Key Takeaways from COP28

By Catrina Rorke
December 19, 2023

The 2023 United Nations Climate Change Conference, known as COP28, concluded last week in Dubai. Over the course of 13 days, the conference brought together a record-breaking 97,000+ participants in the official Blue Zone alone, including government officials, business leaders, scientists, journalists, and various other experts and stakeholders. Not only was this COP the largest to date, but it also featured a historic final deal and marked a sea change in how the international community will treat trade as a tool in the fight against climate change.

A Historic COP

This year’s conference was a pivotal one. On the first day, the parties officially launched the “loss and damage” fund at the World Bank, following a three-decade-long push. The fund will support developing economies as they grapple with the present impacts of climate change. The initial commitments to the fund have reached $700 million, but the question of future financing remains uncertain.

The summit also marked the signing of several deals intended to secure access to critical minerals vital for electric vehicles, renewables, and other clean energy technologies. Given the surging demand for these materials and the geopolitical uncertainties affecting their supply, all five United Nations Regional Commissions emphasized the need for international coordination on the expansion of critical minerals during COP28.

Finally, the summit ended with a landmark deal as the parties conducted their first Global Stocktake, an assessment called for in the 2015 Paris Agreement to outline progress made in the years since and goals going forward. Perhaps unsurprisingly, countries’ existing commitments are insufficient to limit warming to 1.5 degrees Celsius—the target established under the Paris agreement—and countries disagreed vociferously about how to establish goals for increased ambition. Critics warn that the text lacks appropriate urgency and is too reliant on voluntary action.

The final deal, reached after negotiations went into overtime, includes a pact to triple global renewable energy capacity by 2030, a benchmark for reducing emissions during this decade, unprecedented language encouraging countries to begin “transitioning away from fossil fuels,” and an acknowledgement that some fossil fuels would still be needed as the world moved to cleaner energy sources, especially among emerging economies.

Trade on the Official Agenda

Another first at COP28: the inclusion of trade on the official agenda. The Council sent our largest delegation yet to absorb the lessons from the COP’s first-ever ‘Trade Day’ and how different constituencies around the globe are talking about the link between trade and climate. The spotlight on climate and trade policies has been intensifying, in part driven by a growing recognition of the “carbon loophole” and the rapidly proliferating global conversation about climate-informed trade measures. WTO Director-General Ngozi Okonjo-Iweala underscored this significance at Trade Day’s opening event, emphasizing that “the fact is: we cannot get to net-zero without trade.”

To that end, Trade Day explored a wide spectrum of policies and ideas, including carbon import fees, carbon clubs, green tech transfers, environmental standards, and more. Engaging discussions unfolded throughout COP28 among governments, businesses, and international organizations, centering on the utilization of trade policy to decarbonize global supply chains, incentivize investments in a net-zero future, secure critical value chains associated with the energy transition, and integrate environmentally responsible practices into trade finance.

Some parties also expressed concern about bringing the trade conversation to COP28. For example, Brazil requested changes to the conference agenda to address concerns about “unilateral trade measures related to climate change.” Ministers from other developing countries echoed these concerns, criticizing measures that could lead to “bilateral protectionism” and violate the WTO’s provisions on special and differential treatment.

Despite these tensions, Trade Day saw the launch of various initiatives and resources intended to advance climate and trade policy. Chief among them was a WTO-led menu of trade policy options designed to aid the trade community in advancing ambitious and credible climate efforts, International Chamber of Commerce (ICC)’s Wave 2 Principles for Sustainable Trade, and an international effort with more than 40 signatories establishing principles for standardizing steel industry emissions intensity measurements. COP28 also featured a Trade House Pavilion, co-hosted by the WTO, ICC, and partner organizations. This dedicated space served as a hub for climate and trade discussions, aiming to “demonstrate that trade is part of the solution to the climate crisis.”

The Council at COP

Council CEO Greg Bertelsen, Executive Vice President Tiffany Adams, and I were in Dubai from December 3-10. For those of you who also attended, thank you for reflecting with us about how trade issues can and should influence the international climate dialogue.

Highlights from our time at COP28 included Greg Bertelsen moderating a discussion with Senators Chris Coons (D-DE) and Lisa Murkowski (R-AK) and Representatives John Curtis (R-UT-3), Scott Peters (D-CA-50), and Kathy Castor (D-FL-14) about rewarding environmental performance in trade. The members discussed the evolving landscape of climate and trade policies and the need for transparent, verifiable emissions data (as would be established by the PROVE IT Act).

Another high point came at an event organized by Cambridge University and Climate Strategies which focused on climate clubs and border carbon adjustments. In conversation with WTO legal counsel Daniel Ramos and Jaque Delors DG Genvieve Pons, I offered reflections on the vital role that trade cooperation will play in achieving a net zero future and gave comments on two papers evaluating international efforts on climate and trade cooperation. Both papers were co-authored by Center Policy Advisor Michael Mehling.

COP28 marked a significant moment for the international discourse on climate and trade. The inclusion of trade on the official agenda underscored the growing interest in using trade policies as a tool for reducing global emissions. The discussions, agreements, and initiatives unveiled during the conference are poised to chart the course for future global action on climate. There’s plenty of work ahead, and COP 28 provided an excellent platform for the Center to expand our audience and deepen engagement with vital international partners.

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