Governments have agreed to map out ways to make progress on creating a fossil-fuel-free trade system at the first global diplomatic forum to assess how nations can transition away from coal, oil and gas.
Almost 60 countries – representing around one third of global GDP – met in Santa Marta, Colombia, earlier this week with the aim of accelerating previously agreed goals, particularly those made under the Paris Agreement.
Under the new plans, the OECD and other experts will explore “ways to connect fossil fuel producers and consumers, that supports the decarbonisation of trade balances, advancing progress toward a fossil-fuel–free trade system”, according to a statement released by the co-host nations, Colombia and the Netherlands.
Participants also discussed “reviewing and improving international investment agreements, alignment of trade rules, as well as clarification of the legitimacy of transition policies within investment regimes”, the summary said.
Widely dubbed a ‘coalition of the willing’, the conference was deliberately held in addition to the UN climate Cops, which abide by consensus rules, to avoid resistance from nations over references to a transition.
The final text produced following Cop30, held last December, crucially failed to refer to the transition away from fossil fuels.
Notably, big emitters such as China, the US, Russia, Saudi Arabia and India were absent from the Santa Marta conference.
The meeting’s outputs are however expected to inform a wider roadmap on transitioning away from fossil fuels, which is currently being developed by the Brazilian Cop30 presidency.
Leo Roberts, associate director, energy transition, at climate change think tank E3G, said: “Cops are often characterised by a unique form of high-tension, hardline consensus-based negotiation, which is essential to collective climate action, but is not the most effective format to get deep into country aspirations, plans and concerns around a topic as complex as phasing out fossil fuels.
“It was clear from ministers and senior diplomats that they see this space [the Santa Marta conference] as an essential bridge between the complexity and context-specificity of their domestic national planning processes, and the Cops themselves.”
The focus on trade was one of three workstreams established, alongside a focus on country roadmaps for the energy transition and ways to unlock finance and investment for the transition, including debt constraints.
“It was clear that many countries cannot transition without expanding fiscal space, lowering the cost of capital, and ensuring that financial stability considerations are aligned with transition needs,” the conference organisers said.
At 2024’s ‘finance’ Cop, wealthy countries pledged to increase climate finance provided to developing nations from US$100bn to US$300bn a year by 2035.
The conference also discussed the investor-state dispute settlement (ISDS) system, which is viewed by some as a barrier to moving away from fossil fuels.
Intended to avoid interstate disputes and give foreign investors protection in politically risky countries, the ISDS arbitration system is embedded in international investment agreements and enables states to be sued if they take actions that affect investments.
The International Institute for Sustainable Development (IISD) said the conference had “recognised ISDS as a significant structural barrier to climate progress” and put “removing access to ISDS for fossil fuel investors” on the agenda.
Lukas Schaugg, policy advisor at the IISD, added: “Santa Marta has put ISDS on the table in a way no previous climate summits have done.
“The next test is whether a coalition of willing countries can move from recognition to action, starting where the political and legal case is strongest.”
The second conference will be held in Tuvalu, which will co-host alongside Ireland.
