How the COP28 deal was won but the battle for 1.5C may be lost

European diplomats fanned out across the expansive grounds of the futuristic conference venue in Dubai on Tuesday in a final push to galvanise support for a global agreement to dump fossil fuels.

The most intense phase of the talks in the final days of the two week long UN COP28 climate summit exposed deep divisions between wealthy and poorer countries over the costs of halting new coal, gas and oil projects. 

Almost 200 countries on Wednesday signed a compromise agreement to transition from fossil fuels that some — including the group of 39 small island states that were not present for the outcome as they scrambled to gather their response — accused of not going far enough.

After the deal was struck, the world’s largest oil and gas producer expressed an understanding for those countries that are economically reliant on fossil fuel production.

“I would love it if certain countries had come here and signed on the dotted line and said, ‘we’re finished’,” said John Kerry, the US’s top climate diplomat, referring to fossil fuel production.

“But no, you know, one minister from one of those countries said ‘John, you can’t ask us to commit economic suicide’.”

Sultan al-Jaber, president of COP28 and head of the Abu Dhabi National Oil Company, courted dozens of diplomats and ministers overnight on Tuesday to back the compromise deal.

This included successive meetings with China’s climate envoy Xie Zhenhua and Saudi Arabia’s energy minister Prince Abdulaziz bin Salman, half-brother of Crown Prince Mohammed bin Salman, who led the resistance to any suggestion of cuts in fossil fuel production.

The talks, which pushed the world’s most important climate summit almost 24 hours beyond its deadline, exposed the deep dividing lines with the countries suffering disproportionately from climate change.

Small island nations are on the frontline of climate change and argue that high levels of debt and high borrowing costs leave them unable to cope with extreme weather events fuelled by global warming.

Mona Ainuu, minister for natural resources from the atoll Niue, broke into tears on Monday night as she told reporters: “We need help in the Pacific. We’re drowning as the sea levels rise.”

But other governments, notably in Africa and Latin America, argue that exploiting their oil and gas wealth is key to their economic development.

Colombian official Sebastian Carranza Tovar said his country was taking the climate science “seriously”, despite being highly dependent on coal to fund its health and education systems. He described the need for fossil fuel revenues as “one of the most complex problems to solve”.

Avinash Persaud, a negotiator and special climate envoy to Barbados, said any commitment to immediately phase out fossil fuels would be “meaningless” without “the trade, investment and finance to achieve it”.

Ultimately, some of these countries found themselves striking a grand bargain to collectively transition from fossil fuels in exchange for an acknowledgment that more money should be made available to poor countries for climate action, beyond the seed capital of some $420mn pledged on the first days of the summit for a loss and damage fund.

The final COP28 deal underlined the importance of overhauling multilateral developing banks, such as the World Bank, and called on shareholder countries to “significantly scale up the provision of climate finance”.

Under the agreement, countries also backed “accelerating” the establishment of “new and innovative sources of finance”, such as new taxes to pay for the shift away from fossil fuels.

But critics argued the agreement was not strong enough on financing, especially for the developing world, and meant the discussion on how to pay for climate change would be pushed further out to COP29 next year.

The International Energy Agency has said $4.5tn will be needed each year for clean energy alone by the early 2030s, up from $1.8tn now.

“Those most responsible for the climate crisis did not bring finance, technology, or actions to start phasing out fossil fuels,” said Alex Rafalowicz, executive director of the Fossil Fuel Non-Proliferation Treaty Initiative, a campaign that has the endorsement of a bloc of nations and states pushing for a shift away from coal, oil and gas.

Teresa Ribera, deputy prime minister of Spain and co-head of the EU’s COP28 delegation, spent 24 hours negotiating with dozens of countries to drum up support for a more ambitious outcome.

Speaking after a night where she slept for an hour-and-a-half on a sofa in the Spanish offices on the Expo site, Ribera told the Financial Times the UAE consensus was a “very good deal” that had “been very hard to get”.

“We managed to capture the momentum . . . for a shift from a fossil fuel world towards the fossil fuel free world,” she added.

It sent a “very powerful signal” that governments across the world planned to step up action on climate change and overhaul their economies to transition away from fossil fuels, she said.

She suggested investors and businesses would now closely watch countries to see how they put the agreement into practice, in spite of the failure of financial markets to react to the COP28 agreement.

“I don’t expect a huge [immediate] reaction from stock markets, a big slowdown of oil companies and the rise of renewables companies,” she said. But over time, “it is going to be going smoothly up in one direction and smoothly down in the other direction”.

UN climate body chief Simon Stiell said the Dubai “outcome is the beginning of the end” for the fossil fuel industry. “Now all governments and businesses need to turn these pledges into real-economy outcomes, without delay”.

Alden Meyer, senior associate at the climate think-tank E3G, said now countries would be expected to submit new, more ambitious, climate targets. “Everyone’s got to rethink what they’re doing based on this decision.”

“Whether that’ll happen is a tall challenge — there’s no legal obligation. It’s just the obligation of ‘what world do you want to leave to your children, to your grandchildren?’ That’s the obligation.”

A triumphant Jaber on Wednesday told the UN plenary session that the UAE-led agreement would preserve the COP28’s “north star” to limit the global temperature rise to no more than 1.5C above pre-industrial levels.

The agreement includes recognition of the UN conclusion that a cut in greenhouse gas emissions by 43 per cent by 2030 compared to 2019 levels, is needed to limit the global temperature rise to 1.5C. This remains far out of reach — instead emissions are expected to rise another 2 per cent this year.

Many scientists questioned whether it was strong enough to halt greenhouse gas emissions quickly enough to limit global temperature rises.

Johan Rockström, co-director of the Potsdam Institute for Climate Impact Research, said the COP28 agreement was a “pivotal landmark” but it “will not enable the world to hold the 1.5C limit”.