The COP28 Agenda
As COP28 gets underway in Dubai, the world is at a pivotal moment for the planet and its people. Meaningful momentum is building around net zero. But the world isn’t transitioning fast enough.
It’s time for leaders to double down on their ambition and action—to accelerate the rate of progress toward the targets set in the Paris Agreement.
To focus the efforts of the global community, COP28 has been organized around four themes: fast-tracking emissions reduction; deploying climate finance; increasing adaptation by focusing on nature, lives and livelihoods; and making the transition inclusive.
Over the next two weeks, government leaders at COP28 will be working toward a negotiated agreement—and business and civil-society leaders will also announce a series of “real economy” pacts, pledges, and pathways with the aim of materially reducing greenhouse gas emissions and ensuring an inclusive transition.
News and announcements to date
COP28 has kicked off with statements from national leaders on renewables, as well as commitments from global leaders across sectors:
- There has been an agreement on the operationalization of the Loss & Damage Fund. The fund will be hosted at the World Bank for four years and has already secured $420 million in pledges. This agreement acknowledges the cost of extreme weather events that emerging economies have faced, including drought, flooding, and rising seas. It will also potentially unblock additional funding to repair damage and improve climate resilience.
- The COP28 Presidency announced a $30 billion catalytic climate fund called ALTÉRRA, which will be focused on scaling solutions to climate change, particularly for emerging economies. The fund includes $5 billion in concessional funding and aims to support the further mobilization of up to $250 billion in investment by 2030. BlackRock, TPG, and Brookfield will be partners in the fund. This blended-finance model could provide a model for further initiatives that could potentially de-risk climate investments and channel more capital to sustainability solutions.
- The UAE Declaration on a Global Climate Finance Framework has been announced; this seeks to make climate finance available, accessible, and affordable. Backed by developed and developing countries, this framework sets out a common set of aspirations around climate finance and includes recognition of the importance of high-integrity carbon markets.
- More than 130 prime ministers and presidents have signed the Emirates Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action. For the first time, nations are committing to adapting and transforming their food systems as part of climate action, including setting targets in their nationally determined contributions (NDCs) and national adaptation plan (NAPs) by 2025. The signatories account for 70 percent of global food production. It has also been announced that more than $2.5 billion has been mobilized by the global community to support the climate-food agenda.
- Today was the first day of the inaugural COP28 Business and Philanthropy Climate Forum (BPCF), a CEO-level forum bringing together more than 500 business leaders and philanthropists to drive climate action. There were several major announcements at the forum, including the Innovate for Climate Tech platform, a coalition between Masdar City, Tencent, and Catalyst, that aims (with McKinsey as a knowledge partner) to accelerate innovation and the deployment at scale of climate technologies.
- The results from the first-ever Global Stocktake show that, despite momentum toward net zero, we are not on track to meet the Paris Agreement goal of limiting warming to 1.5C. The synthesis report indicates that even if all existing pledges were fully implemented, we are on track for warming of 2.4–2.6°C.
- The OECD reported that developed countries are “likely” to have hit their pledge to give $100 billion in climate financing, made initially in 2009. The goal will have been achieved three years later than promised.
McKinsey at COP28: Insights from our events
- Navigating and winning the net-zero transition. Watch the replay.
- In our kick-off event at COP28, McKinsey’s Daniel Pacthod and Cindy Levy highlighted the positive steps leaders can take to address the multiple imperatives facing global leaders: reducing emissions, ensuring affordability, and providing reliable and secure energy, all while strengthening competitiveness.
- On the panel, Lord John Browne, Chairman, BeyondNetZero, General Atlantic, discussed the importance of addressing the local context: “It’s about testing and trying. It's about listening to the locality and deciding how you can get the best answer. That's the rule always with these sort of disruptive activities that are involved in transitioning energy or transitioning demand for energy.”
- Tom Linebarger, former CEO and Chairman of Cummins, issued a challenge to all leaders at COP: “We need to start asking ourselves what the cost of not doing things is, because too many people are not doing things. As soon as you start to get real about what's going to happen when [climate change] doesn't get solved and what it's going to cost every nation and every city and every place—it gets real. It gets easier to get aligned on why we might want to spend money today to avoid that problem in the future.”
- Anne Finucane, Chairwoman, Rubicon Carbon, discussed how to create market structures to accelerate financing: "There's real money starting to happen: $500 billion from China, $140 billion from the US, $180 billion from the EU. These are real numbers. We know they're not enough. We know we need $4 trillion a year. Part of this is a call for voluntary carbon markets, and how to structure them in a way that they're transparent, that people feel good about them.”
- Can we achieve an affordable, reliable, and competitive net-zero transition? Read our report.
- Sven Smit and Mekala Krishnan from the McKinsey Global Institute challenged participants to rethink conventional wisdom to create the net-zero economy we need.
- For example, how can we better spur innovation, incentivize consumers, create global policy, and design energy markets?
- The discussion highlighted many practical and affordable actions that can increase the rate of progress of the transition but which are under-utilized, such as energy efficiency, reducing methane emissions, and shifting behaviors to reduce rates of consumption.
- What will make COP28 a success for emerging economies?
- McKinsey’s Tarek El Sayed convened three government officials for a discussion on how to lead a country level net-zero transition, noting: “Leaders want to drive social and economic development, but cannot follow the high-carbon path already traveled by developed economies. Instead, they seek a new path that leverages their unique set of nature, tech, and human resources.”
- Contributors to the discussion focused on how to develop diversified avenues of climate financing, effective private-public partnerships, and adaptation measures centered on lives and livelihoods.
- The CEO perspective
- At McKinsey’s annual COP leadership dinner, the firm’s Global Managing Partner, Bob Sternfels, asked more than 100 C-suite executives: Will we find a way to speed up the net-zero transition? “I’m humble enough to know I don’t have the answer. But breaking down the challenge into actionable objectives is key. Acceleration isn’t about one big move—it’s about quick, practical moves over a sustained period.”
- World Trade Organization Director-General Dr. Ngozi Okonjo-Iweala also shared five trade-related areas in which private-sector leaders can immediately work to drive climate action, economic growth, and inclusive development: carbon pricing; supply chain resilience; trade policy reform; standards; and innovation. Read more in Bob’s LinkedIn post here.
Key questions for leaders:
- What actions can your organization take tomorrow to make progress that can be measured in months not decades? Make your commitment here.
- What opportunities are created for your organization by a potential step change in capital flow to emerging economies? How will you participate—as a capital provider, off-taker, or innovator?
- Food and agriculture are rapidly becoming part of the mainstream sustainability agenda. Is your value chain affected positively or negatively? What opportunities exist?
More from McKinsey
- An affordable, reliable, competitive path to net zero
- What is the Global Stocktake?
- The agricultural transition: Building a sustainable future
Chart of the day
McKinsey at COP28: Looking ahead
Dec. 2: Scaling climate technologies to deliver net zero (register here)