COP28, the United Nations climate summit, is currently underway, addressing crucial climate change issues. In this article, we will highlight four key updates that have significant implications for the future of climate finance.
The first highlight is the Oil and Gas Decarbonization Charter, which aims to achieve zero methane emissions by 2050. Saudi Arabia’s Aramco, the UAE’s ADNOC, and 29 other national oil companies have signed a non-binding agreement to end routine flaring by 2030. This initiative has garnered commitments from 50 oil and gas companies, representing 40% of global production. However, it’s important to note that these targets do not include emissions from customer fuel use. While these voluntary commitments are a step in the right direction, it is crucial to have government policies in place to drive a swift and equitable transition away from fossil fuels.
Canada has also made a significant announcement at COP28, pledging to slash methane emissions from its oil and gas industry by at least 75%. Methane emissions accounted for 13% of Canada’s total emissions in 2021. The new plan involves stricter rules for the oil and gas sector, including the elimination of routine venting and flaring. The federal government estimates that these regulations will reduce emissions by 217 million metric tonnes of CO2e from 2027 to 2040. However, the plan has faced criticism from oil-rich provinces Alberta and Saskatchewan, who argue that it is too costly and infringes on provincial control.
Bhutan, known for its vast forests and commitment to carbon neutrality, has become the first country to achieve full integration with the Climate Action Data Trust (CAD Trust) Metadata Layer. CAD Trust, a decentralized blockchain-based platform, aims to promote transparent carbon market accounting in line with the Paris Agreement. Bhutan’s integration into CAD Trust highlights its dedication to climate mitigation and adherence to Article 6 guidelines. This milestone marks the beginning of an expanding network for CAD Trust, connecting with other national and independent carbon market standards in the future.
Tanzania has signed a significant carbon credit deal at COP28, covering six national parks spanning 1.8 million hectares. The agreement, involving Tanzania’s national park agency (Tanapa) and local company Carbon Tanzania, aims to trade carbon credits while preserving and managing the national parks’ ecosystems. This move positions Tanzania as a key player in Africa’s carbon credit market. The funding for this project will be provided by Mohammed Enterprises Tanzania Limited, led by businessman Mohammed Dewji. However, these deals have faced criticism for their potential impact on local lands and communities, raising concerns about neocolonialism.
As COP28 progresses, these developments in the oil and gas industry, national initiatives, and global registry integration highlight the crucial role of collaborative efforts and policy implementations in addressing climate change.