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.

So I think we're just going to go back after this meeting to the same trudge to try to figure out how to actually implement these things.

BRAD SMITH: Rick, also turning our attention to Washington while we have you. We're climate conscious investing is in focus. A House panel subpoenaing the investment firms and communications around ESG funds. It's part of a larger probe into whether ESG investing violates antitrust laws. What can you tell us about that?

RICK NEWMAN: Right. So ESG investing, the ESG stands for Environmental, Social Governance. I mean, the idea is you're supposed to like find these white hat companies, these do-gooder companies and invest in them. I'm not sure in the first place it's a great investing strategy. There are some questions about that. But this is a hobby horse of some of the conservatives in the Republican Party. This is so-called woke capitalism. They're trying to attack woke capitalism. This just seems to pop up every now and then.

I mean, I would point out that the House, which is going to hold these hearings has some important work to do, like if the government funded and do something about aid for Ukraine and Israel, but one of their sort of showboating priorities is to hold these hearings into woke capitalism. Woke up this war and woke capitalism is not going anywhere.

I mean, most Americans don't really react to it one way or the other. They don't really care. But it is just something that some Republicans think they need to hammer. So we're going to get another what I would argue is a fairly pointless hearing on this.

BRAD SMITH: Showboating in Washington, no, Rick, come on now.

RICK NEWMAN: Yes.

BRAD SMITH: Never. Rick, appreciate it.

RICK NEWMAN: Bye, guys.