COP28 has concluded in Dubai with a new deal calling on all countries to “transition away” from using fossil fuels – the first time any such deal on fossil fuels has been agreed. However, critics say the deal is not ambitious enough, with a stronger message around a full ‘phase-out’ of fossil fuels omitted from the final text.

Negotiations at COP28 overran as officials worked on trying to find common ground on the wording of the first-ever global stocktake – a document highlighting the progress made since the ratification of the Paris Agreement, and addressing key challenges that must be overcome to drive change before the next global stocktake in five years’ time.

“The world needed to find a new way. By following our North Star, we have found that path,” said COP28 president, Sultan Al Jaber during his closing speech.

“I promised a different sort of COP. A COP that brought everyone together – private and public, civil society and faith leaders, youth and indigenous peoples. Everyone came together from day one. We have worked very hard to secure a better future for our people and our planet. We should be proud of our historic achievement.”

However, despite the positive mood music from the COP28 president, many remain cautious to herald victory. Manuel Pulgar-Vidal, WWF global climate and energy lead, reacted by saying that the earth “is down but not out”.

“Although it fell short of consensus on the full phase-out of coal, oil and gas, a decision to transition away from fossil fuels is a significant moment. After three decades of UN climate negotiations, countries have at last shifted the focus to the polluting fossil fuels driving the climate crisis. This outcome must signal the beginning of the end for the fossil fuel era.”

The milestone “demands greater ambition”, agreed Tara Clee, ESG analyst at Hargreaves Lansdown: “The new economy needs to be built and scaled up at pace, and while this commitment doesn’t quite turn the page on the fossil fuel era just yet it’s a step in the right direction. This presents a golden opportunity for investors to step up and accelerate the transition.”

Many other commentators remain disappointed with the outcome. Reflecting the views of many island nations at threat from climate change; professor Tahseen Jafry, director of the Mary Robinson Centre for Climate Justice at Glasgow Caledonian University, said it is disappointing the energy put into COP28 at-large is not reflected in the final text agreement.

“The need to increase by 2030 the resilience of four billion people, who are the most vulnerable to climate risks, just highlights the significance of why the move away from fossil fuels must not be underestimated. We need much more ambition to turn pledges into actionable activity on the ground. That is what counts, not words.”

Meanwhile, Sherry Madera, CEO of CDP, went further: “As headlines determine snap judgements and historic moments, every one of us must take stock and ask ourselves ‘do we really welcome this?’. Low expectations may have been exceeded, but is that really our measure of success? Yes, the first Global Stocktake has ended with a potentially momentous global agreement to transition away from fossil fuels. While this is absolutely to be celebrated, COP28 has ultimately failed to deliver a Stocktake that fulfils its potential. We are left without a crystal clear, actionable roadmap for implementation for all actors on climate and nature.”

Carbon markets agreement fails to materialise

Elsewhere in the text, an agreement on carbon markets under Article 6 of the Paris Agreement failed to materialise. Article 6 is designed to unlock climate finance via three distinct tools:

• Article 6.2: Allows countries to exchange mitigation outcomes bilaterally and to report their trade, and use them towards their nationally determined contributions.
  
• Article 6.4: Establishes a new UNFCCC mechanism for the validation, verification and issuance of high-quality carbon credits.
  
• Article 6.8: Provides opportunities for countries to cooperate towards the achievement of their NDCCS without relying on carbon markets.

According to Mark Kenber, executive director at VCMI, the lack of agreement on Article 6 at COP28 makes mobilising capital to achieve the Paris goals much harder, a view shared by Andrea Bonzanni, international policy director at the International Emissions Trading Association.

“We missed an opportunity to expedite the operationalisation of a crediting mechanism that would have set a high bar on environmental integrity, safeguards, and human rights. The delay of the Article 6.4 mechanism is not a victory for environmental integrity, it is a victory for the anti-market agenda,” commented Bonzanni.

However, Ben Rattenbury, VP of policy at Sylvera, remains optimistic about the future: “While the lack of agreement on carbon markets is a missed opportunity to add further clarity to the operationalisation of Article 6, the key thing is that bilateral trading under Article 6.2 is happening anyway, with the first trade due to complete this week. There is enough clarity and detail from previous COP decisions for this market to ramp up and drive funding to real climate solutions that would otherwise for unfunded.”