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8 OPINION 7.12.2023 Facing the challenges in COP28 George Mangion George Mangion is a senior partner at PKF, an audit and consultancy firm, and has over 25 years' experience in accounting, taxation, financial and consultancy services. His efforts have made PKF instrumental in establishing many companies in Malta and established PKF as a leading professional financial service provider on the Island FOR COP28, this is the first time there will be a global effort since the Paris Agreement mechanism to collectively review each nations' greenhouse gas emissions so as to measure progress toward meeting set goals. Head of States want to encourage their nations to ramp up their climate change mit- igation actions and their respective Nationally Determined Contributions (NDCs). Carbon pricing and an annual emis- sions cap must ensure that polluters pay, and that Member States generate revenues which can be invested in the green transition. e revised EU emis- sions trading system gradually extends carbon pricing to new sectors of the economy to support their emissions reductions, in particular transport, aviation, heating fuels, and shipping. e conclusions of the exercise could have implications for both internation- al and domestic climate change-fo- cused legal frameworks. So last week, we witnessed the gathering of World leaders in Dubai for the next round of climate talks . is began with a pledge to set up a US$30 billion private investment fund focused on climate change in vulnera- ble countries and building a "loss and damage" fund. Key themes included emissions mitigation targets, phase out fossil fuel, financing from devel- oped nations, focus on industry-led solutions, low-carbon innovation, dif- ferences between developed and devel- oping nations. With 80,000 attendees, including 23,500 government representatives and 27,208 policy experts, academics and senior company executives, the COP28 is the United Nations' larg- est-ever climate summit. So how will all this effect tiny Malta? e prime minister at the UN podium said that Malta's goal remains that of being cli- mate neutral by 2050. In view of limit- ed resources and burgeoning national debt, one can honestly praise the island for its sustained efforts. Robert Abela exclaimed stoical- ly Malta was "punching far above its weight". Although, Malta is a laggard among other EU countries in renew- able energy generation, this can be explained because of its set policy to produce electricity via burning of fossil fuel, yet the penny dropped (albeit late) that there is immense offshore poten- tial for the Green energy. is could have been exploited years ago but the main trust of the ex-prime minister Joseph Muscat was to assist a private company Electrogas to set up an LNG electricity generating facility supplied by a floating vessel. In this way, an electoral promise to reduce tariffs could be honoured. Accord- ing to Robert Abela, the sitting prime minister, he reiterates in Dubai how his government is actively considering the establishment of extensive offshore wind or solar farms. In the COP28 event, global leaders in Dubai pledged to establish a $30 billion private investment fund targeted to ad- dress climate change initiatives in vul- nerable nations, alongside a fund ad- dressing "loss and damage" concerns. Next to speak at COP28 following Robert Abel's contribution is Miriam Dalli, energy and environment minis- ter. She said that despite being one of the smallest countries, Malta's com- mitment is strong. It hopes to exceed climate goals, aiming for a 55% reduc- tion in pollution by 2030 compared to 1990.Another important topic is the fear of rising sea water levels due to cli- mate change. Dalli also reiterated that Malta has been urging the international commu- nity to tackle the impacts of sea level rise on small island states. e energy minister warned that for small island states, the risk of sea lev- el rise is real. e IPPC's special re- port on the Ocean and Cryosphere in a Changing Climate speaks loud and clear about the alarming prospect of accelerating rise in sea levels over re- cent years. It even indicates a possible sea level gradual rise of two metres over this century. Malta is the 10th smallest state in the world and being an archipelago, such fears augment our sensitivity to this shocking reality. For a relatively small island with villages located a few centi- metres above sea level, this can lead to partial or complete submersion. Plac- es like Sliema, Gzira, Msida and Marsa are particularly vulnerable. e displacement of entire villages will inevitably happen yet with this re- form, Member States will now spend 100% of their emissions trading rev- enues on climate and energy-related projects and the social dimension of the transition. e newly-created Social Climate Fund will dedicate 65 billion euros from the EU budget, and about 86 billion eu- ros to support the most vulnerable citi- zens particularly SMEs against the del- eterious effect of this Green transition. e new Carbon Border Adjustment Mechanism will ensure that imported products on transshipment vessels will also pay a carbon price at the border in the sectors covered. Malta and other transshipment ports have protested that feeder vessels from Asia entering the Mediterranean may choose to unload in non-EU African ports to save on the carbon tax. Envi- ronmentalists on the other hand hail this measure as a valuable rule for pro- moting global emissions reductions and help leveraging the EU market to pursue global climate goals. In combination with the EU Emis- sions Trading System, this reduces the risk of 'carbon leakage', whereby ship- ping companies may have to save costs, move their production out of Europe to countries with less strict environ- mental standards. e agreement on the revised Renewable Energy Direc- tive sets the EU's binding renewable energy target. Another topic is how to augment in- vestment in clean energy. e revised CO2 standards will ensure that all new cars and vans registered in Europe will be zero-emission by 2035. e new Regulation for the deployment of alter- native fuels infrastructure (AFIR) sets mandatory deployment targets for en- hanced electric charging facilities and more hydrogen refuelling stations. In this way, ideally the publicly ac- cessible recharging infrastructure for construction machinery and heavy ve- hicles grows at the same speed as that engineered for the electric vehicle fleet. All this poses a challenge for Malta and the rest of Europe - what is the future of fossil fuels? Head of States attending COP28, discussed divergent priorities, including the question of whether fossil fuels should be "phased down" or "phased out". Whatever the answer to that question, it will surely impact the implementation of the Paris Agreement. One thing stands out clear - it looks clear that if the world does not triple renewable capacity by 2030, it will be highly unlikely that we reach the goal of limiting global warming to 1.5°C. Prime minister Robert Abela addressing the COP28 conference