Nearly 200 countries agreed to transition away from fossil fuels at the COP28 climate summit, but how countries actually implement change will ultimately determine how successful the agreement is.
Yahoo Finance Senior Columnist Rick Newman discusses the agreement and how the US may struggle to implement it.
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Video Transcript
SEANA SMITH: COP28 ending on a historic note. Almost 200 countries agreeing for the first time to transition away from fossil fuels in a major move to combat climate change. Now the president of COP28 praising the deal, but stressing that the need for nations to follow through and potentially do more.
SULTAN AL-JABER: This is only as good as its implementation. We are what we do, not what we say. We must take the steps necessary to turn this agreement into tangible actions.
SEANA SMITH: With more on the details of the agreement, we want to bring in Yahoo Finance's Rick Newman. Rick, I think the big question here this morning is how much of this is really a landmark deal, or is it really just a change in the language that we're seeing surrounding the deal?
RICK NEWMAN: Well, there's definitely some breathless reporting out of Dubai because this is the first time the language has said something like "transition away from fossil fuels." I mean-- so it's nice that they can agree to this. And what's supposed to happen now is every country is supposed to come back within a period of time and say, here's how we plan to do this, to transition away from fossil fuels.
That's the difficulty right there. And we're seeing that here in the United States. President Biden has passed, signed into law last year this huge set of incentives for green energy, and some of it is working, and some of it is not working. So, for example, we're seeing a big pullback on the installation of wind plants offshore because they're turning out to be very expensive. Interest rates have gone up. Made them in some cases money-losing projects. And there's a big pullback there.
Electric vehicle adoption seems to be plateauing here even though there are incentives for that. So that that's part of the difficulty. And I would point out that economists and many climate experts say the best way to incentivize a real transition away from fossil fuels is a carbon tax. But we don't have a carbon tax here in the United States. We probably never will because any politician who voted for that would get voted out of office.
So while there is growing awareness of climate change and the need to do something about it, there's also resistance to anything that will raise costs on ordinary consumers here in the United States and also in parts of the world that are sort of like just getting started. The developing world is saying, we're not the ones who put most of that pollution up there. It's the United States and Europe and China and Japan, so we shouldn't have to bear the same burden as everybody else.