Reflections on COP28

Insights — December 2023

COP pledges to triple renewable energy output by 2030, while maintaining policy headwinds for conventional emissions intensive energy


In early December 2023, approximately 85,000 delegates representing nearly 200 countries attended COP28 (the 28th United Nations Climate Change Conference) in Dubai, United Arab Emirates.

These conferences play a key role in shaping global policy in relation to emissions intensive industries, the adoption of clean energy and the response to climate change. They bring together governments, experts and other stakeholders (from industry and civil society) to develop policy, negotiate collective agreements and review progress of prior commitments. The output forms the basis for the action plans, policies and laws of individual countries. Each conference therefore provides a valuable insight into what to expect in terms of policy, globally over the short to medium term.

Key observations

We believe the official releases following COP28 clearly indicate that the contrasting policy backdrop (tailwinds for clean energy and headwinds for conventional emissions intensive energy) remains firmly in place.

At a time when the global economy is slowing and some are calling for wind and solar to be abandoned in favour of conventional forms of energy such as coal, oil and gas, the clear message emanating from COP indicate that these calls are not being adopted by the world’s top policymakers.

It is also a reminder that the cyclical forces facing clean energy are temporary and that there is no change to the outlook for growth within related industries and their supply chains. This stands to have a handsome benefit right across our portfolio from critical raw materials to consumer products.

While COP28 was not groundbreaking, it provided a valuable insight into what to expect in terms of policy, globally over the short to medium term. The next COP, COP29 will be held in Baku, Azerbaijan in November 2024.

Expectations prior to the conference

While many were sceptical about the conference being held in an ‘oil state’ and the presidency being held by the Chief Executive of the United Arab Emirates’s national oil company (ADNOC), the final communique formally recognised the necessity to transition away from fossil fuels for the first time in 30 years of UN climate negotiations.

This said, the conference did not result in groundbreaking new commitments or changes in direction on key issues.

Overall objective

The conference was framed around providing the first global ‘stocktake’ on commitments made in the ‘Paris Agreement’ (which was signed in at COP21 in 2015).

While the final communique reinforced the Paris Agreement’s commitment to limit global warming to 1.5°C (which consensus believes is looking stretched on the basis that it requires a 43% emissions cut by 2030 and 60% by 2035, relative to 2019 levels), it effectively kicked the can down the road on hard conversations until 2025 when countries submit updated commitments. All else equal, we believe it implies major increases to country targets are required in order to limit global warming to 1.5°C.

Acceleration of growth for solar and wind

While telegraphed via several pre-COP meetings, the big headline from the conference were the goals to:

  • Triple renewable energy output by 2030;
  • Double the energy efficiency improvement rate by 2023; and
  • Triple global nuclear capacity by 2030.

Tripling renewable energy requires an acceleration to present growth rates for the solar and wind industries, as well as energy storage. This is a counter point to the recent perception that growth in these industries is faltering.


The inclusion of nuclear, while not surprising, was significant because it was included as a potential part of the solution to a net zero energy system for the first time. This has contributed to the recent mania on everything nuclear and uranium which we do not believe is based on sound economics.

While we have always believed that nuclear has significant potential in the future energy mix, the key issue we grapple with is economics. The key issues we observe are:

  1. the extremely high and increasing capital cost to install new capacity; and
  2. the ability to sell sufficient volumes of electricity at an economic price over the 50-year life of the assets.

The key issue (and uncertainty) in relation to the latter is the presence of solar electricity generation (and to a lesser extent wind) in the grid which crowds out other generators and tends to compress daytime electricity prices to a level which means nuclear generators will not be able to generate a minimum return on capital.

The continued, clearly observable improvement in solar technology will only magnify this issue on a five-to-10-year view.

To see a genuine nuclear renaissance, we believe a step change in nuclear technology is required and so far, we haven’t identified any technology which could achieve this on a five-to-10-year view.

Headwinds for conventional emissions intensive energy

The COP28 statement also included commitments on fossil fuels and emissions intensive energy infrastructure which amount to increasing headwinds. These included:

  • Accelerating efforts towards the phase-down of unabated coal power;
  • Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science;
  • Accelerating the reduction of road transport emissions, including via the rapid deployment of zero- and low-emission vehicles;
  • Recognising that transitional fuels can play a role in facilitating the energy transition while ensuring energy security; and
  • Phasing out inefficient fossil fuel subsidies that do not address energy poverty or just transitions, as soon as possible.