COP28: Here are the key developments to watch

• The world is currently on course to sail past those benchmarks, yielding a potentially catastrophic amount of warming of about 3°C (5.4°F) compared to preindustrial levels.

The big picture: On the one hand, renewables like solar and wind are surging in the U.S., Europe and China. On the other, oil and gas companies are showing few signs of cutting production and turning their attention and windfall profits to low-carbon ventures.

• In fact, some companies are seeking to expand their production in the coming years, foreseeing lasting oil and gas demand while banking on new carbon capture technology to neutralize emissions.

What we're watching: A lot. Much of COP28's bandwidth will be taken up by setting up the rules governing the "loss and damage" fund. Broadly, this is a voluntary mechanism used by countries to help developing nations withstand climate impacts.

• Though the fund was agreed to in principle at COP27 in Egypt, negotiators in Dubai have a tougher job: ironing out details like who puts money in and whether funds come as loans, grants or something else.
• There will likely be tense disagreements between developing nations and industrialized countries like the U.S. in determining the fine print.

• The United Arab Emirates' COP presidency intends to leave the event with an operational fund, something many in the climate world view as a stretch.

Zoom in: This COP will conclude the first "Global Stocktake," which is the process through which countries look at where we are in terms of planet-warming emissions compared with where the globe needs to be in order to meet Paris targets.

• The UN's analysis informing this process concluded emissions are far too high to meet the 1.5-degree goal (and likely the 2-degree target as well). More significant emissions cuts need to be made pre-2030 to have a chance of meeting either limit.

This summit is unique because it's the first to be chaired by the CEO of a national oil company, Sultan Ahmed al-Jaber. Additionally, the fossil fuel industry has been invited to participate to a greater extent than any other COP since the gatherings began in 1995.

• How these companies choose to exert their influence will be a test of al-Jaber's strategy of treating the oil and gas industry as part of a solution to human-caused climate change, rather than the problem.
• A new report from the International Energy Agency found that globally, the industry spends about 2.5% of its budget on the energy transition. To meet Paris goals, that needs to skyrocket to 50% by 2030.

The intrigue: Because of his fossil fuel ties, al-Jaber is under an intense microscope. He came under withering criticism early this week when reports emerged, first via the BBC, that he and his staff allegedly pursued oil and gas deals during COP-related meetings with foreign officials.

• "These allegations are false, not true, incorrect, and are not accurate. It is an attempt to undermine the work of the COP28 presidency," al-Jaber said at a COP28 event Wednesday.
• In an interview with Axios in September, al-Jaber said he was committed to weaning away from fossil fuels, but the energy transition needs to be carefully managed.
• "We know that a phase-down of fossil fuel is inevitable," al-Jaber said, emphasizing that no substitute currently exists that could power global energy needs.
• "We should stay laser focused on eliminating emissions from fossil fuel, and we should stay focused on the decarbonization of the whole energy system while we build the new energy system," he said.

Many countries will push for a phaseout plank in a Dubai agreement. Colombia plans to sign on to a push for a fossil fuel nonproliferation treaty, Susana Muhamad, the country's environment minister, told Axios Monday in an interview.

• She said fossil fuel production needs to be reduced as part of a COP28 outcome. Colombia, for its part, has vowed not to pursue new oil and gas leases, despite its status as an oil exporter.
• "We don't have any commitment or any item in the [COP28] agenda to talk about reduction of the frontier of fossil fuels production," Muhamad said.
• The tripling of renewables needs to come at the same time as fossil fuel curbs, the minister added. "If we will continue expanding the oil and gas frontier and at the same time expanding the renewables, what we will be having is a huge production of energy that will not solve the climate crisis, but will create a worse situation," she said.

The past two summits in Glasgow and Sharm el-Sheikh were especially notable for deals struck along the sidelines. That may continue this year, given the attendance of enough world leaders and global financial titans that rival Davos' World Economic Forum.

• Funding announcements aimed at catalyzing the energy transition and helping developing countries withstand climate impacts may be especially significant, depending on the strings attached.
• As the host country, the UAE is likely to play a prominent role in new funding commitments, potentially via its sovereign wealth fund. Funding may focus around turning past pledges into more solid commitments, like methane emissions reductions.
• "We have a global opportunity for wealthier countries, including and especially oil and gas producing countries, such as the host, to deploy some of their sovereign wealth and windfall profits towards actually enhancing an energy transition and a climate transition in the rest of the world," Rajiv Shah, president of the Rockefeller Foundation, told Axios in an interview.

Between the lines: Shah said financing needs are especially acute in some of the poorest countries and emerging economies that haven't been able to secure the financing needed to shift from coal to renewables.

• Ultimately, it is clear that a final agreement text will include commitments to triple the deployment of renewable energy by 2030, while doubling energy efficiency.

Yes, but: The UAE COP presidency is also committed to ensuring the 1.5-degree target remains viable through any agreement. However, a stream of recent reports shows the world must cut emissions by about 40% compared with current policy scenarios to align with Paris benchmarks.

• With global emissions having grown by an estimated 1.2% in 2021-2022, this makes required cuts appear daunting, if not fanciful.