COP 28 outcomes and ASI’s approach to addressing Climate Change challenges
The COP 28 climate talks in Dubai (December 2023) ended with a decision by Parties to transition away from “fossil fuels”, the first time such a formal outcome has appeared since negotiations began three decades ago. As a standards-setting and certification body for aluminium producing and consuming Entities with a multi-stakeholder approach and, importantly, a broad sustainability perspective, ASI is part of the conversation.
15 January 2024
A Just Transition from Fossil Fuels
The headline decision at COP 28 was the UAE Consensus for the world to “transition 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.” Short-term, radical decarbonisation of energy (for aluminium dominated by power), longer-term decarbonisation of other emissions sources, the transition sensitive to local situations, other consequences, seen and unforeseen (with respect to labour, environmental impacts, land use and conflict, social implications).
The aluminium sectors emissions are dominated by the consumption (and generation) of fossil fuelled power and the accelerated shift to renewable sources is a key part of the soon-to-be published 1.5 degree pathways method – the means by which certifying ASI Entities will be expected to set emissions reduction targets. With the ASI Board having adopted this method in 2023, from May 2024 all ASI Performance Standard Audits will seek evidence of the use of this method in defining emissions reduction pathways, but not only producers of aluminium, also downstream and industrial user Entities. They will need to source aluminium in line with such slopes.
As the UAE Consensus notes, the long term trajectory is the achievement of net zero and ASI’s method, using IAI sectoral 1.5 degree pathways, broadly aligned with the IEA Net Zero Emissions Scenario (NZE), articulates what this means for every Entity along the value chain, with quantitative targets for aluminium production, procurement and transformation. Publication of the ASI method is expected by the end of January 2024, with formal incorporation into ASI Performance Standard Guidance in Q2 2024.
Reference to a just and equitable transition is also important and resonates with the work of ASI. Certification against the ASI Performance Standard requires conformance against a suite of ESG criteria, cutting across a wide range of issues including business integrity; transparency; material stewardship; emissions, effluents and waste; water; biodiversity and ecosystem services; human rights; Free, Prior & Informed Consent (FPIC); labour rights and health and safety management. Action to reduce emissions is important (as reflected in its status as one of our four strategic goals), but it does not stand in isolation. Systems to manage other environmental, social and governance risk also need to be implemented by Entities, with transparency and public disclosure of impacts, and remedy given where required. In fact, the move to decarbonise the industry can itself have consequences for communities and ecosystems, which will need to be monitored and managed appropriately, exemplified by ASI’s Indigenous Peoples Advisory Forum’s recent and ongoing work with Norway’s Protect Sápmi Foundation on Indigenous-led participatory and cumulative impact assessment (IPCIA), now being rolled out to other regions of the world.
New energy systems will mean new jobs and skills requirements and the loss of traditional employment, including the possibility of large scale movement of industry between communities – ASI’s labour oriented criteria are important in helping to protect workers’ rights during this seismic technological, demographic and economic shift.
Nationally Determined Contributions (NDCs)
An NDC, or Nationally Determined Contribution, is a climate action plan to cut emissions and adapt to climate impacts. Each Party to the Paris Agreement is required to establish an NDC and update it every five years.
Countries are expected to submit new NDCs ahead of COP30 in 2025, to update their 2030 targets and present new targets for 2035. These new NDCs must be more ambitious, the Intergovernmental Panel on Climate Change (IPCC) determining that limiting warming to 1.5 degrees C requires reducing global greenhouse gas emissions 60% below 2019 levels by 2035.
The next round of NDCs should include plans and priorities for adaptation, just transition efforts, and loss and damage. The outcome also states that NDCs should reflect transformation across multiple sectors, including clean energy, nature conservation, road transport and more.
ASI’s 1.5 degree aligned pathways method will be a key tool for the aluminium sector to demonstrate to governments, among other stakeholders, how it can play its part in contributing to NDCs in the jurisdictions within which it operates.
Global Goal on Adaptation
After two years of discussions, negotiators agreed at COP 28 to global time-bound targets for specific adaptation themes and sectors (such as water and health).
While criteria specific to adaptation to a changing climate are not articulated in the latest version of the Performance Standard, the subject does form part of ASI’s strategy and is reflected in recent partnerships, projects and, in particular, the work of IPAF with local communities, which are exposed to the most acute wellbeing risks of a warming planet.
Nature-positive frameworks are also important and form part of ASI’s strategy, enmeshed with local and indigenous communities, the custodians of land and the services derived from such spaces.
ASI recognises that functioning ecosystems are the context for all life human wellbeing and socio-economic development. It is not enough to do what we have been doing for the last two decades, with a bit more efficiency. Nor is it enough to expect that small changes to a small subset of the sector will bring about the scale or speed of change required.
The challenge for the aluminium sector (indeed for all sectors and the whole of humanity) is systemic change that not only delivers against climate goals, but also actively renews ecosystems, while improving equity of access to services by a growing global population. It is a challenge that is only possible with wholescale (whole value chain) action against articulated plans, with defined targets and harmonised methods of accounting, that can be interrogated through public disclosure which incorporates broad sustainable development goals. ASI is ready to help drive that action.
Climate Financing Deferred
A new climate finance goal, the New Collective Qualitative Goal (NCQG) is slated for COP 29 and while the Dubai negotiations did not move forward significantly (or to the extent of other outcomes), financial sector interest in ASI (and other sustainability standards schemes) is among the fastest growing of stakeholder engagement.
Global, economy-wide net zero by 2050 will require trillions of dollars in capital investment. Aluminium, as a material that will be in increasing demand to deliver an energy, resource efficiency and behavioural transition, is high on the list of investment needs. ASI is engaging with this sector within a number of fora (including significant input to the Sustainable Aluminum Finance Framework, launched at COP 28 and as observers to the International Capital Market Association (ICMA)), to ensure that the harmonized approaches and 1.5oC aligned pathways are embedded in the rules under which capital is invested but also to champion the broad suite of sustainability issues that ASI has built into its standards.
Loss and Damage – the linkage with remedy
One of the first announcements from Dubai was the establishment of a new fund to address the loss and damage vulnerable countries face from climate impacts. ASI recognises that the impacts of a warming planet are not shared equally – there is an injustice in the burden of climate related health and wellbeing being shouldered by communities that are lesser contributors to the global accumulation of atmospheric greenhouse gases.
International recognition of the need for remedy echoes ASI’s commitment to processes that uphold human rights in the aluminium value chain, an ongoing area of work that cuts across all ASI working groups and its Indigenous Peoples Advisory Forum.
Land Use & Land Use Change
The Joint Statement on Climate, Nature and People recognized that the growing and projected impacts of climate change critically threaten biodiversity and the billions of livelihoods dependant on high-integrity ecosystems, echoing ASI’s cross-cutting approach and multi-pronged strategy. Land use emissions from the aluminium sector are relatively poorly understood (the sector’s inventory being dominated by energy-related and point source emissions). In 2024, ASI will work on refinement of sectoral land use change emissions models, for eventual incorporation (where material) into the 1.5 degree pathway method – which itself will be subject to change as the science and emissions data matures.
Carbon Markets
COP 28 did not adopt any decision on rules for carbon markets. ASI’s 1.5 degree aligned method is a mitigation approach – compensation, including offsets, do not form part of the targets Entities will need to set in order to conform with Criterion 5.3 of the Performance Standard. Having said that, companies should be exploring and implementing compensation approaches, in addition to their mitigation efforts – if climate and nature positive goals are to be met, both approaches will be required starting from today.
Action
On the UNFCCC website you will find 54,699 published documents; 865 decisions archived, since that first COP in 1995. There has been a lot of talking.
As a standards-setting and certification body for aluminium producing and consuming Entities with a multi-stakeholder approach and, importantly, a broad sustainability perspective, ASI is part of the conversation. But the time for conversation is now behind us and we all need to do more: now we must take action.
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