The verdict on the COP 28 climate summit in Dubai, United Arab Emirates varies, with opinions ranging from success to failure. Despite this, most would acknowledge the mixed progress with numerous unresolved issues.

In a historic move, all nations formally recognised that fossil fuels are the root causes of climate change and pledged to transition away from it. It is perplexing that it took 28 years for the term ‘fossil fuel’ to be expressly stated in the outcome text of the agreement. The bright side is that we have finally acknowledged the most pressing issue. Future COP meetings will further restrict polluting energy, and the genie will never be put back in the bottle. But this outcome still falls short in several areas.

Firstly, it doesn’t reflect the urgency highlighted by the latest IPCC science in terms of stopping fossil fuels with explicit obligation and timelines. Presently, it’s akin to a patient diagnosed with lung cancer expressing intent to transition away from smoking. Few other contentious points include usage of potential greenwashing loopholes such as carbon capture and utilisation and storage as well as no clear methane targets.

Secondly, the call for a just, orderly, and equitable transition away from fossil fuel systems necessitates rapid and sustained funding from developed nations to developing nations under the principle of common but differentiated responsibilities. The absence of this commitment perpetuates an unjust transition. Ironically, some developed countries, while advocating for a “fossil fuel phase-out,” pursue their own expansion plans without corresponding science-based emission reduction targets in line with historical emissions.

Thirdly, it fails to take into account national circumstances for decarbonisation pathways in reaching net zero. For example, mega-biodiverse nations such as Malaysia and Indonesia in the Southeast Asia have forests and natural ecosystems that function as huge carbon sinks and contribute to global climate mitigation. In comparison, Malaysian forests sequestered more than 60% of their GHG emissions, while EU forests sequestered only 8%. This demonstrates that developed and developing countries have different mitigation pathways, yet these circumstances is not explicitly included as part of the transition.

Nonetheless, the transition is a beacon of hope for ASEAN countries, situated in one of the most climate-vulnerable regions. The global recognition of the issue and the commitment to phase out fossil fuels, along with the call to triple global renewable energy capacity, offer promise. However, 80% of the regional energy mix of ASEAN is currently derived from fossil fuels, and only 20% from renewable sources and the transition to clean energy is needed to continue received investment and participate in the economic value chain of clean energy.

Here, Malaysian and ASEAN leaders must be attentive and steadfast in insisting that the Global North pay the burden of climate debt. A rapid and easy global transition away from dirty energy necessitates funding—and not financing, particularly that puts developing nations further in debt in which may require innovative financial solutions and reforming the global financial garniture. While countries in the Global South, including ASEAN Member States (AMS), are ready to make the transition, equitable and impactful financial assistance is required to make this happen.

In addition to mitigation, a greater emphasis must be placed on funding adaptation to assist people in adjusting to a changing climate. For decades, adaptation as the twin of mitigation has received insufficient attention, and as a result, adaptation spending is significantly lower than it should be. Despite the call to double adaptation financing by 2025, the 2023 Adaptation Gap report by the UNDP found that the flow of international public finance going to developing countries to fund climate adaptation is 10-18 times smaller than required.

This will be key agenda at COP29 in Baku, Azerbaijan, slated for next year, which will centre on featuring a new collective quantified goal on climate finance. Over the next year, ASEAN leaders can strategies, pool resources, and plan for an ambitious conclusion that addresses the needs of their communities. This collective pursuit should extend to other developing nations, fostering enhanced diplomacy and coalition-building.

While Malaysia has made strides in signalling its intent to attract investments for energy transition through its pavilion and statements at COP, its climate priorities should go beyond green branding to attract capital for energy transition; but securing financing, technology, and knowledge-sharing for adaptation to protect people and vulnerable groups who continue to bear the brunt of climate disasters and their effects. This requires Malaysia to change its lens – shifting from viewing climate policy as a means to boost GDP and wealth to a more rooted focus on sustainable development.

The establishment of the loss and damage fund was another key outcome for Southeast Asia. This fund intends to compensate communities in nations that have lost their livelihoods and homes due to severe floods, droughts and rising sea levels that are beyond their capacity in adaptation and mitigation. Despite being introduced to climate negotiations as early as 1991, finally an agreement was struck last year, and the fund operationalisation was agreed on the first day of COP28.

Although the host country’s early emphasis on operationalising a loss and damage fund is strategic; the total pledges by countries still fall short, covering only 2% of the needs of developing countries. While Malaysia has expressed interest in accessing these funds, eligibility remains uncertain due to undetermined governance and means of implementation. The World Bank is set to serve as the interim trustee and host of the fund for the next four years, with more clarities to be provided in the near future.

A significant agenda affecting Malaysia and AMS, notably excluded in COP28, relates to unilateral trade policies on climate change. This encompasses carbon border-adjustment mechanisms, involving a carbon levy on imported goods set to be implemented by the EU in 2026 and the UK in 2027. Despite missing in COP, the decision has been criticised as a form of protectionism and climate injustice, sentiments shared by Minister of Natural Resources and Environmental Sustainability YB Tuan Nik Nazmi bin Nik Ahmad in the official statement. It may also be a huge irony if CBAM revenue is used to fund and finance climate action in developing nations, including loss and damage compensation.

Regardless, Malaysia needs to start facilitating response and crafting strategies to address the trade implications. This may include accelerate the implementation of carbon pricing but engaging in structured dialogues to address specific concerns and giving inputs to CBAM design and implementation towards consensus building. This is not new to Malaysia, as they together with Indonesia, are part of a Joint Task Force to implement the EU Deforestation Regulation (EUDR), a similar trade policy but to address the import of commodities linked to deforestation.

COP28 marks a significant step forward in wording, yet it remains a mixed bag of progress across various fronts. The overall outcomes from COP28, and previous sessions, fail to align with the urgency stated by the IPCC. The 6th IPCC report underlines the imperative to peak emissions by 2025 and achieve a 43% reduction by 2030 to limit warming to 1.5 degree Celsius. Regrettably, the incremental progress at each COP falls short of the decisive actions necessary to effectively curb global warming. Despite the growing extravaganza of each COP, with increased attendance and pavilions, the substantive outcomes continue to lag behind the needed trajectory.

The success of COP28 and its potential to constitute a watershed moment in human history are dependent on future COPs securing and unlocking funds. This financial commitment is critical for shifting our trajectory away from environmental collapse and towards one powered by clean energy, as well as for ensuring environmental and social safeguards against climate effects.

For now, the biggest winners of COP28 are the developed nations, the oil and gas industry, energy companies, as well as lobbyists for carbon capture and carbon credits. Unfortunately, the ongoing losers remain the planet itself, vulnerable communities—especially in developing countries—ecosystems and species, and the prospects for future generations.

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