The Conference of the Parties (COP) is an annual meeting where UN member states convene to make a plan for climate action. COP28—which took place in 2023 in the United Arab Emirates—included a discussion of the first-ever global stocktake, a comprehensive assessment of progress since the 2015 Paris Agreement. The global stocktake is a two-year process scheduled to happen every five years. The first global stocktake got under way in 2022 and concluded at COP28; the next stocktake will occur in 2028 and again in 2033, etcetera. The objective is to coordinate efforts on climate action, including measures to bridge the gaps in progress.
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Cindy Levy is a senior partner in McKinsey’s London office; Daniel Pacthod is a senior partner in the New York office; Gassan Al-Kibsi is a senior partner in the Riyadh office, where Tarek El Sayed is a senior partner and Joe Saade and Paola Matta are consultants; and Rory Sullivan is an associate partner in the Dubai office.
The findings from the global stocktake indicate that the global community is not on track to achieve the goals set out in the Paris Agreement. The highest-level goal is to keep global warming under 2°C while pursuing efforts to stay within 1.5°C.
In this Explainer, we’ll look at recommendations from the global stocktake, examine the outcomes of COP28, and describe what it would take to achieve the Paris goals.
Learn more about McKinsey’s program at COP.
What is COP?
COP has convened nations annually since 1995 under the banner of the United Nations to collaboratively address climate change. Every member state has equal voting power, and unanimous approval is needed for any COP agreement. Among the most significant COP milestones are the Kyoto Protocol in 1997 and the Paris Agreement in 2015; in the latter, the member states agreed to aim to limit the increase in average global temperature, ideally to 1.5°C. Central to the Paris Agreement was the commitment of each nation to track and report on its environmental efforts and to assess and report on overall progress every five years with a global stocktake. The next meeting, COP29, will kick off in November 2024 in Baku, Azerbaijan.
Read more about COP and the Paris Agreement.
How does the global stocktake recommend proceeding toward Paris goals?
The global stocktake report outlines four areas in which progress is necessary to keep global temperatures within a 2°C range of preindustrial averages. Here are the areas, along with the concrete actions recommended by the global stocktake.
Mitigation: Bending the curve by 2025
The report highlights the need to reduce greenhouse-gas emissions by 43, 60, and 84 percent from 2019 levels by 2030, 2035, and 2050, respectively, to limit global warming to 1.5°C. To achieve these targets, the global stocktake recommends the following actions:
- Scale up renewables and reduce fossil fuel reliance. Changes to our energy systems could account for up to 74 percent of the global greenhouse-gas-mitigation requirement.
- Reduce emissions across industry and transport. To achieve net zero, industries need to intensify energy efficiency, promote electrification, and manage demand more effectively.
- Preserve forests and address non-CO2 emissions. Agriculture, forestry, and other land uses were responsible for 22 percent of global greenhouse-gas emissions in 2019. About half of these emissions are attributable to deforestation.
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Adaptation: Responding to the adverse effects of climate change
The global stocktake emphasizes the need for more deliberate and actionable strategies in adaptation, including the following:
- Support local communities in developing regions. Global warming exacerbates global inequalities. Decisions on climate action should be made in close collaboration with local communities, with special effort directed toward inclusiveness and technological deployment.
- Promote transparent adaptation reports. The stocktake highlights that only 60 parties have submitted adaptation communications and encourages policy makers to develop clearer methodologies with regular updates to demonstrate progress.
Finance: Funding mitigation and adaptation, especially in developing nations
An estimated $5.9 trillion in climate financing is required by 2050 for developing countries to achieve their climate goals. The global stocktake identified a substantial gap in meeting this need. To close the gap, the stocktake recommends that stakeholders consider the following actions:
- Increase the mobilization of support for climate action in developing countries. While developed countries have mobilized $83.3 billion toward this goal, this amount falls short of the collective annual goal of $100 billion. Public funds alone are not projected to bridge this gap. The global stocktake highlights the need to attract financing from the private sector.
- Reconcile global financial flows with climate goals. From 2019 to 2020, $892 billion was globally invested in fossil fuels, and another $450 billion was spent as subsidies. In comparison, $803 billion went toward climate finance, covering around 30 percent of the annual investment required to limit global-temperature rises. The global stocktake recommends a course correction by reconciling international financial institutions to the challenges of climate change and exploring innovative financial instruments like debt-for-climate swaps and emissions pricing.
Cooperation and knowledge transfer
Not all countries have set the same climate targets or have the same capacity to achieve them. The global stocktake report recommends the following improvements:
- Standardize evaluations of each country’s commitment, which currently lack uniform benchmarks for assessing fairness and ambition.
- Strengthen capacity building across all climate-action spheres. Capacity-building programs can be developed via a combination of local and international partnerships, including universities, research organizations, nongovernmental organizations, and the private sector.
- Deploy existing cleaner technologies to support developing countries’ climate plans.
What happens now?
The first-ever global stocktake, released in October 2023, found that the world is not on track to achieve the goals set out in Paris. At COP28, UN member states negotiated a response to the stocktake’s findings. These were some of the outcomes:
- A clear vision of what comes next. McKinsey senior partner Cindy Levy noted that this COP resulted in a truly shared vision of what needs to happen: “The language of this COP has been about achieving 1.5°C and how we can keep that in reach. I believe this shared aspiration will endure and will ensure we can close the ambition gap, finance gap, and adaptation gap.”
- Financing climate technology start-ups is key. To limit warming to 1.5°C, proven technologies need to scale exponentially by 2030. Yet only 10 percent of venture capital funds go to climate tech—in the Middle East and North Africa, it’s only 5 percent.
- COP must be more than a forum for announcements. Big announcements are only relevant if they are accompanied by accountability. And collaboration, facilitated by COP, can help ensure that commitments become reality.
- Cross-industry collaboration is critical for success. The current siloed approach won’t achieve the goal of 1.5°C.
The global stocktake emphasizes the urgency of action to mitigate global warming. It’s clear that the time is now for international cooperation, equitable climate action, and sustainable transformation across all sectors.
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This article was updated in August 2024; it was originally published in October 2023.
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