November 22, 2024 | Volume I, Issue 13 | The Fundamental Analytics Carbon Services Team
COP29 Developments
COP29 Negotiators Agree on Global Carbon Market Mechanism
John Ainger, Bloomberg
The push for climate taxes gets real in Baku
Pilita Clark, The Financial Times
Four Takeaways from COP29 Week One
Climate Reality Project
Global GHG Emissions, by Sector
Bruno Venditti, Visual Capitalist
The COP29 climate summit in Baku, Azerbaijan, began with a significant breakthrough on the first day: an agreement on rules for an UN-administered global carbon market. This new market is expected to set the standard for emissions trading and attract billions of dollars in funding for projects aimed at reducing emissions in developing countries. Wealthier countries will be able to achieve their climate targets by purchasing credits from projects that successfully reduce pollution. This agreement, referred to as “Article 6.4,” had been a point of contention for years, making its passage a notable achievement.
However, the summit also highlighted a growing sense of urgency and frustration with the pace of global climate action.
Global greenhouse gas emissions hit a new record of 57.1 gigatons of carbon dioxide equivalent in 2023, a 1.3% increase from 2022. The power sector was the largest contributor to emissions, accounting for 26% of the total, followed by the transport sector at 15%.
These trends underscore the need for a rapid transition away from fossil fuels. The incoming US administration’s anticipated withdrawal from the Paris Agreement casts a shadow over the proceedings, leaving a leadership void that China is poised to fill. This potential shift in geopolitical power dynamics could significantly impact the future of global climate action.
Despite the progress made on the carbon market, several issues continue to hinder progress toward the Paris Agreement’s goals. The host nation, Azerbaijan, faced criticism for agreeing to new gas deals with European partners and for a perceived lack of leadership in driving the transition away from fossil fuels. The summit’s agenda lacked any explicit mention of phasing out fossil fuels, further fueling concerns about the conference’s commitment to addressing the root causes of climate change. Over 1,700 fossil fuel lobbyists were present at the talks, raising questions about the influence of these industries on the negotiations.
Looking ahead, many countries are setting their sights on COP30, which is scheduled to be held in Brazil in 2025. This summit represents a crucial opportunity for nations to submit more ambitious national climate action plans. The UK, for example, pledged to cut fossil fuel emissions by 81% by 2035 compared to 1990 levels, and Brazil announced a new target to reduce emissions by 59-67% by 2035 compared to 2005 levels, largely through efforts to halt deforestation and restore native vegetation. However, securing a new agreement on climate finance, particularly regarding the commitment of wealthy nations to assist vulnerable countries in adapting to climate change and transitioning to clean energy, remains a major challenge. The question of how to bridge the gap between the existing $100 billion annual commitment and the estimated $2.3 trillion needed annually by 2030 in developing countries remains a major point of contention. Proposals for “solidarity levies” on activities like aviation, shipping, and financial transactions have gained traction as a potential source of funding.
Challenges in the Fight Against Climate Change
Zack Colman & Jessie Blaeser, POLITICO
Aaron Clark & Zachary R Mider, Bloomberg
Mega-polluter China believes it is a climate saviour
The Economist
The global fight against climate change is a multifaceted and challenging endeavor, as illustrated by recent efforts such as President Joe Biden’s ambitious climate resilience investment, which has faced delays, undermining its potential impact despite the urgency of addressing climate-induced disasters. At the same time, methane emissions from the fossil fuel industry continue to surge, highlighting the disparity between reported reductions and actual progress. Meanwhile, China, a key player in the green energy sector, navigates both commendation and criticism for its extensive investment in clean technologies amid accusations of insufficient support for global climate initiatives. These examples underscore the intricate balance of economic, political, and environmental factors that complicate global climate action.
With Donald Trump securing victory in the election, the future of President Joe Biden’s historic $33.6 billion investment to protect against climate change-induced disasters is uncertain. This funding, part of the 2021 bipartisan infrastructure law, was intended to harden the electrical grid, prevent wildfires, flood-proof communities, and stabilize water supplies. Despite the urgent need for these projects, nearly three years later, most of the money remains unspent, with only $10.3 billion of the $24.4 billion allocated to 80 federal programs awarded by September.
The slow progress in spending the resilience funds has significant implications, especially with the increasing frequency and severity of climate disasters. The Biden administration’s efforts to expedite the spending are crucial, as the unspent money leaves communities vulnerable to future disasters. The infrastructure law also includes additional funds for drought, dam safety, and ocean programs, but their spending status remains unclear.
Trump’s victory adds another layer of uncertainty to these efforts. He could redefine “resilience,” redirect funds, and halt Biden’s initiatives to support long-neglected communities. The slow pace of spending and the potential political shift highlight the challenges in building national resilience to climate change. Despite the ambitious goals and significant funding, the real-world impact of these efforts remains to be seen.
Meanwhile, world leaders and fossil fuel executives have prioritized tackling methane emissions, with many signing pledges since 2021 to enhance their environmental credentials. Despite claims of progress, including the Oil and Gas Climate Initiative’s assertion of halving emissions since 2017, methane emissions from fossil fuels remain near record levels. Atmospheric methane concentrations have surged, with significant discrepancies between reported emissions and scientific estimates. Methane, a potent greenhouse gas, is seen as a critical target for emission reductions to combat global warming. COP29 in Baku has touched on methane, with Azerbaijan committing to the Global Methane Pledge. However, despite numerous agreements, significant progress in reducing methane pollution remains elusive.