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Bonn UN climate talks fail to advance new finance goal

  • Market: Emissions
  • 13/06/24

Talks at the UN Framework Convention on Climate Change (UNFCCC) in Bonn, Germany, are coming to an end today and parties have little to show for their two weeks of negotiations on climate finance for developing countries.

Progress on agreeing a new climate finance target — to replace a pledge that was missed by developed countries to give $100bn/yr to developing countries by 2020 — was limited and there are still significant divisions among parties, think-tank E3G said today.

Details of the updated target must be finalised during the UN Cop 29 climate summit in Baku, Azerbaijan later this year. But so far negotiators have remained entrenched in their positions on key issues such as how much finance should be provided, who should contribute, who should benefit or qualify as "particularly vulnerable" and the quality of the finance — loans over grants — along with the role of private finance.

Developed countries have not come forward with a number during the negotiations, despite being pressed repeatedly by developing nations to do so. The latter, including Saudi Arabia, India and African nations, are calling for at least $1 trillion-1.3 trillion/yr.

The US said that it supports a goal that is "fit for purpose" and "from a floor of $100bn/yr". The EU and other developed nations argue that certain high-emitting developing countries, such as China or Saudi Arabia, should shoulder some of the finance, thereby broadening the donor base. But China made clear that it has no intention of doing that. "Developing countries voluntarily support each other beyond our capacity and we have no intention to make your numbers look good," the Chinese negotiator said.

Pakistan's delegate rejected developed countries' proposals, which he said were not in line with the Paris Agreement, such as the obligation on developing countries to implement certain domestic measures in exchange for funding.

Australia called parties out on a "game of word-count to measure balance" and said the new target amount should be "the star at the top of the Christmas tree" because "it is dependent on the structure, types of sources, the timeframe and breadth of contributor base".

Meanwhile, Barbados pleaded for parties "to move forward" on the text as otherwise "more Small Island Developing States and Least Developed Countries will simply disappear from this gathering because we disappear from this planet".

Although UNFCCC executive secretary Simon Stiell called for "serious progress" to be made on finance and for parties to move from "zero-draft to real options", these key issues will be left for top negotiators and ministers to tackle in Baku. The US election — which will take place a week before Cop 29 starts — is one of the biggest factors in moving the finance discussions forward, E3G policy adviser Tom Evans said.

Convergence

Consensus does seems to be forming on some issues, such as the need to make access to finance easier to least developed and vulnerable countries, discussing unsustainable debt and the cost of capital, and the need for more transparency — possibly in the context of the Enhanced Transparency Framework (ETF). The framework obliges parties to draw up biennial transparency reports, with the first due at the end of the year.

The "very fundamental divide" between the two blocs on their perceptions around climate finance is underpinned by a lack of trust in the system, senior attorney Erika Lennon from the Center for International Environmental Law said. This is understandable given the time it took developed countries to fulfil their $100bn/yr pledge and the underwhelming performance so far of the different funding programmes, she added.

With neither camp ready to compromise in Bonn, it remains to be seen who will "give", Evans of E3G said.


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12/11/24

Cop: Azerbaijan president criticises ‘petrostate’ label

Cop: Azerbaijan president criticises ‘petrostate’ label

Edinburgh, 12 November (Argus) — Azeri president Ilham Aliyev remonstrated a room packed with world leaders at the UN Cop 29 summit in Baku about calling his country a "petrostate", given its small share of global oil and gas production. He said that it was "not fair" to label Azerbaijan a "petrostate", adding that it might have been "acceptable" when the country produced more than half of global oil output in the 19th century. He said the country accounts for 0.7pc of global oil production and 0.9pc of global gas production today. He also said that Azerbaijan's share of global greenhouse gas emissions is only 0.1pc. Azerbaijan's oil output reached 480,000 b/d in October. "Right after Azerbaijan was elected as a host country of Cop 29 we became a target of co-ordinated, well-orchestrated campaign of slander and blackmail," he said. The Azeri president reiterated that oil and gas is a "gift of god" and that countries rich in natural resources should not be blamed for bringing them to the markets as they are needed. He pointed out again that eight of the 10 countries that are supplied with Azeri gas are in Europe and that the EU asked Azerbaijan to double its gas supply to the bloc by 2027. Natural gas output in Azerbaijan reached a new high of 132mn m³/d in 2023, and the country aims to increase it further. Upping exports to the EU to 20bn m³/yr by 2027, from the current 12bn m³/yr, has been a key government commitment since 2022, when Europe was desperate for alternative gas suppliers. The UAE, Azerbaijan and Brazil — the Cop presidencies Troika — face scrutiny for pushing for increased global climate ambitions, but at the same time seemingly avoiding the question of fossil fuels in relation to their own new climate targets. The Troika countries look at fossil fuels through the lens of their own national circumstances — with their economies being heavily reliant on them. Azerbaijan's increasing gas exports spurred an economic boom, with GDP increasing tenfold over 2003-13. "As a president of Cop 29, I will be a strong advocate for the green transition, but at the same time we must be realistic," he said. He listed green projects in Azerbaijan, either in the pipeline or already operating, including an agreement to be signed at Cop 29 with BP to build a 240MW solar power station. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: UN chief reiterates economic force of transition


12/11/24
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12/11/24

Cop: UN chief reiterates economic force of transition

London, 12 November (Argus) — "Doubling down on fossil fuels is absurd", given that solar and wind power are the cheapest forms of new electricity, UN secretary-general Antonio Guterres told the UN Cop 29 climate summit in Baku, Azerbaijan today. The "economic imperative is clearer and more compelling — with every renewables roll out, every innovation, and every price drop", Guterres added. Global investment in renewables and grids last year overtook the amount spent on fossil fuels for the first time, he noted. "The clean energy revolution is here. No group, no business and no government can stop it," Guterres said. Guterres and Simon Stiell, head of the UNFCCC — the UN's climate body — today both gestured to geopolitical challenges. Cop 29 is focused on climate finance — already a fraught topic — and environmental groups have expressed concern about the impact on climate action of Donald Trump's re-election . The UNFCCC process "is strong, it's robust and it will endure", Stiell said today. Guterres and Stiell also emphasised the financial implications of failing to cut emissions or address climate change. "The climate crisis is fast becoming an economy-killer", Stiell said. "Unless all countries can slash emissions deeply, every country and every household will be hammered even harder than they currently are," he added. The G20 group of countries should lead on emissions reduction, Guterres said. And both he — warning against "a tale of two transitions" — and Stiell called for action on climate finance. Countries must decide at Cop 29 on the next stage of a climate finance goal. Developed countries agreed to deliver $100bn/yr to developing countries over 2020-25, but agreement is yet to be reached on the next iteration. Guterres called for more concessional public finance, higher lending capacity for multilateral development banks (MDBs), greater transparency, and for "tapping innovative sources, particularly levies on shipping, aviation, and fossil fuel extraction. Polluters must pay", he said. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Indonesian energy firms reaffirm net zero efforts


12/11/24
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12/11/24

Cop: Indonesian energy firms reaffirm net zero efforts

Singapore, 12 November (Argus) — Major Indonesian energy firms reaffirmed their commitment to decarbonisation at the UN Cop 29 climate summit in Baku, Azerbaijan, but also indicated the challenges they face in achieving targets. Indonesian state-owned utility PLN is in the process of redesigning its national electricity plan and from now until 2040 needs to add around 102GW of additional capacity, the firm's president director Darmawan Prasodjo said yesterday. Out of this, 75pc is to come from renewable energy, 5GW from nuclear power and 22GW from gas. But there is a mismatch between the location of large-scale renewable energy resources such as geothermal and hydropower plants, and demand centres, said Darmawan. Up to 70,000km of transmission lines have to be built to move energy from those resources to the centre of demand, said Darmawan. Additionally, a smart grid is also necessary to deal with intermittency in variable renewable energy sources such as wind and power. But the price tag to develop these transmission lines and smart grid would amount to a whopping $235bn over 2024-40. State-owned energy firm Pertamina has allocated 8pc of its capital investment towards new and renewable energy over 2025-29, said its chief executive officer John Anis, without disclosing the exact amount. The company also identified targets it hopes to achieve by 2029 as part of its low-carbon business growth, such as 60mn kilolitres of biofuels sales, 1.4GW of geothermal capacity and 1.5mn t of CO2 reductions with carbon capture and storage (CCS). The firm also declared support for the zero routine flaring initiative by the World Bank. "Pertamina is one of the most important oil and gas companies in southeast Asia, producing more than 1mn b/d, and is a key factor for the Indonesian economy," said Demetrios Papathanasiou, global director for the World Bank, emphasising the importance of Pertamina's move to develop oil and gas without gas flaring. Companies need to diversify, divest and decarbonise, said Retina Rosabai, director and group chief financial officer of coal firm Indika Energy. To diversify, firms first need to divest, because funding is limited, she said, adding that Indika has divested from coal-related assets, coal contract mining and coal logistics. But there is still much uncertainty over rules and regulations, although Indonesia's new climate envoy Hashim Djojohadikusumo reaffirmed the country's commitment to climate goals, which will raise confidence, Retina said. Hashim is the brother of Indonesian president Prabowo Subianto, who took office last month. Hashim also reiterated that CCS holds huge potential in Indonesia, with an estimated 500 gigatonnes of CO2 storage capacity. Additionally, the country has also verified 575mn t of CO2 for offtake, with some parties already making commitments to purchase various amounts, he said. The government is also finalising the assessment of a further 600mn t of CO2, which is expected to be offered in the next few months, he said. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Negotiators agree on carbon credit standards


11/11/24
News
11/11/24

Cop: Negotiators agree on carbon credit standards

Washington, 11 November (Argus) — Countries participating in the UN Cop 29 climate summit in Baku, Azerbaijan, have adopted new standards for creating carbon credits under the Paris Agreement. Marking what officials leading the negotiations called "a sign of early momentum" on the first day of the talks, participating countries agreed on standards that will cover credits for greenhouse gas (GHG) emissions removals under Article 6.4 of the Paris Agreement. The new standards set requirements for developing and assessing projects and establish rules covering carbon removal projects. The standards will help developers create and submit methodologies for their projects, to allow them to be registered under the new Paris Agreement Crediting Mechanism, the successor to the Clean Development Mechanism under the Kyoto Protocol. Reaching agreement on the final elements of Article 6.4 and Article 6.2 of the Paris Agreement is one of the top items at the Baku meeting, after countries failed to reach a deal at last year's talks in Dubai. "This will be a game-changing tool to direct resources to the developing world", COP president Mukhtar Babayev said. "Following years of stalemate, the breakthroughs in Baku have now begun. But there is much more to deliver." But the Cop member states still must reach agreement on other aspects of implementing 6.4 and 6.2, which together govern how countries can use carbon credits to meet their GHG emissions-reduction pledges, known as nationally determined contributions (NDCs). Remaining issues cover the nature of credit registries, the guidance for inclusion of removals and a solution for dealing with reporting inconsistencies and credit authorizations. Article 6.2 allows parties to form bilateral agreements for carbon mitigation projects that generate "internationally traded mitigation outcomes" is largely operational. A number of countries have already entered into such agreements. The standards agreed to today were recommended by the Article 6.4 supervisory body, effectively the regulatory of the Paris carbon market, at its meeting in October. The supervisory body said its approach would allow it to review and further improve the standards "when ever necessary" and to "keep up with market developments". Carbon market supporters such as the International Emissions Trading Association had urged countries to back the supervisory body's recommendations. Civil organization Oil Change International criticized Cop members for backing "loose standards for dangerous carbon crediting mechanisms behind closed door". By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: US climate envoy says clean energy trends to stay


11/11/24
News
11/11/24

Cop: US climate envoy says clean energy trends to stay

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