the inclusion of provisions dealing with loss and damage (on which agreement was reached at the outset of COP28 – read more about this fund in our previous legal update).

Finalising the Global Stocktake text became very fraught in the final days of the COP (which ran overtime by a day) On the second last day of COP28, a draft decision emerged which removed any reference to a ‘phase out’ of fossil fuels.¹ Instead, although the draft text recognised the need for deep, rapid and sustained reductions in greenhouse gas (GHG) emissions, it only called upon Parties to take actions that could include a number of things, such as reducing the ‘consumption and production of fossil fuels, in a just, orderly and equitable manner so as to achieve net zero by, before, or around 2050 in keeping with the science’.

There was significant criticism of this text by some Parties, with the Chair of the Alliance of Small Island States stating “Paragraph 39 of the GST text draft includes weak language on fossil fuels that is completely insufficient. It does not refer to a phase out at all. It presents a menu of options that states “could” take. “Could” is unacceptable. States must take action on fossil fuel phase out”.²

Heavy negotiations took place between key Parties over the final 24 hours, with a text emerging and ultimately being adopted on Wednesday morning (Dubai time).³ In the context (or scene setting) section, serious concern is expressed over the fact that 2023 is set to be the warmest year on record and impacts from climate change are rapidly accelerating. Reference is repeatedly made to the fact that this is the critical decade in terms of keeping the 1.5 degree goal in reach.

The controversial paragraph 39 of the previous draft was replaced with a paragraph that called on Parties to contribute to a number of listed matters, including “transitioning away from fossil fuels in energy systems”.⁴ In addition, the listed matters reference tripling renewable energy capacity and doubling the global average rate of energy efficiency improvements by 2030, accelerating efforts towards the phase-down of unabated coal power, for example, by utilising carbon capture and storage, and phasing out inefficient fossil fuel subsidies as soon as possible.

This paragraph followed one which recognised that limiting global warming to 1.5 degrees requires deep, rapid and sustained reductions in global GHGs, with targets of 43% by 2030 and 60% by 2035 relative to the 2019 level and net zero by 2050.⁵ These quantified targets will underpin new NDCs due to come forward in 2025.

Elevation of nature

The interconnectedness between the climate and biodiversity crises also informed the outcome of COP28. The final decision emphasises the importance of conserving, protecting and restoring nature and ecosystems to achieving the Paris Agreement temperature goals, including through halting and reversing deforestation and forest degradation by 2030 and conserving biodiversity in line with the Kunming-Montreal Global Biodiversity Framework.⁶

Next NDCs

The Global Stocktake text reaffirms the approach of NDCs. It encourages Parties to come forward in their next NDC with ambitious, economy-wide emission reduction targets, covering all GHGs, sectors and categories and being aligned with the 1.5 degree goal. The next NDCs are intended to be put forward by Parties in 2025.

Article 6 Negotiations

It had been anticipated that Rules to support the further use of Article 6 of the Paris Agreement (which contemplates the global use of carbon markets to assist countries to meet their NDCs) would be approved at COP28. Unfortunately, the negotiations in relation to Article 6.2 (co-operative approaches between Parties) and Article 6.4 (Sustainable Development Mechanism) broke down and no text was able to be agreed for these topics. The Parties were, however, able to reach agreement on a draft decision text for Article 6.8.⁷

Article 6.8 relates to achieving NDCs through non-market-based cooperation, including promoting mitigation and adaptation ambition and enhancing participation of public and private sectors in implementing NDCs. COP28 negotiations focused on finalising a web-based platform to record non-market approaches. A target has been set for the platform to be fully operationalised and deployed no later than the 5th meeting of the Glasgow Committee on Non-market Approaches, in June 2024.

Expressing “regret” in relation to the lack of consensus, the International Emissions Trading Association (IETA) issued a press release reminding Parties that market-based cooperative approaches under Article 6.2 can and must continue to be implemented to deliver rapid cuts in emissions, notwithstanding the failure to finalise the next set of Article 6.2 rules.⁸

Where to from here?

The Global Stocktake text, although not including the “phase out” wording, is still significant in signposting the need to “transition away” from fossil fuels.

Significant further requirements for funding have been highlighted, including US $5.8-5.9 trillion to assist developing countries meet their NDCs prior to 2030 and US $4.3 trillion in clean energy per year up to 2030, and US $5 trillion post 2030, in order to reach net zero by 2050.

There are significant opportunities for the private sector to play a key role in the transition, including through the use of voluntary carbon markets. We will publish a further update in due course about some critical developments that took place during COP28 in relation to the voluntary carbon market.

Previous updates from throughout COP28 can be found on our COP28 portal.