COP29 needs concrete results

Last week, the Climate Action Summit took place, bringing together world leaders within the framework of the United Nations Climate Change Conference (COP29), which is being held this year in Baku (Azerbaijan). But the meeting generated less interest than other years; a change to be critically examined from global future projects.

The short list of attendees stands out: the leaders of the thirteen countries that generate the most emissions No they came to the event; It should be taken into account that the G20 summit met that same week in Brazil. Managers Important financial institutions – such as Bank of America or BlackRock – also stayed away from the conference (despite the centrality of the financial issue among the agenda objectives). And the decision to hold the event in Azerbaijan, a country dependent on natural gas, sparked accusations of “ecoposturing” (Greenwashing) by environmental activists. As happened last year – when the COP was held in Dubai – these tensions show the need to accept that natural gas will be a long-term transitional energy source.

On a more general level, there are many issues that require the attention of the “international community.” There is the counteroffensive Russian (with the substantive support of North Korean troops) to recover territories in the Kursk region. At the same time, Israel is fighting on two fronts (Gaza and Lebanon) and today the escalation of the war seems more likely than the decrease in virulence. And, although predicting the steps that the erratic Donald Trump will follow upon his return to the White House is impossible, the risk of geopolitical instability, democratic weakening, and setbacks in climate policy is feasible.

Self-confessed climate change denier and a staunch supporter of oil and gas exploitation, Trump has promised to withdraw the United States from the “horribly unfair” Paris climate agreement (as he did during his first term). According to some sourcesthe executive order that will begin that process has already been drafted. It has announced the increase in gas production and export. Also put an end to the Green New Deal (green new pact) – which he calls “Green New Scam” (new green scam)–, which would go as far as rescinding the uncommitted funds provided for by the misnamed Inflation Reduction Law. Recent statements by Myron Ebellleader of a transition team in the previous Trump administration: “We are not going to worry about emissions anymore. The sooner we forget all this about reducing emissions, the better.”

Trump’s threats should not be underestimated, but there are reasons to hope that worst-case scenarios will not materialize. During his first term, Trump’s grandiose statements did not always come with the promised actions. To this we must add the measures in defense of the climate taken on their own by states, cities, organizations and individuals, which partially compensated for the omissions of the federal government. Still, the magnitude of Trump’s environmental impact will only be evident after he takes office in January. COP29, on the other hand, is now, and its objectives cannot wait.

The “COP of finance” (as the Baku meeting is known) will address the lack of funding for climate action that disproportionately affects developing countries. In this regard, the much publicized objective agreed by developed economies in 2009 of reaching 2020 contributing one hundred billion dollars a year is reached for the first time just two years ago. In addition to the delay, the commitment is not enough: foresees The annual financing needs of emerging and developing economies (excluding China) are expected to reach around $2.4 trillion by 2030.

In this context, it is to be hoped that COP29 participants negotiating a “New EITHERobjective celective cquantified” for the financing of climate action approve an ambitious figure. It is not at all certain, however, that this figure is on par with existing needs. And implementation won’t be easy: Most of it will fall to the private sector; in particular, private financial institutions.

In many countries (specifically in Africa), the lack of access to electricity hinders the energy transition. Thus, it is evident the existence of a correlation direct relationship between the uniformity of the base power generated by an electrical grid and economic prosperity: a reliable and affordable energy supply is essential for development. And yet, 570 million people in sub-Saharan Africa still do not have access to electricity (80% of the world total) and that figure has been increased since 2021.

The rapid population growth of the Global South will exacerbate the problem; HE calculate that there will be 2.5 billion people living in Africa alone in 2050 (today it is 1.5 billion), and renewable energy sources are not reliable enough to meet the resulting increase in demand. Hydrogen and nuclear energy can help mitigate the deficit, but both technologies require huge upfront investments in infrastructure that are beyond the reach of the public purse.

That is why it is essential to mobilize private capital. Governments must devise effective strategies for risk mitigation and fostering a favorable investment environment. Strategic partnerships between governments, international financial institutions (IFIs) and the private sector will be crucial.

Many IFIs are still in the early stages of crafting a green industrial strategy, but will play a central role in catalyzing private sector investments and facilitating the energy transition in emerging and developing economies. This includes helping to de-risk early investments and working with governments to set ambitious goals, define pathways to their achievement, and establish frameworks and standards for policymaking.

The Baku Initiative for Climate Finance, Investment and Trade It is a step in the right direction by encouraging the creation of national, regional and subregional platforms aimed at maximizing these three categories. But without global support, the impact of initiatives like this will be limited.

Even at a time of increasing geopolitical disruption, we cannot afford to be distracted from the imperative of addressing climate change. Letting COP29 conclude without ambitious and credible funding commitments would be inexcusable.

Copyright: Project Syndicate, 2024.
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