EU Cop28 between renewable targets, energy efficiency, and global carbon price

Brussels — On the one hand, set a global carbon price. On the other, introduce global binding targets on renewable targets and efficiency. Two key priorities will mark the mandate of the European Union at the next Cop28, the UN Conference on Climate Change, which will formally kick off tomorrow (30 November) in Dubai, United Arab Emirates. The curtain will rise tomorrow, but for Brussels, the politically decisive days will be Friday and especially Saturday, when the President of the European Commission, Ursula von der Leyen, will formally announce the global initiative to triple (compared to the 2022 estimates) the installed capacity of renewable energy up to 11 TW and double the rate of energy efficiency improvement by 2030. 

The initiative had been announced by the German leader seven months ago, in her speech to the Forum of the main economies on energy and climate organised by the US administration and hosted by Joe Biden. Since then, as we learned in Brussels, the initiative has been joined by at least 100 countries and others could join it during the upcoming summit days in Dubai. Both targets should be measured in relation to the targets of 2022. As widely anticipated in recent months by the European Commission, as far as green energy and consumption saving are concerned, the European Union will aim at the UN Conference on Climate Change to raise global ambitions, after recently increasing the European ones both in terms of renewables and efficiency.

Energy will be one of the EU’s major priorities at Cop28 as at least two-thirds of the emissions come from the energy sectors. But it will not be the only one. The focus will also be on increasing climate finance, given the need to switch from billions to trillions. In 2009, an objective was set to reach 100 billion dollars per year for the poorest countries by 2020, which was achieved only last year, with two years of delay.

This year the participants should lay the foundations for a new funding target after the 100 billion one. According to Brussels, the key to increasing resources is to determine a global carbon price and direct revenues to a “treasure” for climate financing. The European Commission will insist on this. The European Union introduced in 2005 its emissions trading system, the carbon market Ets, with which – according to the data outlined by von der Leyen a couple of months ago – it has achieved revenues of 142 billion euros and at the same time a 35 percent reduction in emissions.
Brussels is convinced that setting a carbon price is one of the most effective instruments to cut emissions so as to force polluters to pay a tax. The Commission confirms that it is working with interested countries to make sure that at least 60 percent of global emissions are covered by carbon pricing by 2030. To date, only 33 percent is covered, with revenues of at least 95 billion dollars.

On the other hand, it seems certain that already in the first days of the Conference the “loss and damage fund” will be operational, for which an agreement has been reached in principle in recent days between the negotiators of the parties. Last year, during COP27, the countries agreed to launch a fund for losses and damages together with a temporary committee to guide its implementation. After the agreement of principle reached in recent weeks, it seems likely that the agreement on the Fund will be formalized. From 8 to 12 December, a delegation of the Eurochamber will be present at the Conference.