COP29 – Looking Ahead

Executive summary:

  • At COP29 we will be expecting a focus on how countries can deliver more financing to those on the front lines of the climate crisis. This encompasses new financing pledges to the Loss and Damage Fund.
  • There are updates expected on nationally determined contributions (NDCs); these commitments include national GHG reduction targets and pathways to net-zero alignment.

This week brings with it the start to the global climate change conference, known as the Conference of Parties – or COP. This year’s conference, like previous years, takes place among continuing economic turbulence and geopolitical unrest. Despite this backdrop, negotiators from the 198 parties are meeting from November 11th to the 22nd to discuss how to further a global policy response to the climate crisis. 

What happened at COP28? A re-cap. 

Last year’s COP28 was the largest climate COP in history – almost 100,000 people1 gathered in Dubai to negotiate advancement on global climate action. 

1. The first climate report card was published through the Global Stock Take

The Paris Agreement (COP15) committed countries to limiting temperature increases to below 2 degrees Celsius and targets 1.5 degrees Celsius compared with the pre-industrial era. The Global Stock Take measures how countries are progressing towards this goal. COP28 found that global emissions have continued to rise by 1.5% a year. To keep the Paris goals alive, emissions need to decrease by 7% a year by 2030. 

2. Funds were mobilised through the Loss and Damage Fund

Over $726 million2 was operationalised through the Loss and Damage Fund. The Fund focuses on supporting adaptation efforts in developing nations which have historically contributed the least to the climate crisis but are experiencing the worst impacts. While it is a starting point, the initial funds represent only 0.2% of promised funding.

3. A global push toward renewables

COP28 saw countries agreeing to triple global renewable energy capacity and to double the rate of energy efficiency improvements by 2030. This point was a concession by developing nations which protested the verbiage to “phase out” fossil fuels (the agreement says it will “phase down” fossil fuels). Renewable energy was the compromise. 

What do we expect at COP29?

COP29 is hosted this year by Azerbaijan and has been nicknamed the “finance COP”. As the agenda shows, a key focus will be on how countries can deliver more financing to countries and communities on the front lines of the climate crisis. 
 
Financing the climate crisis
 
As part of the official review process set forth by the UN Framework Convention on Climate Change (UNFCCC), countries will reevaluate how much money they intend to contribute to paying for climate action. In 2009, countries agreed to mobilise $100 billion per year to support climate action. It was met for the first time in 2022. How developed countries are contributing their vast resources to address the climate crisis will be a key focus and outcome for COP29. 
 
In line with this will be negotiations to commit more funding to the Loss and Damage Fund which was mobilised at COP28. This year, countries are expected to make new financing pledges to the Fund so developing countries can address immediate climate adaptation projects. 
 
Setting new goals
 
Another key discussion point for the conference will be countries updating their climate commitments in line with the Paris Agreement. Known as NDCs, these commitments include national GHG reduction targets and pathways to net-zero alignment.
 
The bottom line
 
COP29 looks to be a conference of reflection and financing. However, it takes place in a world of uncertainty led by the recent results of the United States election – President Trump withdrew from the Paris Accord in his first term and has promised to do so again. This has put pressure on Europe and China to lead progress on addressing climate issues and secure an agreement which will further limit global warming and curb the climate crisis. 

 

[1] https://www.weforum.org/stories/2023/12/cop28-what-did-it-accomplish-and-whats-next/

[2] https://www.weforum.org/stories/2023/12/cop28-loss-and-damage-fund-climate-change/

  

Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and does not constitute investment advice.