The daily commute on Dubai’s metro during this year’s UN climate summit (COP28) offers a strange juxtaposition. There is the expected picture for a climate conference: e-car ads, promotions of renewable energy providers, and well-positioned wind turbines. But travel a few stops further into the desert towards the venue at Expo City and the oil refineries on the horizon are unmistakable.

Even so, as a “first order of business”, a breakthrough agreement was reached on the opening day to operationalise a fund to address the loss and damage in developing countries caused by climate change. Agreement on the fund was actually the historic milestone reached last year at COP27, and much like the earlier Green Climate Fund (GCF), the loss and damage fund will provide a crucial mechanism for global climate solidarity between rich and developing nations.

More than $700 million has been pledged so far from several rich countries. While this is a welcome start, it may only be enough to get the loss and damage fund up and running. Indeed, existing pledges represent less than 0.2% of the current estimated annual need of up to $400 billion required to address both the economic and non-economic losses faced by developing countries. There is also legitimate concern that the money for loss and damage will be drawn from existing pools allocated to other critical areas, such as adaptation and development, rather than securing “new and additional” commitments.

Moreover, the need to address loss and damage will only increase if emissions are not quickly and dramatically reduced. Adaptation actions also need to be implemented. But progress on these fronts at the negotiations remains highly uncertain, although it’s not unusual for tangible progress to only materialise in the closing days.

So far, there have been plenty of voluntary and non-binding pledges from countries to elevate ambition on emissions reductions. This includes tripling renewable energy capacity by 2030, ending publicly financed fossil fuel aid projects, as well as a range of new commitments towards climate finance. The United States has pledged $3 billion for the GCF. Australia recently decided to rejoin the GCF, though with a “modest” amount, and is expected to make an announcement soon.

The key test for this year’s summit is whether the final agreement text will ultimately reflect the increase in climate ambition required.

Negotiators are yet again tip-toeing around the wording regarding the phasing out of fossil fuels, despite more than 100 countries having already supported a phase-out, including the United States. The International Energy Agency’s (IEA) most recent assessment says that a complete phase-out by mid-century is essential – implying no new fossil fuel developments from here on – to be able to adhere to a global average temperature increase of no more than 1.5 degrees Celsius.

The IEA also affirms that mature, tried and tested, and in most cases cost-effective renewable energy technologies, such as wind or solar power, are available to achieve the net-zero target by 2050. What is required now is political will.

The current wording from the negotiations in Glasgow in 2021, to merely “accelerate efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies”, was not strengthened at the last summit in Egypt. Unfortunately, the sense on the ground here is that the Dubai summit risks yielding a similar result, or perhaps language that is so watered down and vague that it causes more harm than good.

To get a sense, options in the current negotiating text include: “substantially scaling up globally by 2030 zero and low-emission technologies”, “an orderly and just phase out of fossil fuels” or “phasing out inefficient fossil fuel subsidies over the medium term”.

Also on the table is “scaling up of low-emission technologies including … carbon capture”, despite it remaining an expensive and unproven techno-fix.

It is likely to remain the sticking point until the close of this year’s COP.

Meanwhile, negotiations on a framework to achieve the adaptation goal enshrined in the 2015 Paris Agreement seem to have come to a standstill. Whether any associated financing commitments will emerge to help developing countries remains the sticking point.

Although the summit has been going for a week now, ministers are only expected to arrive in time for the second half of the negotiations, aiming to reach agreement by midday on Tuesday next week.

One fear is that with the loss and damage fund already agreed to meet a key demand of developing countries, the negotiations might simply be brought to a close without meaningful progress on mitigation or adaptation. Should that happen, it would reflect a complacency that the world, especially the most vulnerable people in developing countries, cannot afford. There is still time to hopefully produce a better outcome.

This article was first published by the Lowy Institute’s blogsite, The Interpreter. Dr Melanie Pill is a Research Fellow at the Lowy Institute. She oversees and progresses the climate change portfolio of the Institute’s Indo-Pacific Development Centre. Georgia Hammersley is a Research Associate in the Lowy Institute’s Indo-Pacific Development Centre. Her research interests include international climate policy and finance.