COP28: Health Day

As the conference gets underway, McKinsey Sustainability recaps the news and announcements leaders need to know.

December 3, 2023Today marks the first ever Health Day in a COP program, underscoring a growing recognition of the intersection between climate change and human health. Research from the Intergovernmental Panel on Climate Change (IPCC) shows that up to 3.6 billion people already live in contexts that are highly vulnerable to climate change. The same report shows that between 2030 and 2050, climate change is expected to cause approximately 250,000 additional deaths per year, including from undernutrition, malaria, and heat stress.

Adaptation to climate change is increasingly becoming critical in discussions on health—especially given the health effects of climate change are likely to be felt more severely in emerging economies. Pressure on health systems is rapidly growing, with 27 percent of surveyed cities in a Lancet report declaring concerns that their health systems might be overwhelmed by climate change impacts.

Healthcare value chains are estimated to account for around 5 percent of global carbon emissions, and a recent report by Unitaid found that a critical action for the sector is to better measure and reduce emissions from drug manufacturing and use.

News and announcements:

In the first action of its kind at a COP, 123 countries signed the UAE Climate and Health Declaration to “place health at the heart of climate action” and support the development of climate-resilient, sustainable, and equitable health systems. The declaration demonstrates widespread recognition of the centrality of health in the climate agenda, and includes commitments to act, including through the systematic inclusion of health in National Adaptation Plans (NAPs) and Nationally Determined Contributions (NDCs). The active participation of health ministers, alongside environment and finance ministers, in climate policy is seen as providing a platform for continued acceleration of action on health at future COPs. This also encourages organizations to consider health as a key part of their own adaptation planning.

$1 billion in new financing commitments for climate and health were announced by philanthropies, donors, and multilateral development bank (MDBs). This will have a catalytic effect on the pace of action in the field, which now receives less than 0.5 percent of multilateral climate finance, scaling the implementation of solutions to climate-sensitive diseases and health risks from extreme events. Over time, this could lead to the climate-proofing of MDB health portfolios worth tens of billions of dollars—creating opportunities for solution providers, innovators, and investors. Furthermore, these funders and partners have endorsed nine new guiding principles for financing climate and health solutions—addressing concerns related to health- or climate-“washing”.

74 countries and 40 international organizations endorsed the UAE Declaration on Climate, Relief, Recovery and Peace, committing to increasing investment in communities affected by conflict—which are three times more likely to face extreme weather and receive up to 80 times less climate finance.

Another adaptation and inclusion linked development today was the showcasing of the COP28 & SME Climate Hub for MENA, which McKinsey supports. Only around 8% of SMEs globally have a Net Zero 2050 target, and this new Arabic platform for the region aims to support SME’s climate action. It includes resources and tools to help SMEs make a net-zero commitment, calculate their emissions baseline, and measure their progress toward emissions reduction. Given SMEs are estimated to make up over 90 percent of all businesses globally, and the COP28 outreach campaign has already touched 25,000+ SMEs in MENA, is there potential for this type of SME-focused initiative to scale globally at future COPs?

McKinsey at COP28: Insights from our events

McKinsey events have covered transition finance, adaptation, and ensuring an inclusive transition. Here are some questions our events addressed:

How do we bridge the climate financing gap to get to net zero? In COP28’s Blue Zone at the Singapore pavilion, McKinsey’s Cindy Levy spoke about green transition finance at an event led by Singapore senior minister and coordinating minister for national security, Mr Teo Chee Hean, and Ravi Menon, managing director of the Monetary Authority of Singapore.

When it comes to climate finance globally, we need to deploy $55 trillion in a decade to get to net zero by 2030. Of the $41 trillion gap, roughly 43 percent is in Asia.
Progress in closing this this gap is challenged by uneven investment burdens. The United States and many European countries need only 3 percent of GDP per annum, while some Asian nations need 15 percent. As a panel, we discussed how transition instruments could help accelerate the transition.
Mr Teo Chee Hean announced the launch of a transition instrument with the goal of helping to phase out coal plants earlier than their planned retirement, with no financial cost to the coal owners. Other Singapore announcements include a new blended finance vehicle and a Singapore-Asian taxonomy.
The Monetary Authority of Singapore, with McKinsey, recently launched a working paper on accelerating the early retirement of coal-fired power plants through carbon credits.

How can stakeholders drive adaptation and an inclusive transition? McKinsey’s Mekala Krishnan and Kartik Jayaram moderated McKinsey conversations about this critical question with leaders across sectors at COP28.

We don’t yet have a common definition for an inclusive transition. The first thing we need to do is create a framework that allows us to measure the transition at multiple levels of granularity, from governments to communities globally.
Adaptation must go hand in hand with mitigation—starting now. “We're not looking at something that is way out,” one panelist said. “It's actually already in our current reality.” Another panelist pointed to the opportunity to create new insurance products, and others pointed to the role that new technologies can play.
There is a need for significant financial innovation, whether in terms of adaptation funds, debt-donation swaps, or other mechanisms that get money directly into community hands. There was also a discussion about accelerating the dispersion of money from existing innovations like Just Energy Transition Partnerships (JETPs).
Partnerships between governments, corporations, and communities are critically important, and we need to come up with solutions that allow this transition to happen in a way that supports communities.

Key questions for leaders:

How might climate change create health hazards for workers and stakeholders (such as rising heat stress or illness related to changing infection patterns)? What could I do to mitigate the risk?
What is my organization’s adaptation plan? How can I ensure health is adequately addressed?
How do I account for the “differentiated impact” of climate mitigation and adaptation efforts – where some groups, such as people of a particular gender, race or religion, are significantly more affected than other groups – in order to advance an inclusive transition?
How can my organization scale up solutions to support decarbonization across healthcare value chains, in line with the new commitments to act?
How can we work across public, private, and social sectors to build a decarbonized and climate-resilient healthcare sector?