Takeaways from the COP28 Climate Conference

Scholars at Resources for the Future who attended the COP28 climate conference in Dubai this month share insights from the conference and its negotiations. Some highlights: international trade, the energy transition, the global stocktake, and more.

Kristin Hayes: A question for new RFF Fellow Milan Elkerbout. This was the first COP you’ve attended while working for a US-based organization, but you still have a foothold in European policy discussions. How has the relationship between the United States and European Union been evolving regarding discussions of climate policy, since the Inflation Reduction Act (IRA) passed in 2022?

Milan Elkerbout: Both the United States and the European Union have developed momentous policies over the past two years—the IRA and EU Carbon Border Adjustment Mechanism—that initially caused some friction: the IRA for subsidizing domestic producers to an extent that very few countries (including EU member states) can compete with, and the EU Carbon Border Adjustment Mechanism for attempting to force carbon pricing onto other nations.

But an increasing understanding has developed that both parties passed these policies because each policy fits the respective policymaking contexts in the United States and the European Union, and because the policies offer benefits in terms of climate action and beyond. European producers might benefit from certain subsidies in the IRA, and the domestic debate on green industrial policy in the European Union has been wholly transformed by the IRA. Meanwhile, EU policy experts will watch (bipartisan!) US efforts to develop border adjustment measures with some satisfaction, given that the “Brussels Effect” seems to be leading global policy for climate and trade.

Yet the policy designs and secondary objectives of US and EU climate policies continue to differ quite substantially. As climate policies continue to have a growing impact well beyond national borders, the interoperability of regulations and standards across nations will become much more important.

The risk also exists that the United States and European Union focus too much on their own transatlantic relationship at the expense of other countries. In particular, ongoing talks between the United States and the European Union about the global arrangement for steel and aluminum might be perceived as exclusionary.

RFF decided fairly early on that climate and trade was going to be an institutional thematic focus at COP28, given RFF research interests and ongoing work. How did the discussions of climate and trade at COP28 meet or differ from your expectations going in? What are the next likely developments in this area?

Milan Elkerbout: The discussions on climate and trade were rich and perhaps more conciliatory than I anticipated. The rationale for border adjustment mechanisms is readily understood by most stakeholders. Several countries also acknowledge the benefits of using the “stick” of border adjustment mechanisms as pressure to develop better measurements of carbon dioxide emissions and data collection—or even carbon pricing policy.

Nevertheless, given the foundational principle of the UN Framework Convention on Climate Change of “common but differentiated responsibilities,” some countries continue to object on principle to costs that are imposed through policies, such as the EU Carbon Border Adjustment Mechanism, that other countries unilaterally enact.

Much work remains to be done at the technical level to better understand how the amount of carbon dioxide emitted during the production of a given commodity should be measured in different types of traded goods; how benchmarks and average values could be developed; and, above all, how policies that affect traded goods can work together smoothly, even if policy designs differ. The mutual recognition of domestic policies, the interoperability of differing policy designs, and carbon accounting standards undoubtedly will be important concepts in both RFF’s work and climate-and-trade policymaking.

Finally, the scope of policies that are considered relevant under the climate-and-trade umbrella may continue to grow, since subsidies and industrial policy face similar issues of policy interactions and comparability.

A question for Billy Pizer, RFF’s Vice President for Research and Policy Engagement. You’ve been in the world of international climate negotiations for many years. In your view, why does the COP process matter?

Billy Pizer: At COP15 in Copenhagen in 2009, UN negotiations began to move away from the idea of a negotiated cap on emissions, like the cap enshrined in the Kyoto Protocol that was established at COP3. Instead, we now have an operating model through which countries—and, increasingly, many other actors—pledge to achieve climate-related goals that later are scrutinized in various ways. Every year, COP is a key moment when a bright light gets shined on both the ambition of new pledges and the achievement (or lack of achievement) of past pledges.

Exactly how much pressure is on countries and other actors to make and ultimately achieve these pledges? How much do one country’s pledges leverage the pledges of another country—or one company’s pledges drive another company’s pledges? Most countries do not want to be targeted as the reason for a major failure of the COP, and, more generally, actors typically dislike being called out as laggards compared to their peers. But nations and companies do like being celebrated.

So, my view is that each COP does present a bit of leverage to drive progress and motivate action. A whole literature in political science actually has grown on this subject and is referred to as “naming and shaming.”

Put COP28 in context for us—what were the strengths and weaknesses of this year’s conference? How high were the expectations for COP28 going in, compared to some others you’ve attended?

Billy Pizer: I would describe this year’s conference as a medium COP. COP28 was not as high stakes as the conferences in Kyoto (in 1997); Copenhagen (in 2009); or Paris (in 2015), at which a new architecture for achieving global climate goals was on the table. The stakes at COP28 also were not as high as the stakes at COP30 will be, when new national pledges to reduce emissions, which are called “Nationally Determined Contributions,” are on the table. However, this year’s conference was an important marker on the way to COP30: the global stocktake at COP28 was the opportunity to set parameters and expectations for the process that will lead up to COP30.

A question for Richard G. Newell, RFF’s president and CEO. A number of senators and members of the US House of Representatives traveled to COP28, and you had the chance to interact with quite a few of them. Did any common themes emerge from those discussions with US policymakers, as they consider US decisions in the context of global climate policy?

Richard G. Newell: One thing that struck me was how perspectives across the United States are a microcosm of the conversation that is happening at a global level. The United States has a strong commitment to reducing its greenhouse gas emissions on a path to net-zero emissions and has passed laws related to clean energy and climate change that accelerate the move in that direction.

At the same time, the United States is the world’s largest producer of oil and gas, and this reality understandably influences how elected officials see the interests of their constituents. Officials want to find ways that their regions—including those that currently produce oil and gas—can succeed during the energy transition and deal with the impacts of climate change.

Another area of common interest among officials in the United States and in many other jurisdictions is siting and permitting reform, which can help enable the rapid build-out of clean energy infrastructure, including the power grid.

Finally, recognition is growing that we need an international approach for measuring the greenhouse gases emitted during the production of internationally traded goods, along with a method to establish the pricing of these emissions. As the United States, European Union, and other jurisdictions increasingly navigate policies that blend climate and trade goals, common or harmonized approaches can reduce administrative burdens and potential conflicts.

The US delegations were politically diverse, yet all who I interacted with had a positive and respectful orientation on climate solutions.

After weeks of contentious debate, we finally did end COP28 with a negotiated statement that calls for “transitioning away” from fossil fuels. How much does that language—as vague as it might be—ultimately matter?

Richard G. Newell: On the one hand, I find it hard to comprehend why language around phasing down, phasing out, or, ultimately, “transitioning away” from fossil fuels was so controversial, given that fossil fuel emissions are the leading cause of climate change, and the world’s nations agreed long ago—30 years ago—to stabilize the climate.

On the other hand, to finally name the elephant in the room—fossil fuel emissions—and to name it in the context of “accelerating action in this critical decade, so as to achieve net zero by 2050” is tremendous movement forward. The term “net zero” did not even appear in the Paris Agreement, but “net zero” is mentioned six times in the COP28 agreement, including in that particular sentence about transitioning away from fossil fuels.

Of course, the inclusion of language around fossil fuels and net zero mainly serves as a signal and benchmark for real action. The practical impact will depend on the new national commitments that countries put forward in 2025 in response to the global stocktake process, along with the specific policies that nations implement to deliver on those commitments.

What important decisions may have been missed in the flurry of announcements at COP28?

Richard G. Newell: When the United States announced on December 2 the finalization of a regulation to reduce methane emissions, the US Environmental Protection Agency also finalized the process to update the social cost of carbon that the agency will use in regulatory decisions. The agency’s estimate for the social cost of carbon now stands at $190 per ton of carbon dioxide—an almost fourfold increase from what the figure used to be. RFF played a leading role in ensuring that this update used the best science and economics available, so that the benefits of reducing greenhouse gas emissions can be reflected transparently in US government decisions in clear economic terms.

Milan Elkerbout: The same section in the final COP28 agreement that contains the language on “transitioning away from fossil fuels” also mentions other technologies that can help reduce emissions from fossil fuel use. Hydrogen is mentioned, as are “removal technologies, such as carbon capture and utilization and storage.” The agreement unhelpfully mixes up the concepts of carbon dioxide removal and carbon capture, utilization, and storage, the latter of which can be seen as a conventional emissions-reductions technology. Moreover, while some specific technologies get a shout-out in the agreement, others (electrification and heat pumps come to mind) are not mentioned at all.

Mark Field's photo is available through a creative commons license.