18 November 2024 – As we enter the decisive week two of COP29, feelings are mixed on the amount of progress that has been made, with negotiating teams being reminded that “the clock is ticking.” Negotiations in week one took place under the shadow of political tensions, public disagreements and global politics.
Early climate targets
Countries including the UK, UAE and Brazil demonstrated commitment to a more ambitious climate goals as part of the convention’s process to set targets known as Nationally Determined Contributions or NDCs. The UK is committing to an 81% emissions cut by 2035. On hearing the news, UK Corporate Leaders Group Director, Beverley Cornaby, stated: “The UK – as the first G7 country to announce its 2035 NDC – is sending a powerful signal to industry, investors, and society that it is committed to achieving a sustainable and resilient future that is aligned to the Paris Agreement of keeping warming within 1.5 degrees and avoiding the worst impacts of climate change." Read her full statement.
By being one of the first major countries to announce their target and by showing strong support for the process, the UK has demonstrated a clear increase in its ambition to lead on climate change. This was met with praise from those on the ground, galvanised that the UK appeared to be a major player in tackling the climate emergency once again.
The UK NDC announcement was followed up later in the week with plans of a financial package by the UK Government to support those most affected developing nations. This fulfils the UK’s existing £11.6 billion International Climate Finance commitment between 2021/22 and 2025/26, which was previously under threat.
Brazil, next year’s secretariat for COP30 in Belem, also announced its NDC early in the conference, committing to between 59-67% emissions reduction by 2035. The UAE also released its new NDC, aiming to achieve a 37-53% cut in emissions in the same timeframe.
These countries have different targets based on different circumstances and contexts, but have each provided a good signal that they remain committed to climate action.
As other countries finalise their own NDCs, it will be crucial that they send early, positive signals through their respective ambitions. Many are waiting to see what the next moves from major emitters and key economies will be, including those of the US, China, Japan, Canada, India and Indonesia.
Progress needed on climate ambition
The Taskforce on Net Zero Policy released a report that found that while progress on net zero policy is advancing in a significant number of regions globally, the policy landscape is still insufficiently aligned with a 1.5°C future, consistent with ongoing global misalignment with the goals of the Paris Agreement.
Furthermore, 50 global business leaders from high-emitting industries and the Industrial Transition Accelerator, a network of more than 700 financial institutions, issued an open letter urging governments to use proven policy measures to stimulate demand for green products and better seize the potential of industrial decarbonisation.
The Industrial Transition Accelerator said that by putting appropriate policies in place, governments could unlock up to $1 trillion of investments and bring more than 500 green industrial plants awaiting financing to construction by 2030.
To add to this, countries are being urged to commit to an energy storage target of 1.5 terawatts by 2030, which would enable the much talked-about tripling of world renewable energy capacity.
The hugely important finance goal
The success of COP29, dubbed the ‘finance COP’, depends on whether countries can agree on a new finance target – the New Collective Quantified Goal on climate finance (NCQG), which is due to be operationalised from 2025 onwards.
The NCQG is a goal meant for providing developing countries with the finance they require to implement impactful climate action. Leading economists have told the UN talks that developing countries need at least $1 trillion annually by the end of the decade to cope with climate change.
The previous annual finance goal of $100 billion expires this year, but wealthy countries only met the pledge in full starting in 2022.
In week one, negotiation teams have been working on draft texts, but there remains a wide divergence in the levels of funding that countries are willing to commit to, as well as who contributes, and how – meaning this is as difficult to get over the line as ever. The US and Europe want more countries to contribute funding, putting pressure on countries that have more recently become major economies like China to also contribute.
Progress needed to reach the finance goal
A report from the Independent High-Level Expert Group on Climate Finance said the target annual figure would need to rise to at least $1.3 trillion a year by 2035 if countries fail to act now.
Multilateral development banks, such as the World Bank, are looking at how they can increase their share of funding. Ten have already indicated they plan to increase their funding by 60 per cent to $120 billion a year.
The likely withdrawal of the United States from any future funding deal is pressuring delegates to find ways to secure much-needed funds.
Article 6.4 was adopted early
Similarly to the surprisingly early news of a Loss and Damage fund being agreed at last year’s COP28, day one in Baku saw the adoption of Article 6.4, which will pave the way for a UN-backed global carbon market. This provides incentives for countries to reduce emissions as the market facilitates the trading of carbon credits. However, this early progress has attracted criticism from some commentators over whether it sufficiently took on board the inputs of enough countries and only represents part of the article 6 discussions.
Simon Stiell, UN Climate Change Executive Secretary, said: “Parties agreed strong standards for a centralised carbon market under the UN. There’s more work to do, but this is a good start – the product of over 10 years of work within the process. When operational, these carbon markets will help countries implement their climate plans faster and more cheaply driving down emissions.”
Will we see renewed commitment to transition away from fossil fuels in week two?
The US and European Union want to ensure that the final outcome not only includes a finance deal but also restates all countries’ commitments from COP28 last year to transition away from fossil fuels, triple renewable energy and double energy efficiency. Another negotiating group of like-minded developing countries, including China, India and others, is pushing back by saying the focus should be on finance without a need for reaffirming last year’s commitments.
Don’t Baku out now
The first week at UNFCCC climate conferences is more often than not about laying down the framework text to be negotiated in week two, when government ministers return to conduct political negotiations. But with the G20 summit happening in Rio de Janeiro over the next two days, we can only hope that ministers return to Baku galvanised to deliver the ambitious NDCs and NCQG targets the world needs to see.
Business climate groups sent a strong message to G20 leaders, coordinated by WMBC and Mission 2025, to secure a strong outcome from COP29 by delivering ambitious new Nationally Determined Commitments that are consistent with 1.5°C, and to reach an ambitious agreement on climate finance that will step up support for developing countries.