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Summary of COP28 - Day 5: Climate Finance and Carbon Offsets
Key Developments:
COP28 President’s Statement on Fossil Fuels: COP28 President Al Jaber, after facing criticism for previous comments, stated that the phase-down and phase-out of fossil fuels is inevitable, acknowledging the science behind the need to limit global warming to 1.5C. This statement highlights the ongoing debate between “phase down” vs. “phase out” of fossil fuels.
Climate Finance Commitments: The first four days of COP28 saw a collective commitment of USD $57 billion in climate finance from various sectors. This amount, though significant, still falls short of the global investment needs for climate action.
Regulation of Carbon Markets: The U.S. Commodity Futures Trading Commission (CFTC) proposed guidance for the listing of voluntary carbon credit derivative contracts. This is the first specific guidance targeting the voluntary carbon market (VCM) by a federal U.S. regulator and will be open to public comments until February 16, 2024.
Business Implications: The COP Presidency’s acknowledgment of fossil fuel phase-out is seen as an attempt to regain goodwill and will impact future energy policy negotiations.
The growth in climate finance creates opportunities for the private sector, and companies should assess how new climate finance pledges may affect their business sectors.
The proposed regulation of the VCM by the CFTC indicates a move towards stricter rules across jurisdictions, following similar actions in California and the EU.
Leve Global’s Comments on Day 5
We view the developments of COP28 Day 5 with a critical eye. The acknowledgment by COP28 President Al Jaber of the inevitability of fossil fuel phase-down and phase-out is a step in the right direction. However, for SIDS, this statement comes as too little, too late. The Caribbean region is already facing the brunt of climate change impacts, and any delay in concrete action to reduce fossil fuel dependence globally means more immediate and severe consequences for our islands. The debate between “phase down” vs. “phase out” feels like a luxury that SIDS cannot afford, as we require urgent and decisive action to mitigate climate impacts.
The move by the U.S. Commodity Futures Trading Commission to regulate carbon markets is an important development, but it raises concerns about the implications for SIDS. While regulation is necessary for transparency and accountability, there is a risk that stringent regulations could create barriers for smaller nations in accessing carbon markets or leveraging them for sustainable development. It is crucial that these regulations are designed in a way that does not disadvantage SIDS, who are among the most in need of innovative financing mechanisms for climate action.
Day 5 of COP28 brought important issues to light. However, we at Leve Global, urge the international community to ensure that the needs and voices of SIDS are not just heard but actively prioritized. The Caribbean and other SIDS cannot be left behind in the global climate agenda, and we need concrete actions and relevant policies that reflect the urgency and specificity of the most vulnerable countries.
What are your thoughts on Day 5? Please leave your comments below.
Read our summary on Day 6 here.
Check out our summaries on other days:
Day 8 (Coming Soon)
Day 9 (Coming Soon)
Day 10 (Coming Soon)
Day 11 (Coming Soon)
Day 12 (Coming Soon)
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About the Author:
Kevon Wilson
Senior Analyst
Leve Global
Kevon Wilson, is a premier researcher and strategist. He has more than 16 years’ experience in research and digital marketing.
He is co-author of many of Leve Global’s research publications such as Big Data – Delivering the Big Picture to Drive Competitiveness, Everything You Need to Know About Internet Marketing, and The Top Ten Emerging Markets.
