Surprisingly, COP28 had a happy ending in the hot city of Dubai, a few miles away from the largest gas reserves in the world. With an energetic bang of the gavel, Sultan Al Jaber, president of COP28, brought to a close a conference that was on the verge of failure. “The world must embark on a new path,” said Al Jaber. Following our North Star, we found this path.” As is well known, the Abu Dhabi National Oil Company, headed by Al Jaber, will be investing at least $150 billion over the next five years to increase drilling for oil and gas reserves. The euphoria in the luxurious hall in Dubai was therefore also justifiable, considering that the group of oil-exporting countries, led by Saudi Arabia, had succeeded in drafting a text that made no mention of phasing out fossil fuels or expanding renewable energies.

Key agreements on mitigation

The truth is, despite all the justified doubts, the outcome of the first global stocktaking of COP28 can be considered a substantial achievement, which will serve as a basis for the forthcoming global climate negotiations. Although there was no clear agreement on an exit from fossil fuels, it was possible to draft a text that maintains “a transition away from fossil fuels in energy systems in a fair, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net-zero emissions by 2050”. In addition, the document calls for “tripling global renewable energy capacity and doubling the global average annual rate of energy efficiency improvements by 2030”. Also in the mitigation chapter, which was the most controversial this year, the goal is set to “accelerate efforts to phase out the continued use of coal-based energy.”

Although they may seem trivial, these three major mitigation targets were far more controversial than the financing issues, which were at the center of the debate a year ago at COP27 in Egypt. For the first time, the World Climate Conference, which brings together nearly 200 countries, is agreeing to put an end to fossil fuels. 

It is no trivial matter to reach a global consensus on a transition that involves many risks and enormous costs for key sectors of the economies of many countries. As already noted by the International Energy Agency (IEA), global coal consumption reached a new all-time high in 2022 and will remain close to that record level this year, due to strong growth in Asia. In 2021, China and India already accounted for two-thirds of global consumption, meaning that the two countries together used twice as much coal as the rest of the world combined. By 2023, their share will approach 70%. As might be expected, reducing coal in these countries entails enormous social and economic costs.

Latin America and mitigation

As is well known, the region as a whole is not on the list of the largest emitters of CO2, although Mexico separately is ranked 14th. At least three countries will have to make crucial decisions to abandon coal mining: Colombia, Mexico, and Chile, among others. Although it may not have the importance of China in consumption, Colombia is the fifth-largest coal exporter in the world. “The main role of coal in Colombia is not power generation, but foreign exchange,” says Paola Yanguas-Parra, energy policy and transition economist at the Fossil Exit Group of the Technical University of Berlin. Chile, on the other hand, has 28 coal-fired power plants. In Mexico, coal-fired power plants produced 10% of electricity in 2020 and emitted 22% of the energy sector’s total GHGs, according to estimates by Mexico Climate Initiative. According to experts, energy policy in Mexico shifted from expanding renewable energy projects to prioritizing the use of fossil fuels and promoting state dominance through the Federal Electricity Commission (CFE) and Petroleos Mexicanos (PEMEX).

Apart from coal, oil extraction continues to be a challenge for some Latin American countries. According to the IEA, three countries in the region will play an important role in the world’s new oil boom: Brazil, Guyana, and Argentina. Argentina is experiencing growth in its oil and gas production thanks to Vaca Muerta, one of the largest shale oil and gas fields in the world. Guyana is capturing the spotlight after the discovery of proven crude oil reserves, which could lead to the production of 1.2 million barrels per day by 2028. This would make Guyana the country with the highest barrel production per capita, surpassing Kuwait. Given these prospects, it is understandable that this country is losing interest in giving up oil extraction. Brazil, the largest country in South America, has doubled its oil production in the past 20 years, reaching 3 million barrels per day by 2022. The truth is that Brazil was tactless at COP28 in announcing its entry into OPEC+ after promising to move away from fossil fuels. It is well known that, historically, Venezuela, Mexico, Ecuador, and Colombia have been leaders in oil production in the region.

Lula’s relationship with oil is complicated and ambivalent. When huge reserves were discovered off the Brazilian coast in 2006, Lula said: “This discovery… shows that God is Brazilian”. Not only in Brazil but also in Ecuador and Venezuela, the extractivist phase, stimulated by soaring oil prices, helped finance social programs benefiting the poor. Achieving a just transition in Brazil and Colombia will require the formulation of a long-term strategy, in which both carbon pricing and a change in the energy matrix will have to play an important role. 

Climate finance and external debt

In many countries in Latin America, Africa, and Asia, a just transition to zero-emission economies is, under current conditions, practically impossible. The burden of external debt grew exaggeratedly, especially after the COVID-19 pandemic, and has been exacerbated by rising interest rates in creditor countries. The creditor structure of most Latin American countries has changed recently. Private holders have become the most important creditors. As noted by the Economic Commission for Latin America and the Caribbean (ECLAC): “despite relatively favorable sovereign debt repayment profiles, the considerable need to refinance short-term debt exposes countries to market volatility, especially when interest rates rise”. Under these conditions, climate finance in the form of credits is quite questionable. That is why the criticism of many developing country leaders toward rich nations such as the United States, Europe, and Japan is more than justified.

Assuming a constructivist approach

The dynamics and results of COP28 and the Paris Agreement contradict the analyses of international relations based on so-called neorealism. Also in this recently concluded climate conference, it has been possible to observe that with the Paris Agreement and key actors such as the International Panel on Climate Change (IPCC), an international institutionality has emerged that cannot be so easily questioned. Saudi Arabia’s thwarted attempt to boycott the conference is a sign of this.

A constructivist approach could allow us to obtain an analysis closer to the reality of climate cooperation. Such an approach could offer a broader vision, especially for governments such as Brazil’s, which had to face an ambivalent position by asking rich countries for commitments that they are not in a position to fulfill. For its part, the initiative shown by the Colombian government could be crowned successfully if it is accompanied by a more pragmatic vision of international relations.

Although the agreement reached is not legally binding, the message for governments and business leaders is clear: the abandonment of fossil fuels and the promotion of renewable energies are practically unstoppable. This is because climate change is a threat to everyone equally. To think that having more powerful armies or more stable financial systems makes one better able to deal with the problem is as illusory as touting a populist denial of the problem. In any scenario, the damage and losses will be as considerable as the unrest and citizen protest.

Based on a constructivist approach, the only reasonable alternative is to develop intelligent mitigation and adaptation strategies. Many actors will have to question even the concept of  Global South, which so far has a connotation, if not contradictory, at least very diffuse and not very operational when it comes to implementing reasonable strategies against climate change. If both Saudi Arabia, a climate change denier, and China, the largest emitter of gases, are, among others, part of the Global South, it will be very difficult to reconcile the interests of Central American countries and island states, so vulnerable to climate change, with those of these countries.

Colombia, Chile, and Brazil are Latin American members of the Coalition for High Ambition Multi-Level Partnerships (CHAMP) for climate action, established to improve cooperation in the planning, financing, implementation, and monitoring of climate strategies, including, among others, those determined at the national level. Both Germany and the European Union are also members of this coalition. Latin America and the Caribbean offer enormous potential for developing global leadership for a just transformation. It is therefore important to strengthen climate cooperation within the region by seeking points of consensus for an alliance against denialism.

_{*Translated by Janaína Ruviaro da Silva from the original in Spanish.}