Investment Institute
Sustainability

COP29 and the US election: Where does the battle against climate change go now?

KEY POINTS
The progress made on climate finance at COP29 was limited, with a commitment of just US$300bn per year by 2035 to support developing countries
As expected, there has been no follow up on how the world will transition away from fossil fuels - which was not even mentioned in the final draft
While this does not bode well for a reduction in oil and gas production before 2030, we believe China’s domination in green technology could be a key driver in terms of the US maintaining its efforts in that field with Europe accelerating further
Donald Trump’s re-election has raised much uncertainty over the battle against climate change but we believe that various safeguards should limit his impact at a global level
Economic and financial realities are what businesses focus on and this will take the lead over politics

A meagre COP29 outcome

COP29’s progress on climate mitigation, as expected, was quite limited as it failed to move forward on the vital task of transitioning away from fossil fuels. In fact, this was not even mentioned in the final text of the agreement made at the United Nations climate change conference in Baku, Azerbaijan.1

From now on, all eyes should thus turn to COP30 - set to take place in Belém, Brazil - to see what comes out of updated National Determined Contributions (NDCs).

The UK and the United Arab Emirates (UAE) were among those announcing new NDCs during this Conference of the Parties (COP). The UK has committed to reducing its emissions by at least 81% by 2035, compared to 1990 levels, a clear progression on its previous NDC pledge to cut emissions by at least 68% by 2030.2

It is yet to be seen whether other developed countries will follow suit. For its part the UAE set a reduction target of 47% by 2035 compared to the 2019 baseline, up from a target of 19% by 2030 relative to 2019, which is not viewed as credible by Climate Action Tracker3  and does not reference any reduction in oil and gas production. This is not insignificant.

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