People walking in and out of a building that has signs to COP28
People walking in and out of a building that has signs to COP28

COP28 closed last week with an agreement that signals the “beginning of the end” of the fossil fuel era

Following the close of COP28 last week, Markus Müller, Chief Investment Officer of ESG & Global Head of Chief Investment Office at Deutsche Bank’s Private Bank, speaks to LUX about his key takeaways from the conference

LUX: Did COP28 move the dial on climate change?
Markus Müller: Yes, from my point of view it did. Look at the commitments to triple global renewable energy capacity by 2030 and double energy efficiency. But it is what is implied by such commitments that is most interesting. This isn’t just a matter of developing pure supply. We’re also going to have to develop markets – by changing permissions and enhancing grid connection, to mention just two factors out of many.

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We also have to recognise who can do what by when. Rapid adoption of renewables may pose the biggest challenge for the Global South. After nearly 30 years of these climate change conferences, it’s also highly important that fossil fuels have finally formally been mentioned in the commitment for a “transition from fossil fuels to cleaner energy”. In statements for previous COPs, there has just been talk about reduction of harmful subsidies. This is a clear step further. The problem for countries is now to make this happen without sacrificing living standards.

Dubai and the sea from an aerial view

Global solidarity was shown at COP28 when negotiators from nearly 200 Parties came together and signed on the world’s first ‘global stocktake’ to ratchet up climate action before the end of the decade

LUX: What was your best professional moment at COP28 and why?
MM: My best professional moment was a talanoa-style dialogue with the Island Youth from Hawaii, Philippines, Palau and Samoa. It was impressive to listen to the Island Youth discuss their views and hear their take on challenges ahead. The dialogue helped me understand how disconnected the world still is on many topics – but it also revealed a lot of hope for the future. We know what to do on climate change but we have to act now.

LUX: What was the biggest disappointment and why?
MM: The biggest disappointment was that the sheer scale of event hindered effective dialogue between businesses, policymakers and NGOs. Compared to recent COPs it was simply too big – in terms of numbers of attendees and, for example, physical distance between their stalls. We could have done a better job in bringing together the “needs” with the “what” and the “how”.

People standing behind a table on a stage with DUBAI 2023 written on a screen behind them

Over 85,000 participants attended COP28 including civil society, business, Indigenous Peoples, youth, philanthropy, and international organisations as well as world leaders

LUX: Do you sense genuine momentum towards changing economic thought to take account of natural capital, or is this still an outlier?
MM: I think that nature is coming more and more towards centre-stage but it still isn’t there yet. Next year’s biodiversity COP (COP16 in Australia) should however help make it clear that if we want to tackle the climate crisis we also need to solve the biodiversity and ocean crisis. We need nature for mitigation and adaptation and we need to think more in terms of natural capital to work out how best to do this.

LUX: “Overall, COP28 did more harm than good. The environmentally damaging deals that emerged from informal meetings will do more harm than any resolutions will do good”. True or false, and why?
MM: False. What about all the positives what we all bring home from our informal conversations too? Also remember how news reporting from this and previous COPs have raised awareness of environmental issues in public discussion worldwide? COPs have normalised open discussion of topics previously seen (wrongly) as not relevant to the global citizen. We probably don’t give enough prominence to the publication of the “Global Stocktake” either. This text lays not only the pathway that nations must take to limit global warming to the previously-agreed-upon goal of no more than 2°C higher than pre-industrial levels—but also individual countries’ progress along this path.

people shaking hands at a conference

COP28 saw Parties agree to Azerbaijan as host of COP29

LUX: Hypothetical question: you are hosting one of the next COPs, and you have absolute power over the final resolution. What would it state – in a way that is both effective and implementable?
MM: I’d make three commitments. First, for Nature and Ocean to join Climate at centre-stage of policymakers’ attentions. Second, to prioritise fixing problems with the allocation of climate finance. Third, and this is very much linked with the second commitment, to put an explicit focus on fairness. Most such finance to middle-income countries for projects that reduce emissions, such as wind or solar energy.

Read more: COP28 Diary by Darius Maleki

Far less goes to the poorer countries, and even smaller amounts to help countries adapt to the effects of the climate crisis. Many participants believe that the focus of future COP meetings needs to be on a fair way to reach targets. As part of this, developed economies need to band together to financially support developing economies in the search for a new, less fossil-fuel intense development path. I think we’ve seen a change in attitudes here in recent COPs and I look forward to them delivering much more here in coming years.

Markus Müller is Chief Investment Officer of ESG & Global Head of Chief Investment Office at Deutsche Bank’s Private Bank

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Dubai at night

World leaders gathered in Dubai, UAE for COP28 with the aim of curbing climate change from 30th November to 12th December 2023

German sustainability leader Darius Maleki, co-founder of one of the country’s most important business sustainability initiatives, gives us his candid lowdown of more than a week spent at COP28

Arriving at Dubai Airport from Frankfurt, I was impressed to see the amount of buzz around the conference, with dedicated entry points for COP28 delegates, as well as information counters in every corner.

I  made it to the site of Expo City on the morning of 2nd December. At the entrance of the Blue Zone, I was overwhelmed by the diversity of the crowd, all in line to pick up their UN badges.

Man standing at a sunny conference

Darius Maleki in the opening area of the Blue Zone, where formal negotiations involving world leaders, senior climate politicians and scientists take place

The first official event I attended was the DZ Bank x UNECE Conference in the Action Room of the Blue Zone, discussing Transition Finance. Keynote speakers included Dario Liguti and Souad Benkredda, with a summary by Tatiana Molcean revealing concerns about the current 2-degree trajectory, the need for sector-specific plans, and financial institutions’ lack of understanding of or ability to identify these sectors. The session emphasised the importance of financial institutions, especially fund managers, recognising the commercial value of their undertakings for effective scaling. There was a realisation of a technical knowledge gap for private sector scaling, prompting discussions on incentives for private sector funding for transition funds.

Large plant like structures

Terra – The Sustainability Pavilion at COP28 was designed by UK-based Grimshaw Architects and hosted talks and events around green finance, nature, energy and policy

I approached a UNECE director to discuss how we can scale the technical know-how for the private sector. It is commendable for the government to be ahead, but if they cannot scale alongside the private sector, it may lead to a massive “drag-along,” increasing reluctance from investors and fund managers to follow net-zero activities. There is a need for clear incentives to signal the scaling of private sector funding for transition funds.

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The director’s response was blurry, as they honestly do not know either. However, this signals to foundations like ours that there is a technical knowledge gap that charitable, non-partisan institutions can fill. This realisation opens interesting new opportunities.

Boardroom at a conference

Topics covered at this year’s COP included adaptation and resilience, capacity-building, climate finance and climate technology

The interconnectivity of the buildings and areas at COP28 was incredible. Never have I been in a place where every visitor’s wish was fulfilled. From food booths to bikes and shuttles everywhere, we could easily escape the heat while traveling from building to building. For the first three days, I visited countless Country Pavilions in both the Green and Blue zones. I was particularly surprised by the strong presence of Ghana, Vietnam, Iraq, and Japan compared to other big nations.
The topic of sustainability will remain relevant for decades, so we need to prepare ourselves and act as a role model for future generations. Perhaps we should reconsider the term “sustainable transformation” to “sustainable and generational transformation”.

Read more: Ted Janulis of Investable Oceans on his hopes for COP28

For now, I will start by working my way through all the business cards, emails and presentations gathered during my 6 days at COP28. I might need to be prepared for an all-nighter.

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Split shot of the oceans and some cliffs
Split shot of the sea and some cliffs

The rocky desert coastline of the northern Red Sea. Sea levels around the world are rising and coral is being bleached by acidification due to increasing CO2 levels

Amid much scepticism about whether the global climate summit COP28, taking place in Dubai over the next few weeks, will actually bear any positive results, there are rays of hope. Ted Janulis, investor, entrepreneur and founder of Investable Oceans, outlines the reasons he is feeling cheerful in the run-up to an event that needs to change the way we think about and deal with climate change

In just a few days, 70,000 people will convene in Dubai to attend COP28 (the 28th annual “Conference of the Parties”), where delegates from countries all around the world will discuss how to address the climate crisis. The UN Framework Convention on Climate Change (UNFCCC) – tasked with finding ways to reduce emissions – will track member states’ progress on emission reductions and negotiate further collective action, alongside business leaders, climate scientists, journalists, and others in attendance. Major topics will include how vulnerable communities can adapt to climate change and how to achieve net-zero emissions by 2050.

We’re at a critical juncture for our climate and oceans, so this COP is particularly important. While increased commitments provide grounds for some optimism, our oceans and climate face continuing serious challenges. We’re not on course to stay within the 1.5C increase above pre-industrial levels scientists warn is required to avoid serious environmental and human consequences, and in addition we’re falling far short of the $150 billion per year cited by recent research needed to achieve the goals of Sustainable Development Goal 14, Life Below Water by 2030. The bottom line, as former president of Ireland Mary Robinson eloquently put it: “We cannot afford to have a bad COP”.

A camel walking by the sea

Desertification and coastal erosion are major issues facing the world

Despite these daunting circumstances, we’re looking forward to seeing oceans having a substantial presence at COP28. This is a continuation of a theme that has gained momentum throughout 2023: there is growing recognition that the oceans, the world’s largest carbon sink, will play a pivotal role in providing solutions for climate change.

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This year’s Climate Week NYC in September was a clear demonstration of this progression, as the number of events, announcements and real outcomes increased substantially from previous years. Amy Novogratz, Co-Founder and Managing Partner of Aqua-Spark, asserted that: “Climate Week is feeling very Blue this year, finally!”

External shot of an ocean pavilion

The Ocean Pavilion at the 2022 COP in Sharm el-Sheikh. The 2023 Pavilion features ten ocean themes

A substantial increase in investable opportunities has added to this marine momentum. At least 10 new blue economy dedicated funds have launched over the past year, bringing the total count to over 30. A major focus of these funds is how to measure the environmental impact of sustainable ocean investing. In other recent news, a variety of blue bonds have come to market that involve debt-for-nature swaps, sovereigns and corporations, and Rockefeller Capital Management and KraneShares now offer an ocean engagement themed Exchange-Traded Fund (KSEA).

On the investor side, oceans made their debut on the plenary stage at the GIIN’s annual conference in Copenhagen, where discussions covered the proverbial waterfront, from ecosystem conservation to coastal resilience to blended finance to nuclear sharks. We also saw increased interest in the ocean sector from “terrestrial” investors. For example, sustainable agriculture funds are beginning to look at aquaculture as an attractive adjacent opportunity to their core focus.

Coral reef under the sea

A towering Acropora coral, one of the hundreds of coral reef species that help support up to 25% of all marine life

The upcoming COP28 will seek to capitalise on this surge of ocean interest and activity. Notably, oceans will be included in the COP28 thematic programme for the first time, with a special focus on 9th December. Together with an array of ocean events, gatherings and presentations at different pavilions, this represents a substantial increase in the ocean’s presence in global climate conversations and solutions.

Read more: Baroness Scotland and Markus Müller: a call for action at COP28

One of the highlights of COP28 will be the return of the Ocean Pavilion, which will bring diverse stakeholders together in a dedicated space within COP’s “Blue Zone” for its second year. The organizing partners, Woods Hole Oceanographic Institution and Scripps Institution of Oceanography at UC San Diego, will lead 32 partners through two weeks of events. The Pavilion programming is structured by ten themes organised under three tracks: Changing Ocean, Climate Consequences, and Future Ocean.

A pod of dolphins swimming in the sea

A pod of charismatic dolphins swimming in the shallows. Overfishing and bycatch are major issues for our oceans

The Pavilion is meant to inspire ocean-focused solutions through 70+ panel sessions, meetings and in-depth discussions. We are particularly excited about the “Blue Economy and Finance” theme, which explores the role that finance can play in ensuring that the ocean can continue to protect and provide for human societies in the coming decades. For example, Margaret Leinen, Director of Scripps Institution of Oceanography, will moderate a panel, Frontloading Equity in Financing Coastal Climate Resilience, exploring questions such as: How can we scale climate finance to reduce climate risks, speed recoveries, and reap the benefits of resilience? And how can our quantification of the financial costs of climate change be redesigned to yield equitable outcomes?

Despite all the headwinds, we are hoping for positive progress over the next weeks in Dubai.

Ted Janulis is Founder & Principal, Investable Oceans

Co-written with Helena Janulis, Business Development and Special Projects, Investable Oceans

All photos by Morgan Bennett-Smith

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Reading time: 4 min
Stone building in the sand by a power line cop

Desertification is one of the key consequences of climate change

With COP 28 just days away, Commonwealth Secretary General Baroness Scotland and Deutsche Bank’s Markus Müller speak about the need to prioritise implementation of climate goals at the critical global conference. In a conversation moderated by LUX Editor-in-Chief Darius Sanai, the Secretary-General and Deutsche Bank executive underscore the need for collective action for climate reversal on the part of the international community to counter an increasingly urgent crisis
A woman wearing pearls, a black top and patterned scarf over her shoulder

Baroness Scotland

LUX: What are your hopes and expectations for this COP?
Baroness Scotland: My hope is that this COP will be the implementation COP. If you look at the COPs which have preceded it, you will see that there has been an awakening of the understanding about how urgent the danger is.

We have been talking historically about the existential threat for many of the members of my Commonwealth family. But that threat is not a threat: it is here. It is omnipresent. The “1.5 to stay alive” slogan is not a slogan, it is a reality. At the moment, 1.5 is on life support. We must give it the oxygen it needs. It means the difference between whether some of our small island developing states will continue to exist, or whether they will disappear.

Although it is encouraging to hear Australia say that they will take the people from states which are subsumed by the sea, such as Nauru, this still means that their traditions and cultures will all be gone. Their graveyards will be at the bottom of the sea after thousands of years of existence.

My aspiration for COP 28 is that we will deliver on the promises we will make. The $100 billion a year by 2020 that we were promised in 2009 still has not been delivered. It has to be delivered.

LUX: The richest countries are good at words, not implementations. What needs to change in order for that to be delivered?
BS: One change that has already happened is that businesses and the private sector are now intimately involved in the delivery. If you look back at previous COPs, even in 2016 there was still a debate as to whether climate change was real. There was a debate as to whether we would go green and blue in terms of energy. There was a debate about loss and damage. Those questions have been answered. If you look at what happened in Glasgow, the idea that the private sector would not be intimately involved in order to deliver the solutions is now unthinkable.

Second, which I have been saying for a while, we must recognise that human genius got us into this mess, and will now have to get us out of it. If you look at the industrial revolution, it was amazing, but that brought more devastation climatically than anything else. Human genius will have to get us out again. Some of the extraordinary developments – such as geo-spatial data – will allow us to better understand what is happening, and therefore, perhaps, how we can reverse it.

Large palm trees in the sand

Oases in North Africa are disappearing as the Sahara spreads northwards due to climate change

A third change is that we have accepted that this isn’t just about adaptation and mitigation. When I first said in 2016 that we needed a regenerative approach to development which would reverse climate change, people thought that I was crazy. Now, everybody accepts that we need a regenerative approach – one which adapts, rather than just mitigates.

A man wearing a white shirt and black suit

Markus Müller

LUX: Markus, as an economist and also someone who has said things that some people might have considered crazy at the time, but end up being true, what is your perspective on this COP?
Markus Müller: I think that this COP will be crucial. I completely support what Baroness Scotland has said. If we do not recognise what it takes now, it will be very difficult further down the line.

First, the Global Stocktake, which will take place for the first time at this COP, will reveal some uncomfortable truths. We will hear, for the first time, how far we are behind our plans. I hope and I think that this will be an awakening moment.

Secondly, we need to get a better understanding of global finance. Perhaps I am biased, but if we do not give the global financial market a role to play in this transition, then it won’t happen. The states alone will not be able to do this; we need the capacity of global finance – be it through risk pooling, or through its distribution channels of money, location and distribution – so that we can work on these devastating aspects.

From the perspective of an individual country, their financial needs are huge. From a global financial market point of view, this is more manageable. We have been speaking about this for years, but no solutions have been delivered so far. We must listen to financial institutions. We have the tools. Together, we are powerful, but in terms of negotiation, business, and finance, the right angle is missing. In this COP, finance is crucial, and then – of course – the transition discussion.

LUX: Have the opportunities for financial institutions to work with Commonwealth nations and governments changed in the last couple of years?
MM: We have always had excellent relationships with the countries of the Global South and Africa. However, as we see real world climate changes, financial needs are changing too.

It’s no longer about financing the past, the traditional infrastructure and traditional energy supply. We now need to finance the future – and this is something which is still missing. The vision of how the future could look is not there. We should ask ourselves, “What should we have done in order to be healthy in 2050?” as if we are in 2050 already, so that we know which direction we should take.

This discussion should take place in financial institutions. President Macron said this very clearly. We have the International Monetary Fund (IMF). We have the World Bank. We have these huge international institutions. But we need to be ready for the 21st century.

BS: We must also help them better understand debt, and to view the whole thing as an ecosystem. Up until recently we have looked at each element as a hermetically sealed, self-contained issue. But they are absolutely not.

A mosaic of white stone walls in the sand cop

With global warming making desert margins unlivable, population flight is devastating communities and leading to refugee crises

When I started at the Commonwealth, we said that we needed a regenerative approach to climate change. That meant that we needed to do more on the ocean, so we began the Commonwealth Blue Charter. One of the things I really want is to increase the amount of money going to oceans, because it is absolutely unacceptable that about 0.01% goes to oceans. We are a blue planet, we’re not a land-based planet and to actually be putting almost nothing into what makes up the majority of the world is just crazy.

It is crazy that we are not using our intelligence better. Our Climate Finance Access Hub in Mauritius has mobilised $7.8 million dollars: we are talking about peanuts. We have deployed 19 climate finance advisors across Africa, the Pacific and Caribbean regions. We are working together with those advisors, and they have already delivered $316 million into the hands of the small states with more than $500 million in the pipeline. But I do not have the money to put a climate finance advisor in every country. I wish I did.

We have seen that these applications for international climate funds are taking too long to make. For some of our LEDCs (least economically developed countries), it will be two to four years before they get the application through. However, our most recent application for five countries, took less than a year, and we got $63 million. Why? Because in the last 7 years, we have honed the process. So when we look at loss and damage, we cannot put in the old-fashioned, useless system. We have to put in a speedy, effective system which will get people the money to make a difference. Bit by bit we are changing it.

But we need debt swaps. We need a good carbon market. We think we are within touching distance of doing that, because using satellites and geo-spatial data, we are within touching distance of understanding how much every tree on the planet can sequester. We will then have the granularity to have a real carbon market, based on real, concrete estimates.

That could be a gamechanger between the North and the Global South. The Global South still has the majority of the lungs of the world, which they are being asked to maintain – but nobody is paying them. If we can get a real carbon market, that means it will be possible for us to do the reversal in the Global South to keep us alive.

A water tower in the desert

Water towers in Morocco bring together local people for their construction and maintenance and create a common community dedicated to their sustainable use. When the water dries up, due to desertification, community bonds are broken – a pattern repeated in climate-related environmental developments around the world

MM: I can agree. We have been starting to understand the nature topic better. Nature is a very valuable collateral, because it creates ecosystem services on which we all depend.

BS: It is remarkable how much has changed between when we started the Blue Charter Action Group and now. We worked with them on corals and, now, understanding the role that they play in restoration has improved globally. I have just returned from the Maldives, where I was looking at mangroves, which are huge in terms of sequestration,  for and protecting coastlines. That conversation was not even happening six years ago, but now it is critical. The Maldives want to restore their mangroves. But the degradation is already there and, unless we do this quickly, it is not going to change.

MM: We must convince those who retain traditional thinking about these areas. This is a big hurdle, but if we activate the right players to do this, the solutions are there. Two years ago, we joined the Ocean Risk and Resilience Action Alliance (ORRAA), and moved with speed. Perhaps we did not do enough with regards to concrete finance, but we wanted to understand the matter first, before unleashing the power of our balance sheet.

BS: The way in which I have been approaching this from the moment I came into the Commonwealth was to ask this: “Where do we want to be in 2030? What are the outcomes?” We’ve been saying, if that’s where we want to be in 2030, what do we have to do three months, six months, nine months, a year, two years, three years? Although other people thought it was crazy, we were right.

Those of us in positions of power now need to understand that we will all be on the same indictment. History will look back and say, “tell me their names. What were they doing? What were they thinking? Why did they not move at a time when it was possible?”

But the reason why I’m confident and determined is because humanity is always at its best and its most ingenious when our backs are against the wall. And right now, globally, our backs are against the wall.

MM: This is the interesting thing about development. You need to have a decent degree of scarcity for development to really kick off. It’s sad in one way, but it’s also a very convincing catalyst for change.

A burned and deserted car in the sand by a wall

The aftermath of a August 2020, wildfire which burned houses, date palms, orchards, vegetable gardens and more than 400 heads of cattle in the oasis of Tighmert in Morocco.
The increase in temperature and water stress has a considerable impact on the vegetation of the oasis, which, dried out, becomes more likely to catch fire

I also think that this discussion that we are having is proof that we are anticipating what’s going to happen. All backlash against ESG or sustainability are, for me, a signal that ESG and sustainability are being seen as a priority – otherwise we would not be discussing them as intensively as we are now.

LUX: Are developments around the world down-grading consciousness of what needs to be done around sustainability and COP?
BS: I think we woke up and smelled the coffee during the COVID pandemic. There is almost no one I know who was not affected either directly or indirectly by COVID. Most of us know someone who died, someone who was badly affected and/or we ourselves suffered from the deprivation, the mental stress, etc. I think it made a lot of people wake up and think, “What is life all about? What do I value? Am I sure I’m going to have it tomorrow?”

The other thing it did was emphasise the fact that unless we make sure others are safe, we won’t be safe and the people we love won’t be safe. The madness that we’re going through globally at the moment, the fact that every region of our world seems to be under threat, is making this fact even more omnipresent. It’s a tangled web of interlocking crises, and that’s what makes this time so volatile, so dangerous. If we don’t have a world, all the other things are not going to matter because we’re not going to be here.

I think for those in the Global South, this has remained the number one priority. What’s interesting is the agenda is being raised in the Global North, because the number of climatic disasters in the Global North is finally rising. Before, people would say the crisis had nothing to do with them. But when your coastline has been battered, when countries that have never seen a hurricane are suffering them, when trees are falling and floods are happening, when ordinary people’s lives in western cities are being made conscious of climate change, now it’s something people want to talk about.

MM: We know that cooperation is a very shy and very sensitive creature. Not being collaborative is not the superior strategy, it is the naive strategy. The smartest strategy is collaboration, but collaboration only works if there is a mutual dependency on it. This is exactly what Baroness Scotland just described; we now have a mutual dependency which is becoming evident and measurable.

A man holding a dead tree in the middle of the desert

A global temperature rise of several degrees, which the world is on track to suffer over the coming decades, would make this land uninhabitable

How can we solve the biggest problem humanity is facing? I believe in nature. Nature is stronger than humans, and it is currently taking back what humanity has taken. We need to be humble, but also use this as a tool for prosperity, because we need prosperity in order to survive and to create social stability. This also goes back to the aforementioned human genius, and to nature’s genius. Let’s activate this and let’s get there.

BS: And just think about the technological changes we’ve gone through in the last year. AI and digital and machine learning is enabling us to do analytical work exponentially faster. Before, you would have to do computations, which would have taken you 5-6 years. We’re now able to do the same computations within the space of weeks.

In the Commonwealth we’ve created and launched an AI consortium to look at the needs of small and developing states in particular. There are 42 small states in the world and we have 33 of them; if we can address the needs of those small states, this becomes a microcosm that we can use to solve many other problems. This interconnection and understanding that what works for one of us could work for all of us, is particularly powerful and why I am so delighted that the Commonwealth of 56 is being used as a kind of petri dish. We’ve got all regions: rich ones, poor ones, landlocked, island states, developed, all faiths. Therefore, if we can work something out that can work for our 56 countries, it is likely that it could become a pathway for the rest of the world.

LUX: What would be a satisfactory, realistic COP?
MM: I think what would make me satisfied is, first of all, to come to a joint conclusion on how to phase out fossil fuels in a way that this transition provides further prosperity for our countries and societies.

Secondly, I would say that this COP would be a successful COP if we were to get an agreement on how to finance the inclusion of the Global South in the economic and sustainability transition processes. The Loss and Damage Fund was meant to be this tool, but there is no money behind it. We need to get this signed by all nations.

Finally, I would love to see that nature as a whole, be it the ocean or biodiversity, gets closer to the climate discussion this COP. We must use tools like carbon credits and biodiversity credits to transfer the money from the users to the object or subject to be financed. For example, rainforests are our common goods to sequester carbon, to really get the finance mechanism working.

A man looking for water in a well in th desert

Climate change means that in some areas, water resources have vanished, while other lands are disappearing under increasingly acidifying oceans due to rising sea levels and higher CO2 levels

BS: I agree, and that really means we will have created a regenerative model of sustainable change to deliver climate reversal at this COP. That’s what we need. We also need – and I think we will hopefully get it – an understanding that this is a multifaceted, multidimensional approach needed by everybody. It will be business, it will be foundations, it will be individuals, it will be governments, it will be led by all of us.

Markus is right. We’ve got to get the money right, and there is no point in making promises that are then not kept. We’ve got to focus on action and what that action is going to be and by whom. I think the most important thing is to be honest with ourselves and with each other as to what this quantum leap, this paradigm shift, is going to mean for each of us. And then we have to do it.

MM: I see this COP as a gym, as a fitness centre, where we all struggle and get ready for the next step. I don’t know how much weight I can lift, but at least I’m training, right?

BS: And instead of doing the hundred metre dash on our own, we’re on a relay and everybody knows which run they have to make, where the baton is and who to give it to. There’s an understanding now that unless we run as a team and we connect, we’re all going to lose. If anybody drops the baton, it’s over.

All photography in this article from the series ‘Before it’s gone’ by M’hammed Kilito, winner of the 2023 Photography Prize for Sustainability, as featured in LUX

The 28th Conference of the Parties of the UNFCCC (COP) is set to take place between the 30th November and 12th December 2023

Baroness Scotland is the 6th Commonwealth Secretary-General

Markus Müller is Chief Investment Officer of ESG & Global Head of Chief Investment Office at Deutsche Bank’s Private Bank

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Reading time: 16 min

Karen Sack aims to drive investment into coastal and ocean natural capital to combat climate change

Karen Sack

It is under three weeks until the start of one of the most important climate summits in history. At the end of November, world leaders gather in the UAE for COP 28, an ever-more urgent climate crisis looming amid growing geopolitical instability. Here, Karen Sack, head of a major organisation devoted to driving major finance to ocean-related sustainability initiatives, outlines what needs to happen – and what she fears may transpire instead

LUX: Speaking as Executive Director for the Ocean Risk and Resilience Action Alliance (ORRAA) as well bringing in your own views, what do you think should happen at COP 28?
Karen Sack: This year we have seen the number of climate disasters ratcheting up. We are so close to that 1.5 degree increase of the world’s temperature. September has smashed all the records in terms of the amount of warming, with a 0.5 degree Celsius rate of change. From our perspective, there are five key focus areas for us at COP 28.

The first and most important is that we have to keep that 1.5 degree target alive. That is the Paris Agreement target, adopted at COP 21. It is absolutely critical on all kinds of scientific levels, in terms of tipping points as well the existential reality, particularly for small island developing states, and for the potential impacts on coastal communities in developing countries as well as everywhere around the world. That should be the absolute focus of this meeting and the intent should be on how to do that, in terms of outcome for the COP.

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Secondly, and very importantly, is that as we look at the real need to scale down emissions to phase out fossil fuels, we also need to recognise that a liveable planet, particularly a liveable planet for humans, requires the regeneration of ocean environment. Nature needs to be at the heart of the story, in terms of addressing the biodiversity and the climate crises, because together we need to address those two issues.

The third key element is recognising that if we are going to address mitigation, adaptation and resilience – three of the core elements of the COP – as well as bring in nature, we have to focus on regeneration. We have to move beyond sustainability, which we predominantly focused on in the past. If what we do now is just sustainable, that is insufficient. We have to address mitigation, adaptation, resilience and regeneration. We need to significantly upscale sustainable finance and investment. From our perspective, that needs to be scaled into blue nature – into the ocean, as a critical carbon sink and biodiversity reservoir, as well as a key source of livelihood.

Open ocean carbon- capture is an emerging technology involving extracting and storing carbon dioxide by using nature or artificial solutions

The fourth thing we need to look for regarding our focus on maintaining resilient coastal communities, is to ensure that where investments are going to be made in coastal areas that there are high quality safeguards and guardrails for those investments, so that those communities can thrive and that investments made are made with the full consent and engagement of those communities.

Fifth and finally, what is really key to get out of COP28 is to establish that there are certain things which should not be investable propositions. In the ocean space, that means not investing into offshore oil and gas or emerging sectors like sea-bed mining that could be incredibly destructive, and for which the full suite of impacts are as yet unknown.

From our perspective, there should be an absolute, precautionary pause on any investment into this potential new sector until there is much more information, better controls and better safeguards in place. The question remains as to whether it should happen at all, but there should at least be a pause until 2030 for sea-bed mining. My view is that it should not happen at all.

LUX: You have said before that there is enough talk but not enough action. What needs to be done around sustainable finance to make that gap close?
KS: Fundamentally, there must be an agreement to move forward on the loss and damages fund. There have been ongoing negotiations, but this needs to be sorted out and settled so that funds can begin to flow into that loss and damages fund and then to the communities most affected.

Secondly, we have got to close the gap on adaptation finance; the UN Environment Programme released a report just this past week which showed that the finance gap, for adaptation finance, is 50% higher than it was previously thought. That means we have got to start looking at the hundreds of billions of dollars that have got a flow from the public as well as the private sector.

The biggest risk that we are all exposed to is inaction. The more we can do earlier in the process to drive financing into adaptation and resilience, as well as mitigation, the better, and the less costly that will be in the long term. That is key to closing those adaptation gaps. And in the ocean space, working with partners and the high-level climate champions, we have identified five ocean breakthroughs which need to be addressed.

LUX: Is there a danger of double-counting or under-counting?
KS: It is essential that governments start to work across treaties rather than keeping climate and ocean and finance treaties separate. We need to start to think about what is needed to address the issues across the climate and the nature space to prevent under-counting or double-counting.

LUX: What will incentivise governments to do that? What needs to happen?
KS: In part, it is putting numbers on the table: what is the need and what is needed to address it.  Finance ministries are starting to identify these numbers and address what these gaps mean. Hopefully that begins to draw the discussion out of ministerial silos and begin to bring an all of government approach to the table in addressing them. Once that begins to happen, then it also requires Ministerial level engagement and how key ministers can get together more informally to address those issues. I know that a couple of months ago in Vancouver, the Canadian Minister for Environment and Climate Change flagged the need for ministers to come together across these treaties to address some of these issues. This is just a starting point though, because the issues we are facing extend beyond what governments can do and have to involve development finance institutions and the private sector too.

Due to climate change, coastal communities are now more than ever under threat from flooding and severe storms which threaten their infrastructure and economy

LUX: Is there an issue of a big difference in policy between more progressive governments, such as Canada and the EU, and others with very large economies who are less close to enacting such change?
KS: Absolutely. There are also fossil fuel economies which are in the middle of all of this. One of the issues is that, since the UNFCCC started its work, countries have been – and remain – defined according to their different economic statuses. Yet there are countries which are large emitters now, and countries that historically have had a large carbon footprint. There are also economies that are fossil-fuel driven economies and have contributed to significant fossil fuel emissions, either by themselves or through selling their fossil fuels on the open market. The reality of the challenges that the world now faces is that rather than arguing over who has done what for how long, the focus needs to shift towards how each of these actors can play a role in building and financing resilience and adaptation, and mitigating harm. We have to think beyond the traditional brackets that different countries have been put into, because this is an existential crisis for all of us.

LUX: Do you see authentic intent among enough governments, or are some just talking the talk?
KS: This is part of the challenge. We have seen so many significant climate events this year which you would think would bring people to the table with urgency, focus and determination, but that is not happening across the board. This is where the private sector needs to come in to help move things forward. There has, of course, been push-back in some private sector quarters as well. But the reality is that if we project forward to revenue and growth impacts or profit margins, not just over the next quarter or few years, but to five and ten years down the track, the potential costs of inaction are staggering. These are no longer issues for the next generation, they must be addressed now. We have a choice as humans. The planet will be fine. It is us who are going to be harmed. We choose whether we act now or we delay but, as I said earlier, both cost and risk become exponential the more we delay. We should be focusing all of our attention on acting now.

LUX: Is there a risk that the more we innovate to offset, or capture, the more we have permission to emit?
KS: Absolutely, which is why we have really got to focus on reducing and phasing out fossil fuel emissions as quickly as possible, and we have got to think about the most cost-effective, efficient ways to invest in adaptation and resilience. Let’s shift those investments into sustainable, regenerative renewables, such as wind, solar and tidal power, and let’s focus on investing into nature and helping to build resilient, natural ecosystems which are also the most effective carbon sinks that are on Earth right now. These are incredibly effective both in the functions they fulfill, as well as the costs that they incur.

Karen Sack has previously led global efforts to create a new UN treaty for high seas biodiversity

LUX: Do you think that large-scale, open-ocean carbon-capture – which is currently unregulated, untested but has the potential for enormous scale – should be focused on, or it a diversion?
KS: I think that there will always be untested technologies and potential large-scale solutions, which will be put on the table as a panacea to resolve our issues. There is no harm in asking scientists to explore the viability of some of those mechanisms, to understand the costs, the potential collateral damage and impacts of them before we move forward with them, but thinking that we can chase rainbows or invent unicorns that will solve our problems, while letting everything else fall apart at the seams, does not seem like a sensible solution.

However, there are tried and tested approaches which we know will work. We know that not using fossil fuels is the most critical step that has to be taken to mitigate the impacts of climate change. We know that regenerating and restoring nature is very important for addressing elements of biodiversity as well as the climate crisis. We must work on these two things and build adaptation and resilience – as quickly as possible – by focusing on investing into renewables and investing into nature, and ensuring that government policies and investments from governments and the private sector enable this.

Read more: Jean-Baptiste Jouffray on the future of the world’s oceans 

LUX: What do you fear will happen at COP 28?
KS: There are a lot of initiatives which are being taken forward, and discussions happening, at COP 28. All of them are taking place in the face of significant geopolitical change and challenge. My biggest fear is that the international community does not move far and fast enough and as quickly as possible at this COP, and that the interests of the fossil fuel sector take hold. We cannot go there again. We do not have the time and we certainly do not have the space. We need – as we say in the ocean world – all hands on deck! We must move swiftly. We need action, and we need it now. That is what we need out of this COP: concerted action at speed and at scale.

The 28th Conference of the Parties of the UNFCCC (COP) is set to take place between the 30th November and 12th December 2023

Karen Sack is Executive Director of the Ocean Risk and Resilience Action Alliance

Deutsche Bank was the first bank to join the Ocean Risk and Resilience Alliance

Lower three images by Isabella Fergusson

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