The cost of the climate transition is in the trillions, not billions. (UBS)

The UN Framework for Convention on Climate Change (UNFCCC) secretariat has released the first-ever global stocktake synthesis report, which will be discussed formally at COP28. In short, the stocktake found that the Paris Agreement has driven near-universe climate action; however, “much more is needed now on all fronts”. We look at the main areas of analysis in summary below:

Mitigation: Mind the gap

While all countries have submitted NDCs (their plans to reduce GHG emissions), the gap between implied emission reductions and actual needed reduction in 2030 is 12.5–16 GtCO2, implying that current commitments are far from sufficiently ambitious to achieve the 2-degree Celsius (2C) target.

Unfortunately, emissions have not peaked so far, and according to the World Meteorological Organization, the CO2 emissions from industrial activity have continued to rise at a similar rate as in the previous decade. In 2022, the atmospheric concentration of GHG gases was 50% higher than the pre-industrial era, hitting a new record.

At last year’s COP27 meeting in Egypt, countries agreed to re-submit NDCs to align with the 2C goal. As of 6 November, according to the Climate Tracker, only 38 countries have resubmitted of which five have a stronger target, and 23 were submitted for the first time.

Beyond the ambition gap, there is an implementation gap as well, according to the stocktake report, where adopted polices fall short of pledges.

Adaptation: Increased ambition

Adaption is a focus of the COP28 presidency, and all in all is a less controversial topic as climate impact becomes visible. From an EM perspective, adaptation becomes an increasingly urgent point and is tied to the financing relationship between EMs and DMs as well.

The stocktake report found a collective increase in the ambition of adaptation plans globally. In fact, the efforts of developing countries toward adaptation are recognized in particular. The report finds that efforts need to increase ambition, however, and increase transparent reporting on ongoing efforts. Most crucially, the report finds that adaptation-related financing needs to rapidly scale up.


Financing continues to be a red-thread running through the analysis of the global stocktake, with a specific chapter dedicated to how finance flows are needed for implementation and adaptation. The report notes the increase in funding from developed to developing countries from USD 30bn in 2015 to USD 40.1bn per year on average during 2019–2020. In 2020, developed countries mobilized USD 83.3bn, a significant increase but still short of the agreed USD 100bn annual commitment.

The cost of the climate transition is in the trillions, not billions, however. The costs of 78 developing country NDCs amount to just under USD 6tr per year, and this is not counting developed countries, or all anticipated adaptation costs globally. While the challenge may seem significant, it also implies a need for investors to simultaneously identify the investment opportunities, while preparing their portfolios for the risks of a slower-than expected transition.

Main contributors - Stephanie Choi, Amanda Gu, Amantia Muhedini

See the full Sustainable InSights report: The COP28 issue , 24 November, 2023.