It’s all over bar the shouting. As the UN COP28 climate summit wound down in Dubai, agreement was reached on the final energy provisions text.
While flawed, and falling short of the ambitions of many in the climate movement advocating for a target to end fossil fuels, it did deliver an outcome that finally names and shames the key climate culprit – fossil fuels in our energy system.
Ironically, the focus on fossil fuels delivered by the UAE’s COP Presidency helped drive an outcome that has eluded climate negotiators for the last 30 years.
For the first time, nations agreed on tripling renewables this decade and transitioning away from fossil fuels to achieve net zero by 2050. Astonishingly, in the 30 year history of the UN COP climate negotiations, renewables have never previously gotten a mention.
The text recognises “the need for deep, rapid and sustained reductions in greenhouse gas emissions in line with 1.5°C pathways”.
And while language around a phase out of coal is absent, it includes language calling on nations to accelerate efforts “towards the phase-down of unabated coal power”, reflecting similar language at previous summits.
Businesses and investors, en masse in Dubai, now leave with a shared direction to invest in accelerated clean and green energy system deployments across the world. Financing these will be a big focus for COP29.
It is imperative that the world collectively crowd-in global pension capital and bank debt consistent with the need to treble the US$1.8 trillion of global investment in 2023 to US$4.5 trillion annually by 2030, as modelled by the International Energy Agency’s (IEA) Net Zero Emissions (NZE) scenario, and the higher US$5-7 trillion estimates by BloombergNEF.
The writing instructions are also set for nations to develop new emission reduction targets in line with 1.5°C pathways and submit them ahead of COP30.
This COP also called for the development of a list of “zero- and low-emission technologies” including “renewables, nuclear, abatement and removal technologies such as carbon capture utilisation and storage, particularly in hard-to-abate sectors, and low-carbon hydrogen production”.
It is concerning that false solutions like carbon capture and storage (CCS) were elevated in the decision. CCS as a key prerequisite requires a high, regulated price on CO2, something we are a long way away from, barring the EU and UK.
Putting aside Enhanced Oil Recovery (EOR, sometimes called carbon capture, utilisation and storage, or CCUS), there is no evidence to date across the world of the commercial and consistent operation of CCS at a scale. It is an excuse for fossil fuel polluters to keep polluting.
And while nuclear is established in some countries, it is not a viable solution for Australia in a timeframe necessary to address our concurrent climate, energy and cost of living crises, ie. this critical decade.
Also concerning was inclusion in the text of a role for ‘transition fuels’ in energy security, implying gas, again contrary to the IEA NZE modelling that shows a 72% reduction in gas globally by 2040.
However, in the context of international climate negotiations, which as realpolitik dictates, deal in the art of the possible, this does not overshadow the clear direction taken by the global community – to back in renewables and step back from fossil fuels.
At COP28, Climate and Energy Minister Bowen said it best: ‘We must face this fact head on: if we are to keep 1.5°C alive, we must peak emissions by 2025 and fossil fuels have no ongoing role to play in our energy systems – and I speak as the climate and energy minister of one of the world’s largest fossil fuel exporters.’
As Bowen acknowledged, we are still a global top 3 exporter of coal and gas, and their scope 3 carbon emissions.
We can’t continue to approve, dig and ship coal and gas if we are to honour our climate pledges and help keep warming to the critical 1.5°C threshold, as agreed at Paris and cited again in the COP28 text endorsed overnight by Australia.
We need to deploy all of our resources to building technology, capacity and scale in zero-emissions energy solutions, not digging the hole deeper for that last extra lump of coal or joule of gas.
We need to see an end to approvals of new coal and gas. We must phase-out the tens of billions of dollars of subsidies sunk into propping up the fossil fuel industry, including, for six decades, the diesel fuel rebate.
The Safeguard Mechanism, intended to reduce emissions from Australia’s largest industrial facilities, needs more teeth, particularly in monitoring, reporting and verification (MRV) of leaks of methane from coal and gas extraction.
Together with this, we need to increase fossil fuel taxes and royalties and to direct the proceeds to investing in energy transition initiatives here, as well as financing solutions for the most vulnerable, both here and amongst our Pacific neighbours.
Something’s got to give. The irreconcilable tension at the heart of Australian climate and energy policy – progress on Australia’s reinvention as a renewable energy-powered minerals and metals export superpower, coupled with regressive continued policy support for the expansion, extraction and export of our coal and gas – cannot hold.
Minister Bowen has committed to an 82% renewables by 2030, and last month quadrupled the Capacity Investment Scheme with a target of 32GW of firmed renewables working in partnership with the states over the coming 3-5 years – a brilliant move hailed by the energy industry and investor groups.
Momentum is positive, with Australian renewables share rising from 31.4% in 2021 to 34.9% in 2022 to 38.3% to-date in 2023. We also need a national concurrent gas substitution and ‘electricity everything’ strategy, including ground heat pumps and EVs.
Investment and deployment need to accelerate even further to get to 82% within seven years.
This is what the Australian renewable energy industry and investors want to see. It will build capacity to permanently replace fossil fuel reliance.
We have some of the world’s leading supplies of the critical minerals and energy transition materials that underpin the global green revolution, and superabundant sun and wind to power processing and manufacture onshore.
This gives us a massive comparative advantage, and the once in a century opportunity to pivot from a legacy fossil fuel based economy to zero-emissions powered trade and investment leader.
This is the kind of leadership that will both ensure Australia’s economic and energy security, and, critically, demonstrate Australia’s bona fides as a climate champion ahead of our bid to host COP in partnership with our Pacific neighbours in 2026 – the world’s most climate-vulnerable nations, which have repeatedly called on Australia to end the toxic dependency on coal and gas that threatens to wipe them off the map.
Richie Merzian, international director, Smart Energy Council.
Tim Buckley, director, AM Jonson, chief of staff, Climate Energy Finance.
