UN Cop 29
Overview
Argus provides key insights into the developments and discussions at Cop. We shine a light on how they will affect the global energy and commodity markets.
Decisions made at Cop meetings have far-reaching effects on the markets we serve. Almost 200 countries agreed on "transitioning away from fossil fuels in energy systems" and tripling renewable power capacity at the UN Cop 28 summit in Dubai last year.
Progress at the next two meetings will be crucial in transforming ambitions into actions aligned with the Paris Agreement. Countries must get new plans ready for 2025.
This year, Cop 29 will focus on climate finance. It will cover funding energy transition in developing countries, and increasing private sector involvement and sectorial investment. Article 6 and voluntary carbon markets discussions will also take centre stage.
Follow the key developments in energy transition field with our Net zero page and keep up to date with ongoing coverage of these issues by following Argus Media on LinkedIn and on X.
News
Cop: Developing nations reject first finance offer
Cop: Developing nations reject first finance offer
Baku, 22 November (Argus) — Developing countries at the UN Cop 29 climate summit in Baku, Azerbaijan have rejected the first climate finance amount put forward by developed nations, and are mulling counter-offers. A revised draft text for a new climate finance goal was released earlier today. Parties are negotiating the next iteration of the $100bn/yr that developed countries agreed to deliver to developing nations over 2020-25 — known as the new collective quantified goal (NCQG). The new text stated that developed nations should contribute $250bn/yr by 2035 in climate finance for developing countries. This is up from the previous $100bn/yr that developed countries agreed to deliver over 2020-25, but still a fraction of the 1.3 trillion/yr that developing countries have been calling for. "The [$250bn/yr] offered by developed countries is a spit on the face of vulnerable nations like mine," said Panama's representative Juan Carlos Monterrey Gomez. "They offer crumbs while we bear the dead," he said, adding that the amount offered is "outrageous, evil and remorseless." There is still "a lot to fight for," said a delegate from Honduras, as others suggested that major edits to the text are likely. The negotiating block the Alliance of Small Island States (Aosis) pointed out that the text ignores minimum allocation floors for small island developing states (Sids) and least developed countries (LDCs) of at least $39bn/yr and $220bn/yr, as proposed at the start of the summit. The LDCs also complained that "rich" members of the group of 77 (G77) — a UN coalition of developing nations —insisted on no carve-outs for the poorer and most vulnerable countries, according to a Somalian delegate. The proposed $250bn/yr will severely stagnate climate action efforts and does not raise the bar from the previous ineffective $100bn/yr goal, the Aosis group said. "We cannot be expected to agree to a text which shows such contempt for our vulnerable people." Counter-offer A UN-mandated finance expert group indicated that the figure put forward by developing countries "is too low" and not consistent with the goals of the Paris Agreement. The group's analysis shows that the new finance goal for developing countries, based on the components that it covers, should commit developed countries to provide at least $300bn/yr by 2030, and $390bn/yr by 2035. "We believe that these targets are feasible," the group said. Brazil indicated that the country is now pushing for these targets. The final amount for the new finance goal could potentially be around $300bn-350bn/yr, a Somalian delegate told Argus. Developed nations, in contrast, offered more muted responses. "It has been a significant lift over the past decade to meet the prior goal [of $100bn/yr]," said a senior US official, and the new goal will require even more ambition and "extraordinary reach." A delegate from Norway told Argus that the text is "something to work on" and that they were "happier than yesterday." "We should leave Baku with a goal that at least gets to $300bn/yr by 2035," said climate think-tank WRI's finance programme director Melanie Robinson. "This is achievable with projected finance, further reforms and shareholder support at multilateral banks, and some growth in bilateral funding," she said. By Prethika Nair and Rhys Talbot Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: Decision on 2026 host unlikely in Baku
Cop: Decision on 2026 host unlikely in Baku
Washington, 22 November (Argus) — A decision on which country will host the UN Cop 31 climate talks in 2026 may not come until next year, as Australia and Turkey vie to be the next host. Draft decision text released on Friday at Cop 29 in Baku, Azerbaijan, would punt the decision and call on western European and other States to accelerate their consultations" and be prepared to present an offer to host in June 2025. Australia formally bid in 2022 to host Cop 31 and had little competition other than Turkey, which has refused to back down. Pushing the decision to next year would shorten the amount of time the eventual host has to prepare. But Azerbaijan won its hosting duties [only last year] at Cop 28 in Dubai. Brazil, the host of Cop 30, had its bid accepted in May 2023 . Under the UN Framework Convention on Climate Change (UNFCCC), Turkey is part of a grouping of western European countries, while Australia is in a group of "other states" that also includes Canada, Iceland, New Zealand, Norway, Switzerland and the US. The Australian delegation in Baku did not immediately respond to a request for comment. The draft text said that Cop 32 will be held in an African country from 8-19 November 2027. By Michael Ball Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: Drafts point to trade-off on finance, fossil fuels
Cop: Drafts point to trade-off on finance, fossil fuels
Baku, 22 November (Argus) — The new draft on the climate finance goal from the UN Cop 29 climate summit presidency has developed nations contributing $250bn/yr by 2035, while language on fossil fuels has been dropped, indicating work towards a compromise on these two central issues. There is no mention of fossil fuels in either the new draft text on the global stocktake — which follows up the outcome of Cop 28 last year, including "transitioning away" from fossil fuels — or in the new draft for the climate finance goal. Developed countries wanted a reference to moving away from fossil fuels included, indicating that not having one would be a red line. The new draft text on the climate finance goal would mark a substantial compromise for developing countries, with non-profit WRI noting that this is "the bridging text". Parties are negotiating the next iteration of the $100bn/yr that developed countries agreed to deliver to developing nations over 2020-25 — known as the new collective quantified goal (NCQG). The new draft sets out a figure of $250bn/yr by 2035, "from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources". It also notes that developed countries will "take the lead". It sets out that the finance could come from multilateral development banks (MDBs) too. "It has been a significant lift over the past decade to meet the prior, smaller goal... $250bn will require even more ambition and extraordinary reach," a US official said. "This goal will need to be supported by ambitious bilateral action, MDB contributions and efforts to better mobilise private finance, among other critical factors," the official added. India had indicated earlier this week that the country was seeking around $600bn/yr for a public finance layer from developed countries. Developing countries had been asking for $1.3 trillion/yr in climate finance from developed countries, a sum which the new text instead calls for "all actors" to work toward. The draft text acknowledges the need to "enable the scaling up of financing… from all public and private sources" to that figure. On the contributor base — which developed countries have long pushed to expand — the text indicates that climate finance contributions from developing countries could supplement the finance goal. It is unclear how this language will land with developing nations. China yesterday reiterated that "the voluntary support" of the global south is not part of the goal. The global stocktake draft largely focuses on the initiatives set out by the Cop 29 presidency, on enhancing power grids and energy storage, though it does stress the "urgent need for accelerated implementation of domestic mitigation measures". It dropped a previous option, opposed by Saudi Arabia, that mentioned actions aimed at "transitioning away from fossil fuels". Mitigation, or cutting emissions, and climate finance have been the overriding issues at Cop 29. Developing countries have long said they cannot decarbonise or implement an energy transition without adequate finance. Developed countries are calling for substantially stronger global action on emissions reduction. By Georgia Gratton and Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cop: Singapore, Peru finalise carbon credit negotiation
Cop: Singapore, Peru finalise carbon credit negotiation
Baku, 22 November (Argus) — Singapore and Peru have concluded negotiations on an implementation agreement for carbon credit co-operation aligned with Article 6 of the Paris Agreement, at the UN Cop 29 climate summit in Baku, Azerbaijan. The countries "substantively concluded negotiations" on 21 November, said Singapore's ministry of trade and industry. The collaboration is aimed at unlocking additional mitigation activities and scaling solutions to advance both countries' climate ambitions. Under the implementation agreement, a framework for the generation and international transfer of Article 6-compliant carbon credits will be established. The framework will include criteria and procedures for transfer between both countries. Negotiators in Baku appear close to a final agreement on Article 6 , which aims to help set rules on global carbon trade. Article 6.2 already allows countries' governments to form bilateral agreements for carbon mitigation projects, the outcomes of which can be traded to contribute towards climate pledges. Mitigation refers to efforts to reduce greenhouse gas emissions causing global warming. "When the agreement is signed, we look forward to the private sector utilising this agreement to develop carbon credits projects to actualise concrete environmental outcomes," said Singapore's minister for sustainability and environment Grace Fu. The minister is also one of the facilitators, alongside New Zealand, for negotiations on Article 6. Singapore also signed an implementation agreement with Zambia on 19 November at the summit. It has multiple carbon credit deals with other countries, but has only signed implementation agreements with Zambia, Ghana and Papua New Guinea so far. Singapore's National Climate Change Secretariat and the world's largest independent carbon credit registries Verra and Gold Standard last week released initial recommendations outlining the development of a carbon crediting protocol to implement Article 6.2. The recommendations are aimed at helping countries to use Article 6 to achieve their UN climate pledges and sustainable development goals, and provides recommendations on how governments can facilitate an effective Article 6.2 market. If such a framework is not established, "countries could take divergent approaches, which could hinder the implementation, scaling and integrity of co-operation under Article 6.2," said Verra. The protocol will be further developed and published once Cop 29 is concluded, said Verra. It will incorporate decisions from Cop 29 and will be implemented in 2025. By Prethika Nair Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Analysis and explainers
Cop party profiles
Lula, Biden reach new energy transition deal
Lula, Biden reach new energy transition deal
Rio de Janeiro, 19 November (Argus) — The US and Brazil have sealed a new partnership to advance the energy transition, despite looming uncertainty over the future of US climate policies under the incoming Donald Trump administration. The partnership was announced following a meeting today between US President Joe Biden and Brazil's Luiz Inacio Lula da Silva on the sidelines of the G20 summit in Rio de Janeiro. Energy transition was one of Brazil's three goals for its G20 presidency, which it handed over to South Africa today. The two countries have agreed to focus on three pillars, the US embassy in Brazil said, as they pursue the dual objective of fostering economic growth and job creation while meeting climate targets like emissions reduction and keeping average global temperatures from rising by more than 1.5°C. These pillars are the acceleration and expansion of clean energy production and deployment, the development of the clean energy supply chain and green industrialization. The partnership intends to mobilize financing from public, private and multilateral development institutions to pursue the decarbonization of the power, transportation, industrial and manufacturing sectors in both countries. This joint effort between the US and Brazil is aligned with their domestic policies, the embassy noted, notably Brazil's new industrial policy and the US' bipartisan infrastructure law and the 2022 Inflation Reduction Act. A commitment to fighting climate change and developing the green economy is a key aspect of Lula and Biden's shared agenda. But both this cooperation and the future of Biden-era clean energy incentives are in question following Trump's victory in the US election. Trump has tapped oil executive and energy transition critic Chris Wright to lead the US Department of Energy (DOE). By Constance Malleret Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
UK ramps up climate action under new leadership
UK ramps up climate action under new leadership
London, 28 October (Argus) — The UK's Labour government, elected in July, has taken the country's climate policy in a new direction, restoring pledges the previous administration scrapped and seeking to funnel investment to renewables. The UN Cop 29 climate summit presents an opportunity for it to follow this up on an international stage. Hosting Cop 26 in 2021 allowed the UK to burnish its climate leadership credentials, but subsequent changes in the Conservative government saw policy reversals. Labour sought to differentiate its position on climate during the election campaign — possibly noting an increase in support for the UK's Green and Liberal Democrat parties, both of which hold firm pro-environment stances. Labour promised to issue no new oil, gas or coal licences — although it said it would not revoke existing permits — and is aiming for zero-emissions power by 2030. Energy minister Ed Miliband in his first week in office lifted the de facto ban on onshore wind, and set up a taskforce to speed the country's path to a decarbonised power grid. The UK has in recent weeks pulled in around £24bn ($31bn) of investment for renewables, including from utilities Orsted and Iberdrola, and announced "up to" £21.7bn in funding over 25 years for carbon capture, use and storage (CCUS) — although it is unclear how the money will be deployed. The government moved swiftly to raise the windfall tax on oil and gas profits, lifting it to an effective rate of 78pc and scrapping one of the investment allowances — although the decarbonisation investment allowance remains in place. And, spurred by a landmark ruling made by the UK's Supreme Court in June, the government pledged new environmental guidance for oil and gas fields by spring 2025. The judgment ruled that consent for an oil development was unlawful, as the Scope 3 emissions — those from burning the oil produced — were not considered. The government has in the meantime halted assessment of any environmental statements for oil and gas extraction, including those already being processed, until the new guidance is in place. The Labour government has declined to defend in court decisions taken by various iterations of the Conservative administration, including the permission granted for a proposed coal mine in northwest England. The High Court quashed that planning permission in September. International stage Miliband has sought guidance from independent advisory the Climate Change Committee (CCC) on the country's new climate plan, known as a nationally determined contribution (NDC). The CCC assessed the previous government as off track to hit legally binding emissions-reduction targets. The UK has cut emissions by half since 1990 and is in line with all carbon budgets to date. But much of this progress was made from a baseline of a high rate of coal-fired power generation, all of which is now shut down. The next stage of the country's decarbonisation will be more fragmented and is likely to pose more of a challenge. The UK has bucked the trend set by some European neighbours by shifting further left with Labour, although the new government has promoted fiscal caution. Climate finance will dominate the talks in Azerbaijan, and the UK has been clear it will continue to contribute. Labour pledged in its manifesto to "return to the forefront of climate action", noting that the previous administration had "squandered [the UK's] climate leadership". Foreign minister David Lammy has embedded climate and nature issues into his foreign policy brief and the government has appointed special representatives for climate and nature. But Cop 29 will prove the first real test of the pledges made, with a global audience watching. UK greenhouse gas emissions Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Southeast Asia's coal phase-out faces slow progress
Southeast Asia's coal phase-out faces slow progress
Singapore, 22 October (Argus) — Southeast Asia remains heavily reliant on coal to meet its energy needs, and although some countries have embarked on initiatives to phase out coal-fired power, they will have to overcome considerable obstacles. Coal is still projected to be the region's second-largest source of energy by 2030 after oil, according to the Asean Centre for Energy's 8th Asean Energy Outlook , released last month. The IEA expects southeast Asia's power demand to rise by 5pc/yr through 2026, with most of that additional demand to be met by fossil fuels. It sees coal's share of the regional power mix edging down in the coming year, but absolute coal-fired generation rising by 4pc/yr through 2025. Regional coal dependency rose to 33pc in 2023 from 31pc in 2022, according to energy think-tank Ember. Coal's share of the mix in Indonesia hit a record 61.8pc in 2023, while its share in the Philippines rose to 61.9pc, making them the region's two most coal-reliant countries. Vietnamese demand is also growing fast, with coal accounting for 57pc of generation in the first half of 2024. But Indonesia and the Philippines have also begun to take steps to reduce their coal dependence, in line with decarbonisation targets. The Monetary Authority of Singapore (MAS) last year launched the Transition Credits Coalition, to use carbon credits for the early retirement of coal-fired plants. Philippine energy firm Acen aims to use the transition credits to accelerate the retirement of the 246MW South Luzon coal-fired facility, and replace it with a clean energy dispatch facility. Indonesia joined the Just Energy Transition Partnership (JETP) in 2022, putting it in line to receive $20bn from international financing partners. Under the JETP, a bank provides a loan to buy the coal-fired plant from the current operator, which receives compensation for debt equity and profits foregone for selling the asset for its early retirement, energy finance specialist at the Institute for Energy Economics and Financial Analysis, Mutya Yustika, told Argus . But the JETP has not been successful because policy makers want a higher proportion of grants than loans, Mutya added. Efforts to retire regional coal-fired plants early have yet to scale up because of a "heavy reliance on concessional capital", which is not enough to mobilise the necessary private capital to finance Asia's large and young fleet of coal-fired plants, a joint report by MAS and consultancy McKinsey said. Locked in and loaded Private sector financiers are also more interested in investing in renewable energy assets that generate returns, Mutya said, rather than taking on a polluting asset until it shuts. The JETP has motivated Indonesia to develop a comprehensive investment and policy plan, but the plan remains aspirational and lacks a clear strategy for implementing investment, Mutya said. Coal plants in southeast Asia are on average less than 14 years old, according to a 2023 report by Climate Analytics. Phasing out young plants is challenging because of recent investments and unpaid debt, so this could lock in their emissions for decades. About 60pc of coal plants in south and southeast Asia are financed by state-owned utilities or based on a single-buyer model, which "shields them from market competition", Climate Analytics said. Most power purchase agreements with state utilitiesin Indonesia and Thailand extend beyond 2030. And Jakarta has yet to signal a move away from coal reliance, while public ownership and state officials' shareholdings in mining operations might complicate this, Mutya said. China, Japan and South Korea dominate financing of regional coal plants, and their support checks renewables' expansion, Climate Analytics said. Unless governments and private-sector investors can reduce risk and raise concessionary funds, new coal-fired generation could stay in the region's energy mix until 2030. By Prethika Nair and Tng Yong Li Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Africa seeks trillions in climate finance at Cop 29
Africa seeks trillions in climate finance at Cop 29
Africa faces the heaviest economic burden from climate change, and the most uncertainty over funding, writes Elaine Mills Cape Town, 7 October (Argus) — A key priority for African countries at the UN Cop 29 climate talks in Baku next month is to secure a new climate finance goal for developing countries. But as well as serious commitments on an amount, the continent wants increased accessibility and cheaper funding. Regional alliance the African Group of Negotiators (AGN) is seeking a climate finance commitment from developed countries of $1.3 trillion/yr by 2030, under a new climate finance goal currently being negotiated — the so-called new collective and quantified goal (NCQG). The NCQG is the next stage of the $100bn/yr target that developed countries agreed to deliver to developing countries over 2020-25. It was met for the first time in 2022, according to the OECD, but some countries in Africa have complained that the money never reached them. The AGN wants to steer clear of the old target, contesting whether it has even been met. The group says it wants lessons to be learned, especially regarding the quality of the finance and the difficulties countries have had in accessing it. Uganda asks that the new goal avoids "political statements that are not implemented", referring to uncertainties over how the finance was counted and accessed. African states want the funding to come mostly from public sources, largely in the form of grants and highly concessional loans. This should improve borrowing costs and ease debt burdens, which are forcing countries to make trade-offs with critical development needs. The group does not want market-based loans to be counted as climatefinance — the majority of multilateral climate loans were market-based in 2016-22. Most African countries face an unsustainable debt situation that has been worsened by higher global interest rates, AGN chair Ali Mohamed says. "Our focus is on agreed obligations within the multilateral climate process and the need to improve investments to unlock the continent's potential to tackle the climate crisis, which is paralysing most economies," he says. Africa receives only 2pc of total global climate finance, according to think-tank Climate Policy Initiative. The new NCQG must create the right conditions to push that share to at least 30pc, "otherwise it is a failed process", a South Africa negotiator said last month. The heaviest price The first global stocktake at Cop 28 in Dubai last year acknowledged the world is off track in meeting the Paris Agreement's goals, with significant ambition and implementation gaps in mitigation and adaptation, as well as loss and damage, Mohamed says. African countries submitted ambitious nationally determined contributions, but there has not been corresponding financial and technical support for their implementation. "We lack clarity on the amount of current and future funding, capacity building and technical support," Kenya's cabinet secretary for environment, climate change and forestry, Aden Bare Duale, says. This vagueness undermines transparency of support under the Paris accord, and addressing it should be prioritised in the forthcoming negotiations, he says. African countries lose 2-5pc of their GDPs annually and many divert up to 9pc of their budgets responding to climate extremes, according to the State of the Climate in Africa 2023 report by the World Meteorological Organisation. The report serves as a stark reminder of the urgent need for climate action in Africa, where extreme weather events disproportionately impact the continent's socio-economic development, Zambian environment minister Mike Mposha says. "It is African nations who pay the heaviest price," Simon Stiell, head of UN climate body the UNFCCC, says. "But it would be incorrect for any world leader — especially in the G20 — to think ‘It's not my problem'. The economic and political reality — in an interdependent world — is we are all in this crisis together." Climate finance flows and needs in Africa Bilateral climate finance loans in 2016-2022 Multilateral climate finance loans 2016-2022 Multilateral climate finance loans 2016-2022 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Argus related services
