COP28 has brought new commitments – now the real work starts
The negotiations at COP28 are now complete, delivering a suite of new climate commitments and plenty of headlines. But, as ANGEA Senior Advisor Neil Theobald writes in the December edition of The Energy Diary, that was the easy part.
COP28 has concluded with new commitments and undertakings. These include tripling renewable energy, doubling energy efficiency and substantially reducing methane emissions by 2030, transitioning away from fossil fuels and calling for extensive reform of the way financing is undertaken, given the current framework does not support the enormous level of investment that will be required to achieve net zero.
There was an acknowledgement that transitional fuels can play a role in facilitating the energy transition while also ensuring energy security.
Hard to abate sectors such as steel and cement were also a focus, highlighting the need for innovative technology to support decarbonisation.
The other clear message to emerge is that there needs to be an increase in global effort and that the pace of change to date is not sufficient to deliver on existing climate pledges, let alone anything more ambitious.
Over the next two years, governments must prepare new, economy-wide national climate action plans.
While the agreements to come from COP28 are positive, they are in many ways the easy part. Delivery of and accountability for commitments remains more important and much more challenging than making announcements.
The nations that the Asia Natural Gas & Energy Association (ANGEA) is currently focused on in Southeast Asia have challenges around their energy systems that are very different to Europe and the US, where much of the climate debate takes place. These countries are earlier in their economic development journey, with populations that expect living standards, economic development and access to affordable and reliable energy to improve over time.
While the energy transition is understood and supported in Southeast Asia, governments are acutely aware of its cost and the potential political, social and economic impacts.
The COP28 final text does acknowledge that pathways and targets will differ for countries at different levels of development. Unfortunately, we are seeing an enormous amount of government time and effort being taken up in the region with the development of unrealistic plans that theoretically reach climate goals but actually slow down more pragmatic measures that could significantly improve outcomes.
One of the most effective emissions reduction measures is to replace coal with natural gas wherever possible. The accuracy of this statement is not in dispute and experience in the US, where affordable gas is available, shows that it can be done.
There is no technology challenge.
But reserves of gas in Southeast Asia are depleting, so pursuing this strategy needs the support of gas exporting countries.
The US, with its abundance of reasonably priced natural gas, could be one of the primary sources of energy for the region, but there is growing opposition to further US gas exports.
In Australia, also a key supplier of liquefied natural gas (LNG) to Asia, government support for new gas export projects is lukewarm at best, to the dismay of many stakeholders and customers in Asia.
The contradictions of this approach, from countries that have the luxury of abundant indigenous energy supplies and high standards of living, does not go unnoticed by policymakers in Asia. Wealthy countries lecturing less fortunate ones that they need to remain less wealthy and with a lower standard of living is unlikely to be a successful strategy.
Opposition to further gas exports is often based on concerns that it will extend the production of fossil fuels and therefore slow the overall energy transition.
This is a good example of the pursuit of the perfect being the enemy of the good.
In Southeast Asia, the lack of available, affordable natural gas will just drive countries to either stay with coal-fired electricity generation or in some cases revert back to it.
The result will be higher emissions than if gas imports were available and the loss of an opportunity to make a significant difference in the medium term.
The energy transition is enormously complex. Multiple options for emissions reduction must be pursued in parallel. Putting too much emphasis on technologies that require significant advancement before becoming feasible and effective risks a worse outcome than if a more pragmatic approach was taken.
COP28 agreements have once again raised expectations of global action on climate.
We now need to deliver outcomes.
Neil Theobald has more than 40 years’ experience in the oil and gas industry, including 17 years at Chevron, where he was Vice President, Global LNG, Gas Supply & Trading. He has been a Senior Advisor to ANGEA since 2021.
ANGEA is an industry association representing LNG and natural gas producers, energy buyers, suppliers and companies in APAC. Based in Singapore, it works in partnership with governments and societies across the region to deliver reliable and secure energy solutions that achieve national economic, energy security, social and environmental objectives and meet global climate goals.