COP28 Focuses on Climate Finance and Highlights China’s Role in Energy Transition

At the 28th Conference of the Parties of the United Nations Framework Convention on Climate Change (COP28), held in the United Arab Emirates from November 30 to December 12, significant discussions were held on mobilizing capital for emerging markets to support their transition to clean energy. The focus was particularly on developed countries uniting to provide this support.

One of the main objectives of COP28 was the first Global Stocktake (GST) under the Paris Agreement. This process assesses progress towards climate goals and sets forth an ambitious action plan. The COP28 Presidency emphasized delivering a robust decision on the GST, focusing on strong mitigation outcomes, comprehensive adaptation agreements, and innovative climate finance solutions that are accessible and affordable.

Key Achievements at COP28:

• Operationalization of the Loss and Damage Fund with a capitalization of US$790 million.
• Launch of a significant private-market investment climate finance vehicle with a funding of US$30 billion.
• Collaboration of 50 national and international energy companies around decarbonization targets.
• Commitment from 130 countries to a renewable energy and efficiency pledge.
• Securing a record replenishment of the Green Climate Fund, amounting to US$12.8 billion.

On December 4, commitments were made by major financial institutions and countries to incorporate climate-resilient debt clauses (CRDCs) in lending, which allow for the pausing of debt services during climate disasters. The UAE pledged US$200 million to assist low-income and vulnerable countries in this regard.

COP28 also actively encouraged parties to include language addressing all fossil fuels in the negotiated text and facilitated a significant commitment between the US and China to reduce methane and other non-CO2 gases, crucial in maintaining the global warming threshold within 1.5 degrees Celsius.

Highlighting China’s Role: China’s involvement at COP28 was notable, particularly on Hong Kong Climate Day. The event, led by the Hong Kong Ambassadors Club and curated by Wang Shi, founder of DeepRock Group, saw Chinese business leaders discussing topics like financing climate-proof technologies and the role of family offices and technology entrepreneurs in the transition.

The aim is to foster strategic alliances and partnership agreements contributing to the developed countries’ pledge of providing US$100 billion annually in climate financing for emerging markets. This initiative underlines China’s pivotal role in Asia’s response to the GST and its status as a regional green finance hub.