COP28: World Climate Action Summit Day 2

Day 2 saw multiple announcements covering decarbonization and the acceleration of renewables deployment. COP28 has also seen a focus on the vital role of climate technology for achieving net zero—if the world can deploy it and scale innovation at unprecedented speed.

News and announcements:

The Global Decarbonization Accelerator (GDA) was launched, which contains a set of actions aimed at decarbonizing the existing energy system and building the energy system of the future. This initiative is aimed at tackling the 20–24 GtCO2e per annum greenhouse gas (GHG) emissions reduction that the Global Stocktake highlighted is needed by 2030.

  • 118 governments committed to tripling renewables and doubling the rate of energy efficiency improvements by 2030. Progress has already been made, with renewable-power capacity additions expected to show their largest absolute increase ever in 2023. However, the IEA’s Net Zero Roadmap shows pace of change needs to accelerate further: achieving net-zero emissions from the energy sector by 2050 rests on the world’s ability to triple renewable-energy capacity by 2030. Expansion at that speed would allow renewable-power generation growth to outpace total electricity demand and is vital to keep the 1.5°C goal within reach.
  • The Industrial Transition Accelerator (ITA) was launched with the aim of accelerating delivery of Paris-aligned ambitions across heavy industries (cement, steel, and aluminum), transport (shipping and aviation), and energy—industries which together represent 65 percent of global emissions. It will aim to encourage policymakers, experts, and financial institutions to collaborate to scale the implementation and delivery of decarbonization projects.
  • The O&G Decarbonization Charter was signed by 50 companies comprising more than 40 percent of global oil and gas production. The signatories committed to net-zero operations by 2050 across Scope 1 & 2 emissions (that is, focused on emissions in production, not in use), zero methane in upstream operations by 2030, zero routine flaring by 2030, and increased transparency in emissions reporting. Over 30 of these companies committed to near-zero methane for the first time. According to the IEA, O&G Scope 1 & 2 emissions comprise 15 percent of total energy-related emissions globally and 45 percent of these are methane related. Reducing methane by 2030 is critical for a 1.5° pathway, as methane is 84 times more potent as a GHG than CO2 over a 20-year window. The commitments included in the charter could represent a potential impact of ~2 GtCO2e per annum in 2030.
  • There were several other initiatives packaged within the GDA, including the UAE Hydrogen Declaration of Intent, with 27 countries endorsing a global hydrogen certification standard, and the Global Cooling Pledge, signed by 52 countries aiming to reduce emissions from cooling by 68 percent by 2050. Emissions from cooling are expected to triple as more nations adopt air-conditioning.

Other announcements today include:

  • The United States, the Czech Republic, and the Dominican Republic joined more than 50 other nations in committing to phase out unabated coal power plants. The Powering Past Coal Alliance was first launched in Glasgow at COP26.
  • 22 countries called for tripling nuclear energy capacity by 2050. A 2023 McKinsey report stated that nuclear is already a proven, 24/7 reliable, and flexible zero-carbon power source that can also meet the need for high-temperature industrial processes, data centers, and hydrogen production.
  • Kenyan president William Ruto convened African Leaders to launch the Green Industrialization Initiative, which aims to accelerate and scale green industries and businesses across Africa, promote climate mitigation and adaptation, and catalyze economic green growth on the continent.
  • More than 500 CEOs continued to gather on the second day of the flagship Business & Philanthropy Climate Forum at COP28. McKinsey provided insights and analysis to the forum and our global managing partner, Bob Sternfels, participated in a conversation on partnerships for climate resilience.

Please look for analysis on additional energy announcements on Dec. 5.

McKinsey at COP28: Insights from our events

How do we ensure an equitable, orderly, and inclusive transition—and balance sustainability, inclusion, and growth? McKinsey convened business and government leaders across three sessions on these questions:

  • McKinsey’s global managing partner, Bob Sternfels, underscored the importance of “and” thinking in a session focused on adapting to climate risks and ensuring an inclusive and orderly transition. “We need to reject the notion of ‘Do we pick one?’” he said. “Quite frankly, the hope of any one of these three rests with actually getting all three of them right.”
  • Panelist Ron O’Hanley called for “unconditional action” on climate and adaptation and urged collaboration across countries and communities. “The atmosphere knows no national borders,” he said, highlighting the need for leaders to think about policy from a global perspective that includes everyone.
  • COP28 will be the “Speed COP”—so predicted a technology executive in a discussion about building resilience in the face of climate and health risks hosted by McKinsey’s Mekala Krishnan. The executive shared how technology can play a powerful role in helping the world leapfrog climate challenges. For example, instead of building a sea wall one foot higher, leaders can use technology to completely rethink how our public spaces are designed to build resiliency. “There is no excuse for taking years to make progress.”

The climate tech opportunity is expected to roughly double every decade, reaching a potential $4 trillion in value by 2040.

  • On the COP28 Knowledge Hub main stage, McKinsey’s Bernd Heid, Mark Patel, and Martin Linder talked about the importance of scaling climate technologies—and the urgency to do so quickly. They were joined by leaders from a number of climate startups, scale-ups, and other innovators. When asked what needs to change for climate tech businesses to scale, Dr Jennifer Holmgren, CEO at LanzaTech, encouraged the ecosystems of funders, partners, and competitors around scale-ups to enable climate innovation rather than stifle it—because the risk to lives far outweighs the risk of commercial failure from trying something different.
  • Bernd also previewed the latest research from the McKinsey Platform for Climate Technologies, What would it take to scale critical climate technologies?, in a McKinsey session on accelerating net-zero climate technologies. Watch the replay here.
  • The good news? “None of this tech is new to us,” Bernd said. McKinsey analysis suggests that, collectively, 12 categories of climate technologies could potentially reduce as much as 90 percent of total man-made GHG emissions if deployed at scale.

SEMI announced the launch of the Semiconductor Climate Consortium: Energy Collaborative

  • The initiative, with McKinsey as a knowledge partner, aims to reduce the carbon emissions of the semiconductor industry.
  • The group hopes to achieve this by working to understand and clear roadblocks around the installation of low-carbon energy sources in the Asia-Pacific region.
  • More low-carbon options of power consumption are urgently needed to meet reduction targets.

Questions for leaders:

We need all climate technologies to scale rapidly. We know that 90 percent of emissions reduction can be achieved with existing technology. However, only 10 percent are already competitive (solar PV, onshore wind). Scaling is the challenge.

  1. What’s the one decision my organization can make today to accelerate the cost decline for key climate technologies?
  2. How can my organization mobilize value chains, build partnerships, reengineer financing, and overcome resource constraints to scale the entire ecosystem of technologies?
  3. How can my organization tailor support mechanisms to accelerate innovation in earlier-stage technologies while supporting industrialization of mature ones?

Chart of the day

A chart titled, "Mature climate technologies are growing at a speed that is on a track toward net zero, but not yet for newer technologies".

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