International Climate Negotiations: Do They Really Matter? 

Hello, and welcome to the sixth HEC Reskill Masterclass. Today we receive Igor Shishlov, lecturer at HEC Paris in Climate Change Economics. Igor is also the head of Climate Finance at Perspectives, a consultancy and advisory group, and he has been researching and advising on climate policy for over a decade.

Igor is particularly well placed to discuss with you the importance of international climate negotiations. As you know, we are only one week away from the 28th Conference of the Parties, COP 28 in Dubai, and the world is on fire. The question he'll discuss for the next 20 minutes is: do such negotiations really matter?

We will welcome your questions on this LinkedIn Live, where you can start sending us your queries in the comments section.

Hello and welcome everybody to this session on International Climate Negotiations. I remember very well my first COP that I attended more than 10 years ago in Doha in 2012. I was quite surprised and overwhelmed by the sheer size and magnitude of the event.

International climate negotiations have evolved considerably over the past 30 years, from meetings of country negotiators to something that looks like a huge trade show with tens of thousands of people. COP negotiations attract a lot of attention and criticism. Despite 30 years of negotiations, emissions keep going up, fossil fuel demand is at its highest levels in human history, and temperatures are breaking records every month. This year is going to be the hottest on record, linked to extreme weather events—wildfires, floods, droughts—that affect people's lives all over the world. As the UN Secretary-General, Antonio Guterres, said, humanity opened the gates of hell. Have we achieved anything over the past 30 years? Do international climate negotiations really matter?

Before we answer this, let's look at the results of the poll we launched before the event. The majority of respondents think climate negotiations do matter but that they are not enough. I will take a shot at answering the question.

To answer, let's take a journey in time and space with our time machine, tracking the evolution of the international climate regime over the past 30 years and arriving at COP 28 in Dubai to understand what we can realistically expect.

First, why do we need a multilateral response to climate change? Climate change is a global public goods issue. The atmosphere is a global public good, and every ton of CO2 emitted contributes to global warming. Unilateral action by one country or a group of countries is not enough unless everyone participates.

Another factor is globalized competition and carbon leakage. If a country implements stringent climate policies, carbon-intensive industries may move overseas, or leakage may occur through trade. This is why the European Union is introducing the Carbon Border Adjustment.

Equity is also crucial. Countries most responsible historically for climate change are not those who suffer the most. International negotiations give voice to those particularly affected.

Let's travel to 1992, Rio de Janeiro, Earth Summit. The first milestone of international climate negotiations was the adoption of the United Nations Framework Convention on Climate Change (UNFCCC). Its objective is to stabilize greenhouse gas concentrations to prevent dangerous interference with the climate system. The UNFCCC did not set concrete targets but established a framework, rules, and key principles for future negotiations.

The COP process revolves around annual meetings. Decisions are adopted by consensus, which is difficult with nearly 200 countries with different interests, energy systems, and political systems.

Three UNFCCC principles are particularly important:

The precautionary principle: uncertainty in climate science should not preclude action.

The principle of common but differentiated responsibility: some countries bear greater historical responsibility and must act faster and more decisively.

The right to economic development: no agreement should preclude a country from pursuing its development goals.

In 1997, Kyoto, Japan: the first agreement with concrete emission reduction targets, the Kyoto Protocol, aimed to reduce emissions by 5% for industrialized countries compared to 1990. It used a cap and trade system to maximize efficiency. Countries could buy and sell emission allowances.

Did it work? Objectives were achieved, but questions remain. Domestic policies, the global financial crisis, and other factors contributed. The market eventually collapsed due to excess allowances ("hot air") and non-participation by the US and Canada. However, Kyoto induced domestic policies, such as the European Emissions Trading Scheme, and improved transparency and trust through monitoring, verification, and reporting (MRV). Coverage was small, about 10% of global emissions.

Copenhagen 2009: a new agreement including all countries failed. Developed countries did not show leadership; emerging economies refused quantitative targets. The global north-south divide caused loss of trust. Positive outcome: commitment by developed countries to provide $100 billion annually in climate finance by 2020.

Paris Agreement 2015: first treaty with concrete temperature objectives. Limit warming to well below 2°C, pursue 1.5°C, and reach net zero emissions in the second half of the 21st century. Three pillars: mitigation, adaptation, and finance.

Paris shifted from a top-down to a bottom-up approach. Countries define their own climate strategies through nationally determined contributions (NDCs), revised every five years. Initial NDCs are insufficient for 2°C or 1.5°C targets, but the ratchet mechanism requires increasing ambition. Industrialized countries have quantified targets; developing countries move toward absolute targets. A global stocktake every five years measures progress.

COP 28: first global stocktake. Technical reports indicate that if unconditional NDCs are implemented, warming reaches 2.9°C; if conditional elements are included, 2.5°C; if all net zero pledges are implemented, 2°C. Progress has been made: before Paris, warming was projected at 3.5°C or more.

COP 28 discussions: global stocktake, climate finance, adaptation, loss and damage. The $100 billion climate finance target was not fully met; discussions on a new target will advance. The loss and damage fund modalities must be finalized.

Realistic expectations: a strong COP decision on ambition raising, agreement on loss and damage funding, progress on climate finance targets. Side discussions: renewable energy, energy efficiency, phasing out fossil fuels. Negotiations on language (phase out vs. phase down) will be heated.

Climate negotiations matter, but emissions are reduced domestically through policies and private sector action. Hard work begins after the COP.

Daniel: your time machine took us to 1992, Rio. Was it the first international climate event?

Igor: Not the first, but groundbreaking for bringing climate change to the top of the international political agenda. Climate science dates back to 1859 (John Tyle). By the 1960s-70s, basics were settled. Ironically, early climate science was done by oil and gas companies, e.g., ExxonMobil’s 1970s models were precise but suppressed publicly.

Question from Mexico: COP 28 is in a major oil-producing country; president is CEO of Abu Dhabi National Oil Company. Conflict of interest?

Igor: The location rotates. UAE is advanced in renewable energy. The controversy is more about the COP presidency and fossil fuel influence. Fossil fuel companies invest only ~2% in renewables.

Question from Beirut: side deals at COP?

Igor: Side deals are smaller commitments among groups of countries or sectors. Examples: COP 26 commitment to phase out international public finance for fossil fuels by 2022, signed by 40 countries. Private and financial sector actors also participate, e.g., Glasgow Financial Alliance for Net Zero. Implementation is crucial.

Question from France: prospects of open and collaborative innovation practices?

Igor: Innovation is central to the energy transition. Policies enabled renewable energy cost reductions, e.g., feed-in tariffs in Germany and China. Future technologies (green hydrogen, energy storage) require public-private collaboration.

Question from Latvia: challenges and opportunities for climate finance at COP 28?

Igor: $100 billion target unmet; OECD estimates ~83 billion. True value may be 25-30 billion when counting only concessional finance. Multi-crisis context makes mobilization harder. Loss and damage fund requires innovative instruments.

Daniel: Thank you, Igor. Looking forward to your return from Dubai and future masterclasses.