The United Nations’ COP28 climate conference kicks off Thursday in Dubai, where some 70,000 attendees from nearly 200 countries will arrive for what should be a mass atonement. 

The annual summit is the venue for leaders from nearly every country in the world to decide by consensus how to address the climate crisis. 

Top of the conference agenda is the first “global stocktake”—a report card showing countries’ progress towards the commitments they made in the 2015 Paris Agreement, including limiting global warming to 1.5 C. However, a landmark UN report published in September already showed the world is off track, leaving world leaders in Dubai to reconcile with their shortcomings. 

Those attending the conference will contend with the tensions between their climate ambitions and the fact that many governments—including Canada’s—are grappling with mounting debt and affordability crises at home. The absence of Prime Minister Justin Trudeau, for a second consecutive year, and U.S. President Joe Biden, may suggest where the climate crisis ranks relative to other issues. 

“It’s going to be much harder,” said Ryan Riordan, director of research at the Institute for Sustainable Finance at Queen’s University. “Interest rates aren’t zero anymore, inflation is still relatively high,” he said. “There’s less fiscal room for most countries.” 

That’s not to say the climate crisis can take a back seat, said Caroline Brouillette, executive director at Climate Action Network Canada. “We’re in a moment of poly-crisis,” she said. “The question is whether leaders put forward solutions that do more than one thing at a time.”

As negotiations begin, here are the themes expected to dominate the conference: 

Phasing out fossil fuels: There has been intense debate at the last two COP conferences over how aggressively countries should transition away from oil, gas and coal. Last year in Egypt, a group of oil producers, including Canada and Saudi Arabia, blocked an effort calling for a “phase-down” of fossil fuels. Some of those countries favour carbon-capture technology to curb emissions from dirty energy sources. 

Observers doubt countries will agree to more ambitious language at COP28 around ending fossil fuel use. Carbon capture proponents are expected to be well represented at the conference, said Mark Cameron, vice-president of external relations at Pathways Alliance, a lobby group representing a group of six major Canadian oil producers. Cameron told The Logic his priority in Dubai is promoting carbon-capture technology, which is central to oil sands companies’ net-zero commitments. The COP president himself, Sultan Ahmed Al Jaber, who serves as CEO of oil giant Abu Dhabi National Oil Company, is expected to favour carbon capture over fossil fuel phase-out. 

Many countries are off track on fossil fuel reduction targets as it is. Canada is among a group of heavy-emitting countries that are on pace to increase their oil and gas production between 2021 and 2030, according to a recent UN report. And global fossil fuel subsidies spiked US$2 trillion to US$7 trillion last year, as governments sought to control soaring prices.

“I think there’s going to be a push from a lot of countries for [phase-out], but I don’t think we’re going to see that,” said Riordan. 

For its part, Canada is pressing peers to commit specifically to phasing out coal power at COP, which Riordan said is an easier lift than banishing fossil fuels altogether. “There are just fewer jurisdictions that rely on coal,” he said, “and coal is considerably worse for the environment than refined fossil fuels, so it’s a real easy business case.” Environment Minister Steven Guilbeault, who’s leading Canada’s delegation, is also expected to push for more ambitious methane-reduction commitments. 

Climate finance: Rick Smith, president of the Canadian Climate Institute, a climate policy think tank, is eager to see countries commit to tripling their renewable energy projects and doubling their energy efficiency at COP, in line with recent recommendations from the International Energy Agency. Doing that will require trillions of dollars. Bloomberg’s energy research division estimated the energy transition will cost US$200 trillion by 2050, while McKinsey pegged it at US$275 trillion. 

“The question of climate finance is so central across agenda items at this COP,” said Brouillette.  

One priority at COP will be to create financing models that incentivize private investors to provide capital alongside public funders for climate projects. Earlier this week, BlackRock, the world’s largest asset manager, proposed a US$4-trillion plan that would have multilateral development banks, such as the World Bank, backstop climate-related projects in emerging markets. 

Last year’s COP ended with an agreement to create a “loss and damage” fund to help vulnerable countries rebuild following climate disasters. In Dubai, countries are expected to decide where the fund’s money will come from and how funds will be distributed. 

This year could also mark the long-delayed delivery of a US$100-billion annual climate fund for developing countries. Canada and Germany were in charge of wrangling the money from other developed countries by 2020 to fund climate mitigation and adaptation in vulnerable regions. By now, developing countries may actually need closer to US$1 trillion a year, according to a report the Egyption and British governments commissioned at COP27. 

Carbon credit markets: While the Paris Agreement established a voluntary market for countries to collect and trade credits for reducing CO2 emissions, in Dubai, governments could solidify details of the global trading system, run by the United Nations. 

That includes deciding how credits can be issued—for example, whether they are only applicable in scenarios where companies or governments reduce emissions but not when they avoid emitting carbon in the first place. Whether forest conservation merits carbon credits is also up for negotiation. 

Countries are also looking at how their trade agreements can help curb emissions, beyond the credit-trading market. Last month, the European Union introduced a carbon border adjustments program, which will impose duties on emissions-intensive imports from countries with no or lower carbon prices. Canada and the EU have agreed to cross-border carbon pricing. 

As daunting as the COP28 agenda may be, Smith said he’s still hopeful for a good outcome. “We are seeing an acceleration of climate progress like we couldn’t even have imagined a few years ago,” Smith said, citing the rapid growth in renewable energy in recent years. “The paradox of climate change in 2023 is that the damage from climate change has never been more obvious, but the progress has never been more significant.”