By: Mpho Katjiuongua

The 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC) hosted by Dubai in the United Arab Emirates (UAE) concluded earlier this month.  Top of the agenda for this round of climate negotiations was taking stock of global commitments to limit global temperature rise in line with the goals of the Paris Agreement, under the first Global Stocktake. The event began with the launch of the loss and damage fund and concluded with the first international agreement explicitly targeting a shift away from fossil fuels. Even with these two announcements, the Global Stocktake made it clear that based on current trends, the world is heading for more global warming, greater climate shocks and more biodiversity loss. Nations must be more ambitious and committed to combating climate change and will need to show this in their upcoming national climate commitments in 2025. Namibia had a strong presence at the COP28, participating both in the negotiations and in a diversity of side events and discussions. This article unpacks the outcomes of the COP28, and its significance for Namibia’s climate change goals moving forward.

UAE Consensus

At COP28, nearly 200 countries reached a groundbreaking agreement that marked the first time all nations were called upon to transition away from fossil fuels to mitigate the severe impacts of climate change. The deal, finalized after two weeks of negotiations, lacked an explicit commitment to phase out or reduce fossil fuels, despite calls from over 130 countries and various stakeholders. Instead, a compromise was reached, urging countries to contribute to a global transition “away from fossil fuels in energy systems in a just, orderly and equitable manner,” aiming for net-zero emissions by 2050. The agreement reaffirmed the goal to reduce global warming to 1.5°C above pre-industrial levels and acknowledged the need for a 43% reduction in emissions by 2030, and a 60% reduction by 2035 relative to 2019 levels. This will require enhanced ambition in national emission targets and national policies  when countries submit their updated Nationally Determined Contributions (NDCs) in 2025. Countries also supported a call to triple global renewable energy and double the rate of energy efficiency improvements by 2030. However, a statement urging global emissions to peak by 2025 was removed due to objections, particularly from China. The contentious text also included language associated with clear fossil fuel interests, such as “transitional fuels” – (interpreted as code for natural gas) and “carbon capture and utilization and storage”.

Developing countries and climate justice advocates expressed dissatisfaction with the overall COP28 agreement, citing deficiencies in emissions reductions and a lack of financial support for vulnerable nations facing worsening extreme weather and heat. The agreement also falls short in addressing key financial challenges related to renewable energy. Although renewables are cost-effective in the long run, initial investment barriers, influenced by interest rates and misaligned policies, sometimes hinder their accessibility for developing countries.

Global Stocktake

COP28 also offered a platform for the release of the latest  global stocktake (GST) which is an important five-year assessment of the world’s progress towards achieving the long-term goals of the Paris Agreement housed under Article 14. It encompasses aspects such as mitigation actions, adaptation efforts and climate finance, all of which should be guided by principles of equity and scientific findings. The process involves three phases: information collection, technical assessment and consideration of outputs, of which the latter point considers the financing necessary to drive forward climate action.

The outcomes of the GST make it clear that existing pledges would result in a temperature increase of 2.4-2.6°C, while the full implementation of long-term net-zero targets, would result in a lower, albeit still problematic global temperature increase of 1.7-2.1°C – as both scenarios pave the way for an unprecedented climate catastrophe. The GST decision, therefore, urges countries to submit new, more ambitious NDCs in 2025 that would update their 2030 targets and introduce new targets for 2035. The GST also emphasised the need to go beyond emission reductions and include plans for adaptation, just transition efforts, and addressing loss and damage. The outcome underscores the importance of driving transformative actions across various sectors such as clean energy, nature conservation, and road transport alongst others.

Loss and Damage Fund

As part of the urgent response to the current and upcoming climate crisis, the COP28 saw the operationalizing of the Loss and Damage Fund (L&D Fund) on the first day of the conference. The L&D Fund aims to assist developing countries to respond to and rebuild from economic and non-economic damages, caused by climate-induced catastrophes. The agreement was reached a year after its conception at COP27 in Sharm El Sheikh, Egypt, and follows recommendations from the transitional committee, including providing essential grant-based support to countries severely affected by climate-related losses. Loss and damage remain crucial even if climate mitigation goals are met, as vulnerable communities are already impacted by extreme weather events, reduced agricultural productivity, and rising sea levels.

The L&D fund will assist vulnerable nations through the formulation of national response plans, addressing inadequate climate information and data, and fostering fair, secure, and dignified human mobility, covering scenarios of displacement, relocation, and migration due to temporary and permanent loss and damage. The initial management of the fund has been entrusted to the World Bank, a compromise decision that many vulnerable countries accepted with discomfort and a set of conditions. Initial commitments to the fund have surpassed USD700 million; a good start but far below the estimated needs.

Adaptation at COP28

COP28 also celebrated the adoption of the Global Goal on Adaptation (GGA) framework, which aims to enhance adaptive capacity, strengthen resilience, and reduce vulnerability to climate change. It emphasizes the transboundary nature of adaptation, calls for transformational actions, and recognizes ongoing efforts by developing countries. The framework replaces the Glasgow–Sharm el-Sheikh work program and outlines both thematic and dimensional targets within the adaptation policy cycle. A new two-year work program is established to develop indicators for measuring progress. Notably, the GGA urges developed countries to provide financial support for implementing adaptation actions and meeting targets. Unfortunately, the targets in the GGA were not quantified and lacked financial and other operational support for developing countries. The debate during negotiations focused on incorporating means of implementation, including quantifiable targets and integrating Common But Differentiated Responsibilities (CBDR).

That said, there is a strong sentiment that the urgency to address limited technical capacity support and financing for adaptation was overshadowed by other more ‘glamorous’ announcements such as the L&D fund which leaves several nations limited in their ability to build resilience. The Adaptation Fund received only 56% of its 2023 goal of USD300m from pledges, while GST points out that adaptation financing is likely to range from USD215–USD387 billion annually up until 2030. These concerns were further aggravated by concerns that developed nations have reallocated funds from adaptation to the L&D Fund as opposed to providing additional finance. While not undermining the importance of allocating finance to respond to climate shocks, this should not come at the cost of investing in adaptation, since focusing on adaptation offers a unique and often better value for money proposition by building long-term resilience and lowering future loss and damage costs.

The state of Climate Finance

Finance was a prominent theme during discussions at COP28, both within and outside of the negotiations, although there were few major decisions on finance coming out of the negotiations. The call for reform of the international financial system to address inequalities that disproportionately impact developing countries was a recurrent theme. Responding to these concerns gained some momentum with the COP28 UAE Declaration of Leaders on a Global Climate Finance Framework, which set out 10 principles for a new financial architecture that would make climate finance more available, accessible, and affordable for developing countries. One of the three main goals of the Paris Agreement, Article 2.1c, calls on parties to “make financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”. Discussions around this goal would have offered a platform for bringing the momentum around financial system reform into the negotiations, but unfortunately, deliberations remained largely procedural with a decision to move forward through a series of dialogues, leading to an outcome at COP30 in 2025. The GST reiterated the necessity of directing public and private finance towards positive climate action and avoiding harmful funding like fossil fuel subsidies. It emphasized the importance of reforming the multilateral financial architecture and exploring innovative solutions, encompassing institutions like multilateral development banks and institutional investors. There was an emphasis on scaling up grant-based funding and concessional loans, as well as balancing debt sustainability with sovereign debt levels and using taxation to access greater financial resources.

Developing countries were united in emphasizing that the Paris Agreement goals will not be met without scaled-up provision of climate finance, calling for a shift from billions to trillions of US dollars per year to enable developing countries to realize their ambitious climate mitigation and adaptation goal. The GST also acknowledged the failure of developed nations to meet the annual USD100 billion finance goal in 2020 and 2021,  but specific measures to address the shortfall were not outlined. This offers significant challenges given that developing countries’ needs and priorities are estimated to range from USD5.8 trillion to USD5.9 trillion by 2030. The New Collective Qualitative Goal (NCQG) – which is expected to set a new target for the provision of climate finance to developing countries, scaling up from the USD100 billion annual target set at COP15 – progressed in terms of procedural matters and is expected to be adopted at COP29 in Baku, Azerbaijan next year.

COP28 also saw USD3.5 billion in new pledges to the second replenishment of the Green Climate Fund (GCF), increasing the total to $12.8 billion, a 28% rise from the first replenishment. The challenge ahead is to ensure these pledges translate into actual financial disbursements to developing countries, supporting high-quality investments that meet their needs and leverage private finance.

What does COP28 mean for Namibia?

Namibia finds itself in a unique position with regards to the outcomes of COP28 given its vulnerability to climate shocks, its public policy approach and ongoing exploration of both fossil fuel and clean energy sources. Namibia is considered a carbon sink and contributes minimally to global GHG emissions (0.003%). That said, the country remains highly vulnerable to climate change due to its arid climate, with challenges like water scarcity, agricultural disruptions, and increased risks of extreme weather events such as floods and heatwaves. These climate-related vulnerabilities compound existing economic challenges such as high levels of poverty (43.3%), inequality and youth unemployment (42.8%).

Namibia’s latest NDC includes a range of mitigation actions with attractive opportunities for investment in renewable energy such as solar, wind, hydroelectric and recently green hydrogen projects, however given the country’s high climate vulnerability and low emissions, adaptation remains Namibia’s key priority. The estimated cost needed to realise Namibia’s mitigation and adaptation goals comes to over USD 15 billion, of which USD 13.5 billion is conditional on receiving financial support from the international community. Namibia should therefore be actively engaging in the ongoing discussions around climate finance, including the negotiations around setting a NCQG that reflects the financing needs of developing countries, and the critically important but often overlooked negotiations around article 2.1(c) on aligning financial flows with the Paris Agreement. Namibia should complement such efforts by building on its existing success with development financing institutions such as the GCF, while more deliberately pursuing private sector investment in both mitigation and adaptation projects that support the nations NDCs. Such initiatives should include multi-stakeholder engagement to develop industry specific policy incentives, while exploring different financial tools that can lower the risk of investing in Namibia and provide competitive returns.

The new commitments to the GCF were a positive signal for Namibia, which has already tapped into nearly USD40 million from the GCF through the Environmental Investment Fund (EIF) and is seeking to accredit four additional national institutions across the public, private and non-profit sectors. At the same time, an announcement by the World Bank for a 9 billion increase in financing for climate-related projects in 2024 and 2025 is also welcome news that Namibia should look to capitalise on. However, the significant failure of pledges to the Adaptation Fund is cause for concern for vulnerable countries like Namibia, given that the Fund offers specialised funding and expertise to address local adaptation challenges. With such a significant shortfall, Namibia should look to develop a National Adaptation Plan (NAP) that expands its adaptation financing options by looking at initiatives such as the Climate Action Window of Africa Adaptation Acceleration Program (AAAP) announced at COP28. Such programmes can provide technical expertise to access both public and private sector finance, as well as support the design of financial instruments to support investment. The country should also empower and engage with the country’s youth representatives who have recently launched their first national conference on climate and youth. Integrating the youth into decision making, at a time when youth representation at COP is growing, will be key to developing NDC’s, NAPs and other national strategies that offer just and informed solutions.

In terms of the growing momentum around Namibia’s fossil fuel industry – including potentially commercially viable offshore reserves – the less than ideal outcomes of the UAE Declaration point out that the world is slowly moving away from fossil fuels and although exploration efforts by multinationals in Namibia will continue, the country must develop a strategic approach for the long term evolution of such high emitting markets as compared to clean energy alternatives. To its credit, the country has already taken some positive first steps by announcing at COP28 that it will host the first Global African Hydrogen Summit in September 2024. Hydrogen is expected to play a key role in driving the global energy mix towards cleaner products and Namibia is looking to position itself as a leader of green hydrogen development on the continent.

Given Namibia’s development challenges and the vulnerability of its ecosystems, the emphasis at COP28 about developing a more climate aligned financial system should resonate with the country’s approach to accessing and deploying climate finance. The country should engage in climate negotiations and pursue public policy strategies that balance greater liquidity from developed nations with increased investment in critical infrastructure that is protected by macroeconomic risks such as currency fluctuations, as well as greater private investment that is complimented by guarantees to improve competitiveness. Namibia can also continue to raise its voice on the archaic eligibility criteria facing middle-income nations, while playing its part to reform a financial system that considers the transboundary nature of developing climate resilience. Finally, Namibia should prioritise greater volumes of finance that acknowledges the increased risk of adaptation projects, and that a holistic financial system is key to effectively addressing present day and future socioeconomic and environmental challenges – both domestically and globally.