Sunny climate stormy climate | News Digest #49 | COP 29 Special
This week we dive into the sunny and stormy from COP 29
COP 29 concluded this week. COP (The Conference of Parties) is the biggest global gathering on climate. It’s where leaders from all countries come together to discuss how the world can address climate change and make pledges/ commitments regarding the actions they will take.
The COP is a 10 day affair with some serious negotiation, long discussions and a lot of jargon. So I have taken a stab at breaking down the key take-aways from COP 29 and presenting a summary of the sunny and the stormy
If you’re wondering what COP 29 even means, you can read the COP explainer I wrote earlier.
🌞 Sunny news 🌞
1. Carbon market rules were agreed on after ~10 years of negotiation!
What do we mean by carbon markets?
Carbon markets are a financial systems designed to facilitate the buying and selling of carbon credits
Carbon credits are permits that allow the holder to emit a specific amount of carbon dioxide (CO2) or other greenhouse gases. 1 carbon credit typically represents the right to emit one metric ton of CO2 or its equivalent in other greenhouse gases.
So, say if a steel producing company was required to reduce its carbon emissions by XX tons, but it was unable to do through its operations, it can meet the regulatory requirement by in stead buying XX carbon credits from another player.
What rules were regarding carbon markets were finalised?
The rules established at COP29 clarify how carbon markets will function, particularly focusing on two main components:
Article 6.2: Talks about a system for bilateral agreements between countries, allowing them to trade carbon credits generated from emission reductions or removals.
Article 6.4: This establishes a centralized UN-managed carbon market, which will oversee the issuance and transfer of carbon credits.
Why does this matter?
Article 6 (that talks about carbon markets) was first laid out in the Paris agreement as part of COP 21 in 2015.
The rules to operationalise it have been in discussion for almost 10 years! And so this agreement brings to an end 10 years of negotiation.
Operationalisation of the carbon market can give an impetus to the generation of carbon credits and encourage innovation and scale for emission reduction or carbon removal as there is now a market mechanism that can pay for it.
Pedro Martins Barata of the Environmental Defense Fund wrote on LinkedIn that the significance of the deal “cannot be understated”. He wrote:
“For the first time since 2013, we may see the emergence of a viable, UN-backed mechanism to broaden and link carbon markets across the world.”
⛈️ Stormy news ⛈️
2. The new climate finance goals: 300 bn dollars to developing countries by 2035.
What are we talking about?
One of the main goals of this COP was to arrive at New climate finance goal (NCQG)
What is climate finance: It refers to funds used to support actions aimed at mitigating and adapting to climate change
In the context of COP, it is the amount of money developed countries pledge to make available for developing countries for mitigation and adaptation.
What was the old goal and what is new goal agreed on in COP 29?
The earlier target that was agreed on in 2015 was 100 bn dollars/ yr by 2020. This rate of annual financing was met only in 2022 and will continue till 2025.
The new target is 300 bn dollars/ yr by 2035. This is the amount of money developed countries (this includes 24 “developed” parties, including the US, the EU and Japan
Why is this a problem?
This is just a fraction of the 1.3 tn dollars that was asked by the developing countries as what is needed.
This is a target to be reached by 2035. Doesn't account for inflation. In 2035 figures this will probably just mean 150-175 bn dollars/ yr (hardly a 50% increase over the current pledge)
Historically, a lot of this financing has been in the form of loans. Loans are challenging because the developing nations still have to deal with the interest rates. The current goal does not clarify how much of this if any will be in the form of grants.
This 300 bn is not coming only from developed countries. It is 'led' by developed countries, but can also includes the larger developing countries like China and India.
3. The Azerbaijan presidency of COP 29
What are we talking about?
Azerbaijan was the country hosting COP 29 and thus held the presidency of the conference.
There have been several problems in the way this conference has been run.
What were the challenges/ issues related to the Azerbaijan presidency?
COP CEO, Elnur Soltanov was caught on camera agreeing to make fossil fuel deals. He actually said “We will have a certain amount of oil and natural gas being produced, perhaps forever” indicating they don’t actually believe a fossil fuel transition is possible.
There was a lengthy fight over COP’s official agenda on day 1.
The final text on climate finance (point 2 above) was adopted without following proper process.
Agreements in COP are done by consensus.
Typically, after a text is released, the parties are given a chance to comment and speak.
However, the first draft of the climate finance text was released only shortly before the final plenary session, which left little time for thorough discussion and feedback from all parties involved.
The gavel was hit indicating acceptance barely a minute after the final text was read out giving no time for parties to speak.
Critics, including representatives from India and Nigeria, accused the COP presidency of "stage managing" the adoption process.
I have just covered 3 topics here. COP 29 went on for 10 days and covered many more issues. I will suggest a few resources I found helpful if you want to read more:
About COP 29 and climate finance - This is a great, easy to understand visual explainer by Weird and Wild
COP29: Key outcomes agreed at the UN climate talks in Baku - A detailed report by Carbon brief