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Article by Janav Singh
In 2023, climate defiance movements worldwide aimed to spread awareness of the detrimental impacts carbon emissions have on the world. Global activist group, ‘Just Stop Oil’, resorted to campaigning on vital transportation pathways to Wimbledon matches in a desperate attempt to draw much-needed attention to today’s climate crisis. In the wake of such movements, the urgency to meet environmental concerns reached a pivotal turning point on the 13th of December, 2023.
The United Nations Climate Change Conference, commonly known as COP, serves as an annual global multilateral forum on climate change, bringing together representatives from almost all countries to address issues concerning climate action. The 28th Conference (‘COP 28’) played a pivotal role in addressing the gaps in upholding the Paris Agreement and the continual action towards climate change. The Conference housed over 85,000 participants, including delegates, indigenous groups, young people, journalists and other experts and stakeholders. It emphasised the UN’s Intergovernmental Panel on Climate Change (IPCC) report, which highlighted the need for global emissions to be reduced by 43% by 2030 to limit global warming to the agreed 1.5 degrees as per the Paris Agreement. The key decisions in COP28 include the introduction of a global stocktake, an increase in climate finance, and, crucially, the transition away from fossil fuels.
COP28 focused on establishing accountability mechanisms to track progress across various workstreams. The Conference conducted the first-of-its-kind global stocktake, akin to an inventory, which assessed the collective efforts towards meeting the 1.5-degree Celsius goal of the Paris Agreement. It highlighted the world’s inability to meet the goal with such limited progress made and underscored the necessity for enhanced climate action. Despite its findings, it informed the climate action plans to help policymakers and stakeholders strengthen climate policies and pave the way towards higher acceleration and ambition to combat climate change. Additionally, it is expected to be leveraged to accelerate ambition in coming COP conferences in addition to the transparency reporting and review tools to be used by parties, with the final version being available in early 2024.
The Conference focused on climate finance, which would theoretically aid developing countries in addressing climate change, as it was regarded as an “enabler of climate action”. In this light, a staggering pledge of USD 12.8 billion was made towards the Green Climate Fund (GCF) to aid developing countries in transitioning to greener economies. Despite such efforts, the global stocktake acknowledged that this pledge falls short of the trillions needed to support developing countries’ transition towards clean energy and accelerate their adaptation efforts. However, this pledge can be more optimistically viewed as a step in the right direction as growth in climate finance funding is expected.
Transition Away from Fossil Fuels
Arguably, the most important implication of the Conference was the long-awaited signal towards the “beginning of the end” of the fossil fuel era. This decision differs from previous conferences, which were wary of singling out fossil fuels as a leading cause of climate change. Instead, COP28 addressed it head-on and called for a “tripling of renewable energy capacity and the doubling of energy efficiency by the end of 2030”. Its phase-down plans included addressing the persistent use of coal, eliminating insufficient fossil fuel subsidies, and facilitating the just and equitable transition away from fossil fuels. In addition, the Conference demands governments and businesses alike turn their pledges into tangible and material outcomes.
Implications for Law Firms
As businesses and governments make decisions to align themselves with the outcomes of COP28, the legal industry should anticipate engagement on matters spanning from corporate governance to finance.
In line with what was agreed at COP28, legal compliance and risk management will see an increase in demand as the world embarks on its transition away from fossil fuels. COP28 and other environmental legislations will create opportunities for law firms to advise clients on legal compliance and help them devise and implement strategies such as divestments and restructuring to move away from fossil fuels. In addition, as the Conference emphasised the need for tangible outcomes, it is inevitable for law firms to advise on corporate governance matters. It may also require navigating the development of the new transparency reporting mechanisms and compliance with the same.
With an expected increase in pledges towards climate finance, firms specialising in the sector may experience a higher demand for their services. Therefore, firms may play a crucial role in structuring and facilitating sustainable transactions that will mobilise developing country’s transition to a greener future. Furthermore, law firms with experience in energy law are likely to witness an influx of renewable energy transactions; the Conference implies the need for an increase in renewable energy projects, providing opportunities for law firms to engage in contract negotiations, project financing, and gaining regulatory approvals.