COP29: UN chief warns world is in 'final countdown' to limit global warming to 1.5C
- United Nations Secretary-General António Guterres declares a Climate Emergency, with 2024 being the hottest year on record.
- Developing countries require increased financial support to adapt to climate change and reduce emissions.
- All countries, especially G20 nations, must collaborate to accelerate climate action and limit global warming to 1.5 degrees Celsius.
- Urgent and ambitious action is needed to avoid catastrophic climate impacts and ensure a sustainable future for all.
Explainer: COP29 agreement on carbon market
- Breakthrough was achieved at COP29 with the approval of standards for the UN-backed carbon market under Article 6.4 of the Paris Agreement.
- The approval process for these standards bypassed the usual negotiation process, raising concerns about transparency and inclusivity.
- The new carbon market could stimulate demand for carbon credits, benefiting both project developers and buyers. However, there are concerns about the quality and integrity of these credits.
- Some key questions remain, such as how to address reversal risks and ensure that the market does not lead to human rights violations or environmental harm.
- While some stakeholders welcome the agreement as a step forward, others express concerns about the rushed process and potential negative consequences.
Why Indigenous peoples are raising the alarm on carbon trading at UN Climate Summit
- Indigenous leaders at COP29 are raising concerns that carbon trading could lead to rights violations and land grabs, particularly targeting their lands for carbon offset projects without proper protections or consent.
- The global North supports carbon markets as a climate solution, but Indigenous Peoples and global South nations argue it lacks stability, necessary safeguards, and accountability, potentially prioritising profit over genuine climate finance and equitable support.
- A core demand from Indigenous representatives is for all carbon projects to adhere to the principle of free, prior, and informed consent (FPIC) to protect their lands, resources, and ways of life.
- Indigenous delegates are advocating for a standardised, rights-based approach to carbon markets, calling out the dangers of rushing carbon offset projects that may exploit natural resources and overlook human rights and environmental impacts.
COP29: What would a good outcome look like?
- A key focus of COP29 is the implementation of a global carbon market under Article 6 of the Paris Agreement. This market aims to incentivise emissions reductions and fund climate projects.
- The need for increased climate finance, particularly for developing countries, is a major issue. The goal of mobilising $100 billion per year is insufficient, and there is a push for a significantly higher figure.
- To bridge the finance gap, discussions are ongoing regarding innovative sources of finance, such as taxes on fossil fuels and wealth taxes.
- The operationalisation of the loss and damage fund established at COP28 is a priority, ensuring financial support for vulnerable countries affected by climate disasters.
- Countries are urged to submit more ambitious Nationally Determined Contributions (NDCs) to align with the 1.5°C warming limit.
- Ensuring a just transition away from fossil fuels and addressing social equity concerns are crucial for a successful climate response.
- Protecting Indigenous rights and incorporating traditional knowledge into climate solutions are essential for effective climate action.
Industry players highlight synergy of Article 6 with voluntary, compliance carbon markets
- The newly established Article 6.4 carbon market under the Paris Agreement is expected to converge with existing voluntary carbon markets, leading to increased demand and standardised credit quality.
- Buyers are increasingly seeking carbon credits that meet rigorous standards and are recognised by both voluntary and regulatory markets.
- Voluntary carbon markets can play a significant role in providing high-quality carbon credits that can be used in both voluntary and compliance markets.
- Governments are playing a more active role in regulating carbon markets, ensuring transparency and accountability.
- There are significant price differences between Article 6.2 credits and voluntary carbon market credits, highlighting the potential for price convergence as markets mature.
What do we think?
A convergence of the voluntary and compliance carbon markets could establish standardised quality criteria, enhance transparency, increase market liquidity, and align pricing.
COP29 climate talks urged to find $1 trillion a year for poorer countries
- At COP29, countries are working to set a new annual climate finance target of $1 trillion to support vulnerable nations, but political tensions, including Argentina’s withdrawal, have hindered progress.
- With previous climate finance goals unmet until 2022, developing countries emphasise the need for secure funding to achieve ambitious climate targets, as economists project they’ll require at least $1 trillion per year by 2030 and potentially $1.3 trillion by 2035.
- The U.S. may withdraw from climate funding under Trump’s administration, putting pressure on other wealthy nations and multilateral development banks to increase contributions; some banks aim to boost climate finance by 60% by 2030.
- Political divisions have disrupted the summit, with Argentina’s exit and tensions between France and Azerbaijan casting a shadow over negotiations, prompting calls for a focus on unified climate action.
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