SINGAPORE - The United Nations on Friday will release what amounts to its review of global efforts to tackle climate change. Called the Global Stocktake, it is the result of two years of assessing how far off course we are in reducing the risks from climate change. It will also offer suggestions on positive steps to tackle the problem.

“It’s a moment to take a long, hard look at the state of our planet and chart a better course for the future,” said the UN Framework Convention on Climate Change (UNFCCC), which is overseeing the assessment.

This guidance will be crucial for governments as they meet to discuss how to ramp up global climate action at the UN’s COP28 climate conference in Dubai at the end of the year. The stocktake is a vital part of COP28.

Here is a look at the stocktake and why it matters.

What is the Global Stocktake?

It is a periodic assessment of global climate action and is mandated under the 2015 UN Paris climate agreement.

This is the first Global Stocktake since the Paris pact was adopted and is a key part in the agreement’s design in which nations progressively ratchet up the ambition of their national climate plans every five years.

The stocktake is meant to inform nations on how ambitious their updated climate plans should be. It is also meant to guide nations in stepping up financial support for climate action and international cooperation.

Under the Paris Agreement, the next round of updated national climate plans, (known as “nationally determined contributions” or NDCs) is due in 2025.

Conducting the Global Stocktake every five years is meant to ensure that countries and companies are increasingly ambitious with their actions to keep the Paris Agreement’s goals in reach.

What is the process?

Under the Paris Agreement, the key goals include cutting greenhouse gas emissions to limit temperature rise to well below 2 deg C and ideally aim for 1.5 deg C; building resilience to climate impacts; and aligning financial support with the scale and scope needed to tackle the climate crisis.

During the past two years, the UNFCCC has worked with the UN’s climate science body, the Intergovernmental Panel on Climate Change (IPCC), to craft the assessment using the latest scientific findings. Input has also come from other UN agencies, governments, international bodies such as the International Energy Agency and non-government organisations.

With the release of the draft on Friday, a political process begins in which governments will then consider the findings, which have been refined after a series of technical reviews.

The draft is expected to reveal just how far off the world is from achieving the goals of the Paris Agreement and provide concrete guidance on actions – including opportunities – needed to close these gaps, according to the World Resources Institute (WRI), a Washington-based think tank.

Apart from cutting emissions, the assessment will also measure progress in countries’ abilities to enhance their resilience and reduce vulnerability to climate impacts.

And it will look at what is called “means of implementation”, that is, steps to accelerate climate action, such as finance for poorer nations, technology transfer and support to developing nations to address the climate crisis.

How far off course are we?

The world has already warmed on average 1.2 deg C above pre-industrial levels and could breach 1.5 deg C in less than a decade based on current emissions, mainly from burning fossil fuels.

According to the IPCC, global greenhouse gas emissions must peak before 2025 at the latest and decline 43 per cent by 2030. But there is no sign of this happening and the world is facing increasing risks of more extreme heatwaves, wildfires, floods and hotter oceans, which are damaging coral reefs and fisheries.

What do investors say?

“The first global stocktake is consequential. Not only are we comprehensively evaluating our progress since the Paris Agreement, we will also have a good grasp of the gaps that we need to urgently close,” said Mr Frederick Teo, chief executive of GenZero, an investment platform company owned by Temasek.

Countries are developing the policies and infrastructure needed to support efforts to tackle greenhouse gas emissions. “This is seen through more ambitious carbon pricing and other emissions-focused regulations,” he added.

But more needs to be done, and Mr Teo said there are growing risks from failing to act, including the impact from accelerated climate change and the long-term well-being of people and communities.

“Doing nothing (or not doing enough) will be more costly in the longer-run,” he said, especially for future generations.

“Governments have a difficult challenge; they need to balance the pressing and urgent demands of the present with the needs of the future. True leadership is needed to convince people to take the difficult near-term decisions so that future generations can prosper and thrive,” Mr Teo added.

What will happen at COP28?

The final political phase of the stocktake will take place at COP28 at the end of 2023.

According to WRI, this phase will determine how countries respond politically to the gaps and opportunities, such as accelerating green energy investment.

At COP28, to be held from Nov 30 until Dec 12, delegates will discuss the stocktake’s findings. Countries will collectively produce a summary of key political messages, which can then be included in COP28’s final decision text.

The wording of the messages is key because it will determine the scope and ambition of each nation’s future climate actions and financial support.

There are risks, WRI said in a recent blog post.

“It is imperative for countries to fully leverage the stocktake’s political phase to maximise its impact and avoid drawing vague conclusions.”

Otherwise, it risks becoming just another information-sharing exercise.