Winds of up to 240 kilometres per hour flattened entire neighbourhoods and toppled power and communication lines, causing damage equivalent to a third of the country’s annual economic output, according to early government estimates.

Many Grenadians cast their minds back 20 years when a similarly powerful storm – Hurricane Ivan – brought the island state to its knees, triggering a vicious circle of financial distress that eventually led to a debt default.

But, unlike in 2004, officials this time could deploy a tool that has been widely discussed in climate circles to provide financial help in the wake of fierce storms: hurricane clauses built into its agreements with international creditors.

Grenada last week became the first country in the world to use such a provision in a government bond which will allow it to postpone debt repayments to private investors, including US investment firms Franklin Templeton and T. Rowe Price.

Switzerland and Canada propose ways to expand climate finance donors

The move will save the Caribbean island nation a total of around $30 million in payments due this November and in May next year. While the money owed will be added to future bills, in the meantime the cash injection will help fund immediate recovery efforts and keep essential services like healthcare and education running, a senior official in Grenada’s Ministry of Finance told Climate Home.

The government is now “in talks” about triggering similar clauses with other creditors.

Fighting the debt trap

Grenada’s use of debt suspension clauses will be seen as a litmus test for their effectiveness in shoring up disaster-hit economies, as major international financial institutions like the World Bank promise to offer them more widely to climate-vulnerable countries.

Mike Sylvester, permanent secretary at Grenada’s Ministry of Finance, told Climate Home the debt repayment pause can have a “significant” impact in the short term, giving “some breathing space to the government to be able to properly and adequately respond to the crisis”.

Without this option and other relief measures, the government may have struggled to meet basic needs without making painful cuts to services, he added.

Simon Stiell, the head of the UN Climate Change body (UNFCCC), told Climate Home that “mechanisms such as this will be increasingly important as the scale, frequency and impacts of climate disasters continue to worsen”. Last month Stiell saw first hand the scale the devastation Hurricane Beryl inflicted on his home island of Carriacou – part of Grenada – where 98% of homes and buildings had been destroyed or severely damaged.

Like Grenada, many developing nations are finding it hard to deal with the combined effect of rising debt and worsening climate impacts.

Nearly half of low-income countries currently experiencing or at high risk of debt distress are also highly vulnerable to the effects of climate change, according to a March 2023 report by the UN Trade and Development agency (UNCTAD).

A separate analysis by charity Debt Justice found that debt payments for the most climate-vulnerable countries have reached their highest level in at least 30 years.

Emily Wilkinson, a senior research fellow at think-tank ODI, said that when a natural disaster hits a highly debt-distressed country, the impact on the economy is likely to prompt a default unless there are safeguards in place or the debt can be renegotiated quickly.

Disaster clauses in spotlight

Debt suspension clauses have risen to the top of the agenda since they were featured among the key recommendations put forward by Barbados Prime Minister Mia Mottley in her Bridgetown Agenda, a vision for reforming the global financial architecture and making it fit for a world grappling with rising climate pressures.

The World Bank expanded the scope of its climate-resilient debt clauses last year. Pauses on repayments of all new and existing loans, and related interest payments, are now being offered to 45 states it classes as “small” including island nations.

Other international development lenders, like the African Development Bank, the Inter American Development Bank and the UK Export Finance, have introduced similar options.

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For Marina Zucker-Marques, an economist and senior researcher with the Boston University Global Development Policy Center, temporary debt suspensions are an important tool that gives disaster-hit countries “some breathing space, allowing them to prioritise social spending, which is critical in the immediate aftermath of a natural disaster”.

But while these clauses have become more popular, they are still “a tiny fraction of debt contracts,” she added.

The lesson of 2004

Grenada is among a handful of countries that have pioneered the inclusion of hurricane clauses in their loan agreements dating back nearly a decade.

After the devastating experience of Hurricane Ivan in 2004 and a subsequent default, the island nation insisted on including such provisions in 2015 when it restructured debt with its main creditors, international private bondholders and the Exim Bank of the Republic of China (Taiwan).

One of the main challenges during the extended negotiations was to settle on specific parameters that would allow Grenada to trigger the clause in the event of a severe storm. These could be the wind-speed or the size of the economic losses caused by the disaster.

In the end, Grenada and its creditors agreed that a payout from the Caribbean Catastrophe Risk Insurance Facility (CCRIF), a regional disaster insurance fund Grenada is part of, for losses over $15 million would be the trigger.

After the passage of Hurricane Beryl, CCRIF has made a record $44 million insurance payout to Grenada as a result of the extensive damages to the islands. This enabled the government to activate its debt suspension clauses.

The aftermath of the devastating passage of Hurricane Beryl on the island of Petite Martinique, Grenada in July 2024. REUTERS/Arthur Daniel

Sylvester from Grenada’s Ministry of Finance said the country is now much better prepared to deal with the financial aftershocks of a hurricane, having learned the lesson of the events in 2004 – but more needs to be done.

“The money that we’ve received so far is still a drop in the bucket, given our significant needs,” he added. “We need to continue to build our resilience with the right financial tools, because we don’t want to pile up our debt just to reconstruct damaged infrastructure.”

Grants and debt relief

To that end, the government has set up a disaster relief fund, while looking to repurpose some of its loans and obtain new financial help from multilateral banks.

Boston University’s Zucker-Marques said support from rich countries, which are major contributors to climate change through their historically high greenhouse gas emissions, is fundamental to prevent financial crisis in developing countries on the frontline of extreme weather.

“Climate vulnerable countries need access to more grants and affordable long-term finance to invest in resilient infrastructure and economies,” she said. “Otherwise, the vicious cycle of natural disasters and financial instability will only worsen in the years to come.”

ODI’s Wilkinson said pausing countries’ debt is helpful, but she called for further action from creditors. “In the case of a qualifying disaster, they should offer some form of debt relief on repayments rather than just delaying them – which only kicks the can down the road,” she added.

The article was updated on 23/8 to add a comment from UNFCCC chief Simon Stiell received after publication.

(Reporting by Matteo Civillini; editing by Megan Rowling)

The post In a world first, Grenada activates debt pause after Hurricane Beryl destruction appeared first on Climate Home News.

Most developing countries offer a straightforward answer: keep the status quo, meaning only the countries classified as industrialised when the UN climate treaty was adopted in 1992.

But this club of developed nations, vocally led by the European Union and the United States, argues that the world has changed dramatically over the past three decades.

They now want other countries that have become wealthier – and more polluting – to pitch in for the post-2025 New Collective Quantified Goal (NCQG), set to be agreed at the COP29 climate summit in Baku this November.

China targeted

The EU wrote this week, in a document submitted as part of the NCQG negotiations, that “the collective goal can only be reached if parties with high [greenhouse gas]-emissions and economic capabilities join the effort”.

The US echoed that position in its latest submission, arguing that “those with the capacity to support others” in pursuing action to cut emissions and boost climate resilience “must also be accountable” for delivering on the climate finance target.

But, as governments polish their arguments ahead of the next round of talks in mid-September, climate finance experts warn of an uphill battle to get everyone to agree to a fair and accurate way to broaden the donor base.

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For instance, as the world’s top polluter and the second-largest economy, China is the primary target of the finger-pointing. But, when the country’s emissions and wealth are divided by its enormous population, China does not rank among the main candidates for an expanded contributors’ pool, according to climate finance studies.

At annual climate talks in the German city of Bonn in June, China’s negotiator reacted angrily at suggestions his country should become a donor. “We have no intention to make your number look good or be part of your responsibility as we are doing all we can to save the world,” he said.

Who pays?

Switzerland and Canada have been the first nations to propose precise criteria to expand the list of contributors beyond developed countries.

The Swiss negotiators pitched two detailed metrics in their latest submission early this month.

The first would target the ten largest current emitters of carbon dioxide that also have a gross national income (GNI) per capita – adjusted for purchasing power parity – of more than $22,000.

Under this measure, Saudi Arabia and Russia would be included. China would too if it is calculated based on current international dollars, which Climate Home understands would be the Swiss intention, even though the proposal does not specify.

But China would be excluded if GNI per capita were based on constant 2021 international dollars, highlighting the ambiguity of the proposals at this point.

Populous nations with large absolute emissions like India, Indonesia, Brazil and Iran would be left out because the average wealth of their residents falls below the threshold, according to World Bank data.

Similarly, Canada’s proposal – released last Friday after this article was first published – singles out the top ten emitters but with a slightly lower GNI per capita threshold of $20,000. In this case, China would be included whichever GNI calculation is used.

The second category in the Swiss proposal targets countries that have cumulative past and current CO2 emissions per capita of at least 250 tonnes and a purchasing power parity-adjusted gross national income per capita of more than $40,000.

Assuming the Swiss proposal means emissions starting in 1990, then fossil fuel-producers in the Gulf like Qatar, the United Arab Emirates and Bahrain would be included, alongside South Korea, Singapore, Israel, Czechia and Poland.

But climate finance experts told Climate Home they are sceptical such strict criteria will work at the negotiating table and make it into a final decision.

“Discussing thresholds and indicators is a technical and politically charged issue, and it will be very difficult to get everyone to agree on them,” Laetitia Pettinotti, a research fellow at ODI, told Climate Home. She added that countries need to be encouraged to consider whether their emissions and GNI per capita are similar to those of developed countries, while also taking into account their climate vulnerability.

Pieter Pauw, assistant professor at the Eindhoven University of Technology, said the current system is “outdated and increasingly dysfunctional”, but the focus should be on making it less rigid rather than finding “arbitrary” ways to add more countries to a list.

Pauw is the co-author of a new study looking at options to increase the number of climate finance providers.

New “net recipients” category

The paper found that several developing countries, including China, Saudi Arabia and Russia, have shown appetite to finance multilateral development funds, such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, but not those dedicated to climate action.

“It’s because the climate discourse is so politicised now,” Pauw said. “They are afraid that agreeing to contribute to a climate finance goal would set a precedent and burden them with more responsibilities.”

“It is important to find a way to have them join the ‘contributors club’ without putting a stamp on them and saying ‘OK, now you’re on the same level as developed countries’,” he added.

The study suggests one way out of the deadlock: instead of labelling countries rigidly as pure providers or recipients of climate aid, a third category of “net recipients” could be created. These would be nations that make financial contributions of any amount, while also being able to receive money at the same time.

“This compromise would allow countries to maintain their ‘developing’ status that gives them a right to receive finance where it is needed,” said Pauw. “But it also incentivises them to play a more proactive role that better reflects their new capabilities and responsibilities.”

Better transparency

A separate study by UK think-tank ODI suggests that many developing countries are voluntarily providing climate aid to fellow developing states, but their contributions go unrecognised at the moment because of a lack of transparency.

For example, China contributed over $10 billion in climate finance through its contributions to multilateral development banks and funds between 2015 and 2022, according to a newly updated ODI analysis shared with Climate Home and due to be released in early September.

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Pettinotti thinks that the donor base could be expanded by recognising these contributions and bringing them to the surface through a better reporting system.

“There is not going to be coercion – that is just not going to work,” she told Climate Home. “Making space for a bottom-up, self-determined position is all we can do to encourage more countries to contribute.”

Developing-world opposition

Many developing countries have opposed any official discussion over an expansion of the donor base in the talks so far, claiming that is not part of the NCQG working group’s mandate. They have also complained that, while fixating on this issue, developed countries have failed to put forward proposals on other key elements of the NCQG, such as the size of the funding target.

Avantika Goswami, climate lead at the Delhi-based Centre for Science and Environment, told Climate Home that developed countries have “a moral imperative” to provide climate finance because of their historically high emissions over the past century.

“The contributor-base expansion debate cannot be resolved within the narrow timeline of November 2024 when the NCQG is due to be decided”, she added. “Pushing for this expansion as a bargaining chip will only derail constructive discussions.”

This article was updated on 19/8 to include a proposal by Canada released after the article had been first published. It was also updated to remove a reference to Bermuda as a potential donor, as it is a British overseas territory. 

(Reporting by Matteo Civillini; editing by Joe Lo and Megan Rowling)

The post Switzerland and Canada propose ways to expand climate finance donors appeared first on Climate Home News.

The Integrity Council for the Voluntary Carbon Market (ICVCM) announced on Tuesday that eight renewable energy methodologies, which cover about a third of the carbon credits available on the voluntary market, cannot use its “Core Carbon Principles” (CCP) seal of approval.

The ICVCM, an independent watchdog, aims to address widespread concerns over the quality of carbon credits after many projects have been accused of overstating their climate and societal benefits. It is assessing groups of offsetting projects to determine whether they comply with the CCP criteria, which are designed to identify and encourage high-integrity carbon credits that meet requirements on governance, emissions reduction and sustainable development.

The body said existing standards are not strict enough on judging whether renewable energy projects need the funding generated by selling carbon offsets in order to go ahead – a concept known as “additionality”. But it emphasised that renewables like solar, wind and hydropower are key to tackling climate change and carbon credits “still have a role to play” in financing them.

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Since the eight methodologies were designed as long as 20 years ago, the cost of renewables has collapsed, and their profitability in many parts of the world has rocketed, meaning they are more likely to make money without needing extra revenue from selling carbon offsets.

The ICVCM said that “for several years, carbon market experts have noted concerns about the additionality of many renewable energy activities and the difficulties in transparently demonstrating the additionality of these activities approved under existing methodologies”.

Major carbon-credit registries like Verra and Gold Standard stopped accepting new grid-connected projects in 2019, with the exception of those located in least-developed countries (LDCs).

But pre-existing renewable energy activities continue to generate a sizeable chunk of all the offsets available on the registries.

According to a recent analysis by Carbon Market Watch, over 280 million renewable energy credits are available in the voluntary carbon market. If companies and individuals used all those credits, that would compensate on paper for emissions equivalent to the amount of carbon dioxide Thailand released into the atmosphere last year.

Inigo Wyburd, a policy expert at Carbon Market Watch, called the ICVCM’s decision “a positive step”. “It sends a clear message to tackle the issue of the many low-quality credits still in circulation and undermining the market,” he told Climate Home.

Despite long being written off as largely worthless by climate experts, renewable energy credits are still popular among corporate buyers.

Fossil fuel majors like Shell and Total, automakers and cruise operators were among the biggest purchasers of renewable energy credits over the last 12 months, an analysis of Verra’s database shows.

In one transaction last year, German carmaker Audi used nearly 100,000 carbon credits generated in 2021 from an Indian solar project to claim that its handover of electric vehicles in Europe and the United States was “CO2 neutral” despite the emissions involved in producing them.

Japanese parcel delivery service Yamato Transport Company and public entities like Australia’s Brisbane City Council and Western Sydney University also relied on renewable offsets to claim carbon neutrality in 2023.

A spokesperson for Audi told Climate Home: “We ourselves are not only dependent on the standards established in the market but depend on them being viewed critically too”, adding that the company is “convinced that constructive criticism leads to higher-quality projects and general transparency”.

The spokesperson said the automaker also increasingly relies on “on-site inspections, thorough due diligence and audit processes” and wants “to act independently of external providers in the medium term”. It founded a joint venture with ClimatePartner in 2022 to develop its own carbon offset projects.

Because of earlier concerns about whether carbon offsets generated by renewable energy deliver the emissions reductions they claim, their price has been falling over the last two years.

According to data provider MSCI, the average price is just $2 per tonne of carbon dioxide equivalent reduced – less than half the price of offsets derived from projects aiming to protect forests, tackle methane emissions or promote energy efficiency. Renewable energy credits are likely to see further falls in price after the ICVCM’s rejection.

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But Amy Merrill, CEO of the ICVCM, left the door open to better renewables methodologies obtaining CCP approval. She called on carbon crediting programmes to develop methodologies “that better reflect the rapidly changing and variable circumstances around renewable energy deployment”.

“While renewable energy costs have fallen dramatically around the globe over the past decade,” she said, “they have not fallen evenly across all countries and high up-front expenses and other barriers mean that there are still many places where it is difficult to deploy renewable capacity.”

The cost of renewables is particularly high in remote rural parts of developing countries without access to the electricity grid, on islands with small populations and in areas where the authorities are hostile to renewable energy for ideological reasons, particularly in parts of the US. Methodologies enabling projects in these places would have the best case to get CCP approval, market experts told Climate Home.

IPCC’s input into key UN climate review at risk as countries clash over timeline

Verra has announced that it will revise some of its additionality requirements “to address the deficiencies noted by the ICVCM”.

The registry plans to submit its new rulebook to the watchdog and give existing projects the possibility of updating their quantification of credits accordingly. “This is part of our commitment to providing a path for all VCS [voluntary carbon standard] projects that wish pursue a path to CCP labelling,” Verra said in a statement.

A Gold Standard spokesperson said ICVCM’s rejection of the methodologies was “ambiguous and potentially harmful to high-quality renewable energy carbon credits on the market today” as different regions across the world still face various financial and technical barriers making carbon finance necessary.

They added that Gold Standard would consider the ICVCM assessment framework among other inputs in its next review of relevant methodologies.

The ICVCM’s negative assessment of existing renewable energy credits could also have repercussions for the new United Nations carbon mechanism currently under development.

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Renewable energy projects make up four-fifths of all projects seeking a transfer from the old Kyoto-era Clean Development Mechanism (CDM) into the new market system being set up under Article 6 of the Paris Agreement, Climate Home revealed last January.

The projects need formal authorisation to proceed from the countries where their activities are located.

Carbon Market Watch’s Wyburd said ICVCM’s rejection of the renewable energy methodologies “will hopefully send a few shock waves” to the countries having to make those decisions. “Given their profound shortcomings, these credits should not be given a new lease of life under the future UN mechanism,” he added.

At the same time, the ICVCM approved other methodologies to capture methane from landfills and to detect and repair methane leaks in the gas industry. That means 3.6% of unretired carbon credits have now been approved to use the CCP label.

Shell, Norwegian Cruise Lines, Western Sydney University and Aviva did not respond to a request for comment on the impact of the ICVCM’s renewables decision. Total declined to comment.

The article was updated on 9/8 to add a comment received from Audi after publication.

(Reporting by Joe Lo and Matteo Civillini, editing by Megan Rowling)

The post Renewable-energy carbon credits rejected by high-integrity scheme appeared first on Climate Home News.

At the talks in Sofia, Bulgaria, most countries supported a faster process that would see three flagship reports assessing the state of climate science delivered by mid-2028, in time for the next global stocktake – the UN’s scorecard of collective climate action.

But a group of high-emitting developing countries made up of China, India, Saudi Arabia, Russia and South Africa – backed by Kenya – opposed an accelerated timeline, citing concerns that it would be harder to include scientists from the Global South, three sources present at the talks told Climate Home.

Governments were unable to reach a decision for the second time this year after “fraught talks” in January ended with the same outcome. The issue will be debated again at the next gathering in February 2025, while a separate expert meeting is tasked with drafting the outline of those reports by the end of 2024.

Fight over climate science

Adão Soares Barbosa, IPCC representative for Timor-Leste within the Least Developed Countries (LDCs) group, expressed his disappointment over the lack of agreement in Sofia resulting from “strong polarisation in the room”.

“If the assessment reports are not able to feed information into the global stocktake process, what are they good for?” he said, speaking to Climate Home.

Joyce Kimutai, who represented Kenya at the Sofia talks, said her country’s opposition to the proposed shortened timeline was “absolutely not intended to frustrate the process” but to highlight the challenges countries with more limited resources would be facing.

“With such a tight timeline, it is likely that we will produce a report that is not comprehensive, not robust. We found that very problematic,” she told Climate Home on Monday.

IPCC delegates exchange views in an informal huddle in Sofia, Bulgaria. Photo: IISD/ENB | Anastasia Rodopoulou

The primary purpose of the IPCC is to provide credible scientific assessments to the UN’s climate body (UNFCCC) and national decision-makers. The findings of its reports – which are usually compiled over several years by scientists working on a voluntary basis around the world – have been highly influential. They synthesise the latest research on climate change, as well as efforts to curb planet-heating emissions and adapt to the impacts of global warming.

The sixth series, whose final report was issued in March 2023, played a prominent role in informing the first UNFCCC global stocktake which resulted in governments agreeing for the first time to begin “transitioning away from fossil fuels” at COP28 in Dubai last December.

But some fossil fuel-rich countries like Saudi Arabia – which have pushed back against clear language on the need to cut production – have previously opposed strong recognition of IPCC reports in UNFCCC negotiations.

The UN climate body has officially requested that its scientific counterpart align its activities with the timeline of the next global stocktake. The IPCC’s input will be “invaluable” for the international review of climate action, Simon Stiell, chief of the UN climate body, told the IPCC meeting in January.

Reputation ‘at risk’

As he opened the session in Sofia, the IPCC chair Jim Skea warned of a “complex and testing” agenda.

The discussion over the report production schedule would have “far-reaching implications in terms of the timeliness of our products, and the inclusivity of both our own processes and the science that is being assessed”, he added. 

Scientists and government officials were presented with a proposal drafted by the IPCC secretariat – its administrative arm – which would see the assessment reports completed between May and August 2028. That would be a few months before the global stocktake process is scheduled to end in November 2028.

The IPCC must produce its flagship report in time for the next UN global stocktake

A majority of countries, including EU member states, the UK, the US and most vulnerable developing nations, supported the proposal, stressing the importance of the scientific reports feeding into the global stocktake, according to sources and a summary of discussions by the IISD’s Earth Negotiations Bulletin. Many supporters added that the IPCC’s reputation would otherwise be at risk.

Small island states and least-developed countries argued that IPCC input is crucial for those that lack capacity to produce their own research and are most vulnerable to the immediate impacts of climate change, according to the IISD summary.

But a dozen developing countries – with India, Saudi Arabia and China being the most vocal – opposed speeding up the process, arguing that more time is needed to ensure greater inclusion of experts and research from the Global South, which would result in “robust and rigorous” scientific output.

South Africa, Russia, Kenya, Algeria, Burundi, Congo, Jordan, Libya and Venezuela expressed similar views, according to IISD.

More time for more voices

India said that “producing the best science needs time, haste leads to shoddy work”, while Saudi Arabia claimed that the shortened timeline would “lead to incomplete science and would be a disservice to the world”, according to the IISD summary of the discussions.

Kenya’s Kimutai told Climate Home that producing scientific literature and reviewing submissions takes a lot of time and, unlike their counterparts in richer countries, scientists in the Global South can rarely count on the help of junior researchers at well-funded institutions.

“We love this process – we find it important,” she added, “but we’re trying to say that, while it may be an easy process in other regions, it is not for us”.

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The IPCC has long struggled with ensuring adequate representation of expert voices from the Global South. Only 35% of the authors working on its sixth and latest assessment report hailed from developing countries, according to a study published in the journal Climate, up from 31% in the previous cycle.

In Sofia, several delegates pointed out that the IPCC is working to improve inclusivity and that a slight extension of the schedule would not be the solution. Similar views were aired by forty IPCC authors from developing countries in a letter circulated ahead of last week’s talks, urging countries to ensure that the reports are ready in time for the global stocktake.

While recognising concerns over the inclusion of under-represented communities, they argued that it would not be achieved by allowing more time but through “deliberate efforts to counterbalance long-standing inequalities” in the research world.

Writing for Climate Home, Malian scientist Youba Sokona, one of the letter’s authors, warned that the IPCC risks losing its relevance and influence over global climate policy-making if its output cannot be used in the global stocktake.

IPCC Chair Jim Skea gavels the session to a close. Photo: Photo by IISD/ENB | Anastasia Rodopoulou

Despite lengthy exchanges, scientists in Sofia could not find a solution and decided to postpone a decision on the timeline until the next IPCC session in February 2025, when countries will also need to agree on the outline of the reports’ content.

Kenya’s Kimutai has proposed a compromise that would see reports on adaptation and mitigation completed in time for the global stocktake, with a third on the physical science of climate change coming in later.

Richard Klein, a senior researcher at the Stockholm Environment Institute (SEI) and a lead author of previous IPCC reports, told Climate Home the ongoing row was “problematic”. “With these delays, a shorter [report] cycle in time for the global stocktake may not be feasible anymore, which in turn makes it less likely we will see ambitious nationally-determined contributions (NDCs) after that process,” he warned.

Expert scientists from the IPCC will meet again this December at a “scoping” session to sketch out a framework for what the assessment reports should include.

Barbosa of Timor-Leste is worried that those discussions will also become “heavily politicised”.

“We are concerned that high-emitting developing countries will try water down the work on emission-cutting measures and keep out strong messages on things like the need to phase out fossil fuels,” he told Climate Home.

(Reporting by Matteo Civillini; editing by Megan Rowling)

The post IPCC’s input into key UN climate review at risk as countries clash over timeline appeared first on Climate Home News.

Calling for global action to limit the devastating consequences, the head of the United Nations said “billions of people are facing an extreme heat epidemic – wilting under increasingly deadly heatwaves”.

Extreme-heat events have been getting more frequent, intense and longer-lasting in recent decades as a result of human-made climate change.

Guterres’ appeal comes as the record for the world’s hottest day was broken twice on consecutive days this week, according to Europe’s Copernicus Climate Change Service. Monday beat Sunday, with the global average surface air temperature reaching 17.16 Celsius, as parts of the world sweltered through fierce heatwaves from the Mediterranean to Russia and Canada.

Guterres said the UN had just received preliminary data indicating that Tuesday “was in the same range”, which would make a third hottest straight day on record, if confirmed.

In a speech, he noted that heat – driven by “fossil fuel-charged, human-induced climate change” – is estimated to kill almost half a million people a year, about 30 times more than tropical cyclones.

United Nations Secretary-General Antonio Guterres speaks during the United Nations Climate Change Conference (COP28) in Dubai, December 1, 2023. COP28/Christophe Viseux/Handout via REUTERS

This year alone, extreme heat struck highly vulnerable communities across the Sahel region, killed at least 1,300 pilgrims in Mecca during Hajj and shut down schools across Asia and Africa affecting more than 80 million children.

“And we know it’s going to get worse. Extreme heat is the new abnormal,” Guterres added in his speech to journalists at UN headquarters in New York.

The Secretary-General’s “call for action” brings together ten specialised UN agencies for the first time in an urgent and concerted push to strengthen international cooperation in addressing extreme heat.

Focus on most vulnerable

Guterres listed four areas where greater efforts could be made to keep people, societies and economies safer from the negative consequences of rising global temperatures.

He emphasised the importance of “caring for the most vulnerable” – with those at greatest risk including poor people in urban areas, pregnant women, people with disabilities, the elderly, children, those who are sick and people who are displaced from their homes.

Households living in poverty often live in substandard homes without access to cooling, he added, appealing for a boost in access to low-carbon cooling and expanded use of natural measures – which include planting trees for shade – and better urban design, alongside a ramp-up of heat warning systems.

Graphic from Lancet Countdown on Health and Climate Change

Workers also need more protection, he said, as a new report from the International Labour Organization warned that over 70 percent of the global workforce – 2.4 billion people – are now at high risk of extreme heat, especially in Asia-Pacific, Africa and the Arab States.

The UN is calling on governments to urgently review laws and regulations on occupational safety and health to integrate provisions for extreme heat, including the right to refuse working in extreme hot weather.

Energy transition and adaptation

A third area targeted by the UN for action is making economies and societies better able to withstand heat, through stronger infrastructure, more resilient crops, and efforts to ease the pressure on health systems and water supplies.

“Countries, cities, and sectors need comprehensive, tailored Heat Action Plans, based on the best science and data,” Guterres said.

Lastly, the UN chief urged stepped-up action to “fight the disease”, by phasing out fossil fuels “fast and fairly” including no new coal projects, with the aim of limiting global warming to 1.5C – a goal nearly 200 governments signed up to in the 2015 Paris Agreement.

“I must call out the flood of fossil fuel expansion we are seeing in some of the world’s wealthiest countries,” he emphasised. “In signing such a surge of new oil and gas licenses, they are signing away our future.”

The United States, Canada, Australia, Norway and the UK have issued two-thirds of the global number of oil and gas licences since 2020, according to research published by the International Institute for Sustainable Development this week.

‘Still time to act’

Commenting on the UN’s call to action, Alan Dangour, director of climate and health at Wellcome, a UK-based science foundation, noted that people working outside in physical jobs and those who cannot afford to adapt to rising heat are particularly exposed – but the effects are far broader.

“The levels of heat we now routinely see around the world put every part of society under extreme pressure, directly harming our health while also affecting food and water security and much of our vital infrastructures,” he said in a statement.

Speaking to journalists on Thursday, scientists convened by Wellcome said there are positive measures that can be taken to combat the problem of extreme heat, which can also bring wider social benefits.

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For example, they explained that using community facilities as cooling centres can offer older people a place to chat or play cards, tackling social isolation and heat stress at the same time. Or adding shades with solar panels to market stalls can help women traders keep working on hot days while also providing free electricity for their businesses.

“There is still time for concerted action to save lives from the impacts of climate change, but we can no longer afford to delay,” Dangour said.

A construction worker drinks water while working on a building during hot weather in Pristina, Kosovo, June 19, 2024. (Photo: REUTERS/Valdrin Xhemaj)

The UN’s call for action points out that existing tools to reduce the devastating consequences of extreme heat could be deployed with large and far-reaching effects. Guterres said the good news is that “there are solutions… that we can save lives and limit its impact”.

For example, a global scale-up of heat health warning systems could save more than 98,000 lives every year, according to the World Health Organization. And the rollout of occupational safety and health measures could avoid $361 billion a year in medical and other costs, the ILO has estimated.

The UN chief urged a “huge acceleration of all the dimensions of climate action” as global warming is currently outpacing efforts to fight it. That could start to change, he added, as heatwaves, impacts on public health and disasters such as Canada’s wildfires are now hitting the richest countries as well as poorer ones.

“The heat is being felt by those that have decision-making capacity – and that is my hope,” he said.

(Reporting and editing by Matteo Civillini and Megan Rowling)

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Environmental advocacy group Stand.earth accused the Vancouver-based apparel company of greenwashing in a “first-of-its-kind complaint” submitted to the French Directorate General for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF) days before the Olympics Games opening ceremony in Paris.

Stand.earth has called on the French regulator to investigate Lululemon’s “vague, disproportionate and ambiguous” environmental claims which, the green group said, constitute misleading commercial practices. In response, the company told Climate Home its publicity does not misrepresent its operations.

Through its “Be Planet” campaign unveiled in 2020, Lululemon tells customers that its “products and actions avoid environmental harm and contribute to restoring a healthy planet”.

A screengrab from Lululemon’s sustainability webpage

But the company’s latest impact report shows that emissions from Lululemon’s full supply chain – known as Scope 3 – nearly doubled to 1.2 million tonnes of carbon dioxide between the campaign’s launch and 2022. That’s equivalent to powering 300,000 gasoline cars for a year.

Stand.earth’s complaint said Lululemon’s emissions are set to grow even further as it tries to hit a goal of doubling sales by 2026.

“Lululemon customers worldwide deserve to know the true impacts of the company’s climate pollution, not the greenwashed version it uses to sell products,” said Stand.earth Executive Director Todd Paglia.

UAE’s ALTÉRRA invests in fund backing fossil gas despite “climate solutions” pledge

Earlier this year, Stand.earth filed a similar complaint against Lululemon in Canada that resulted in the country’s Competition Bureau opening a formal investigation into the retailer’s use of environmental claims. A separate complaint accusing Lululemon of greenwashing was brought in early July this year by a private citizen in the US District Court for the Southern District of Florida.

A spokesperson for Lululemon said that Be Planet “is not a marketing campaign” but “a pillar” of the company’s impact strategy, and that the firm is confident the statements it makes to the public accurately reflect its impact goals and commitments.

“We are taking direct action and are committed to collaborating with industry partners to help address supply chain impacts on climate change,” the spokesperson added. “We welcome dialogue and remain focused on driving progress.”

Rising revenues, rising emissions

Lululemon is one of the world’s fastest-growing retailers of athletic apparel, with net revenues rising 19% to $9.6 billion in 2023. The company, which has more than 700 stores in 20 countries, is the official clothing provider for Team Canada at the Olympic Games whose opening ceremony takes place in Paris this Friday.

According to the International Olympic Committee (IOC), the Paris 2024 Games are targeting a 50 percent reduction in carbon emissions compared to the average of the London Olympics in 2012 and Rio de Janeiro in 2016, including Scope 3 emissions such as from spectator travel. This means Paris 2024 will offer the first Olympic Games aligned with the Paris Agreement on climate change, the IOC says.

View of Lululemon name above its retail store in the SoHo neighborhood of Manhattan, New York, NY, August 2, 2023. (Photo by Anthony Behar/Sipa USA)

Lululemon, meanwhile, has committed to reaching net zero emissions across its supply chain by 2050 through a target validated by the Science Based Targets initiative (SBTi), widely seen as the gold standard in corporate accountability.

But the company has come under intense criticism from green advocates over its climate and environmental impacts caused by energy-intensive production, high consumption of natural resources like water and long-distance shipping of items around the globe.

Four-fifths of Lululemon’s manufacturers in 2022 were located in countries that are highly-dependent on fossil fuels like Vietnam, Cambodia, Sri Lanka and Indonesia. The materials most commonly used by Lululemon in its clothes – polyester and nylon – are themselves produced from fossil fuels, according to the Stand.earth complaint.

EU greenwashing crackdown

The environmental group said the case will mark the first test of the French regulator’s readiness for a wave of new European greenwashing legislation.

The European Parliament approved a new directive in January requiring member states to introduce stricter rules surrounding the use of sustainability claims by companies and banning certain practices.

European lawmakers are currently working on a further piece of legislation that aims to define what kind of information companies must provide to justify their green marketing in the future. In its current form, the proposed regulation would require sustainability claims to be based on scientific evidence and checked by an independent and accredited verifier.

A global wealth tax is needed to help fund a just green transition

The so-called “Green Claims” directive is currently going through a negotiation process between the European Parliament and the European Council – which brings together EU leaders – before a final text is agreed.

“For decades, companies have faced no consequences for deceptive practices aimed at misleading the public about their environmental and climate justice impacts,” said Stand.earth’s Paglia. “However, we’re now seeing a rising interest in holding these companies accountable for their claims, and a crackdown is beginning to happen from Europe to North America.”

(Reporting by Matteo Civillini; editing by Megan Rowling)

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ALTÉRRA was billed as the world’s largest private investment vehicle to “focus entirely on climate solutions”. COP28 President Sultan Al-Jaber hailed its launch as “a defining moment” for creating a new era of international climate finance.

Yet four months later, one of the initial funds ALTÉRRA backed with a $300-million commitment agreed to buy a major fossil gas pipeline in North America, Climate Home has discovered.

In March, BlackRock’s “Global Infrastructure Fund IV” acquired half of the 475 km-long Portland Natural Gas Transmission System, with Morgan Stanley taking the rest in a deal worth $1.14 billion overall.

That acquisition would not have come as a surprise to the fund’s investors.

When US-based BlackRock pitched it to the State of Connecticut’s Investment Advisory Council back in 2022, the world’s biggest asset manager gave a flavour of where their money would likely end up. Its presentation – seen by Climate Home – featured a list of “indicative investments” including highly-polluting sectors such as gas power plants and transportation networks, liquefied natural gas (LNG), airports, terminals and shipping.

Climate Home does not know whether ALTÉRRA saw the same presentation, nor did the UAE firm respond directly to a question asking if it was aware before the COP28 announcement that the BlackRock fund might invest in those sectors.

An ALTÉRRA spokesperson told Climate Home its “investments seek to build the energy systems of tomorrow, while supporting the transition of existing energy infrastructure towards a just and managed clean energy ecosystem”.

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In addition to the gas pipeline, BlackRock’s infrastructure fund has so far invested in carbon capture, waste management, utilities maintenance services, telecom infrastructure, data centres and the production of industrial gases, according to regulatory filings, a BlackRock job advertisement and press reports accessed by Climate Home.

A BlackRock spokesperson said its global infrastructure fund franchise “targets investments in solutions across the energy transition value chain, driven by the long-term trends of decarbonization, decentralization, and digitalization to support the stability and affordability of energy supply around the world”.

Andreas Sieber, associate director of global policy and campaigns at climate advocacy group 350.org, said Climate Home’s findings “confirm our worst fears”. “The ALTÉRRA fund uses a masquerade of green progress while funnelling investment into fossil fuel pipelines and gas projects, which are the biggest causes of the climate crisis,” he told Climate Home.

Climate finance is a hot topic at UN negotiations, with countries expected to set a new global goal at COP29 in Baku, Azerbaijan, this November, amid persistent calls for higher amounts to help poorer nations boost clean energy production.

The COP28 presidency said last year that ALTÉRRA would “drive forward international efforts to create a fairer climate finance system, with an emphasis on improving access to funding for the Global South”. Al-Jaber added that “its launch reflects… the UAE’s efforts to make climate finance available, accessible and affordable”.

But the sparse details provided at the time prompted climate justice activists to question the real impact it would have in countries that most need financial support to adopt clean energy and adapt to a warming world. Only about a sixth of the fund – $5 billion – was earmarked as “capital to incentivize investment into the Global South”.

Follow the money

ALTÉRRA is a so-called ‘fund of funds’. Instead of directly investing money in individual companies or assets, it puts its cash into a series of funds run by other investment firms. At COP28, it committed a total of $6.5 billion to funds managed by BlackRock, Brookfield and TPG, without setting out how the remaining $23.5 billion would be spent.

Since then, ALTÉRRA has not announced any further investments. Its chief executive, Majid Al Suwaidi, told Bloomberg this month that the fund is “actively planning the next phase of allocations”, without giving further details.

The launch of #ALTÉRRA marks the start of three unique alliances with global asset managers, @Brookfield, @BlackRock, and @tpg.

Together, we share the same vision, to bridge the climate investment gap and finance a new climate economy. pic.twitter.com/7yEXOyZqpK

— ALTÉRRA (@Alterrafund) December 1, 2023

Most of the funds picked by ALTÉRRA remain at an early stage and have yet to announce completed transactions or are still trying to raise more capital from investors. The most notable exception is BlackRock’s fourth Global Infrastructure Fund. By the time it won the $300-million commitment from ALTÉRRA in Dubai, the vehicle was ready to deploy its money.

ALTÉRRA told Climate Home its investment in the BlackRock vehicle is in line with its goals of getting climate finance “flowing quickly and at scale” and of partnering “with funds that invest in the energy transition and accelerate pathways to net-zero”.

Announcing its first $4.5-billion closing in October 2022, BlackRock said the fund would “continue to target investments in climate solutions, while also supporting the infrastructure needed to ensure a stable, affordable energy supply during the transition”.

In private conversations with potential investors, the asset manager spelled out more clearly what that meant.

Its presentation to the State of Connecticut in December 2022 showed that the fund would not only invest in things like renewable energy, electrification and battery storage, but also in fossil gas power plants and pipelines, LNG and transportation infrastructure like airports, shipping and terminals.

A slide from BlackRock’s presentation of the Global Infrastructure Fund IV to investors

In line with this strategy, BlackRock agreed a deal this March for its Global Infrastructure Fund IV to acquire half of the Portland Natural Gas Transmission System (PNGT), a fossil gas pipeline stretching from the Canadian border across New England in the United States to Maine and Massachusetts.

When it began operations in 1999, the pipeline helped shift New England’s power generation away from coal and oil, but it has also created a stronger dependency on fossil gas, leaving citizens vulnerable to price spikes. The region is now planning to accelerate the rollout of renewable energy sources.

Comment: To keep its profits, Big Oil stole our future

The PNGT was not the first fossil fuel infrastructure the BlackRock team behind the Global Infrastructure Fund had snapped up. In a written testimony submitted this March to the State of New Hampshire, a senior executive listed a dozen oil and gas pipelines backed by earlier rounds of the fund. They included one operated by ADNOC, the UAE state-owned oil company whose CEO is Sultan Al-Jaber, COP28 president and chair of ALTÉRRA’s board.

Responding to Climate Home’s findings on where ALTÉRRA’s money is going, Mohamed Adow, director of Nairobi-based think-tank Power Shift Africa, said it is “extremely concerning to see a fund hailed by a COP president as a solution to the climate crisis investing in fossil fuels”.

“This needs to be a wake-up call to the world that these funds created by COP hosts are little more than PR stunts designed to greenwash the activities of fossil fuel-producing nations,” he added.

Oil-backed carbon capture

BlackRock does not disclose the infrastructure fund’s complete portfolio, but it has invested another $550 million in Stratos, the world’s biggest direct air capture (DAC) project being developed in a joint venture with oil giant Occidental. The plant under construction in Texas promises to suck as much as 500,000 tonnes of carbon dioxide out of the atmosphere annually and bury it underground.

Its proponents see DAC as a key technology to balance out emissions in the race to achieve net zero by 2050, although so far it remains expensive and largely unproven at scale. Stratos won a grant from the US government to fast-track the construction of the facility, and it has struck deals to sell carbon offsets generated in future from the plant with corporate giants like Amazon.

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When the DAC partnership was announced last November, BlackRock CEO Larry Fink said Stratos “represents an incredible investment opportunity for BlackRock’s clients… and underscores the critical role of American energy companies in climate technology innovation”.

But Stratos’ critics have questioned Occidental’s motivations and dismissed its DAC investments as a greenwashing ploy to keep pumping oil and slow down the transition away from fossil fuels.

“We believe that our direct capture technology is going to be the technology that helps to preserve our industry over time,” Vicki Hollub, Occidental’s chief executive, told the CERAWeek energy industry conference last year. “This gives our industry a license to continue to operate for the 60, 70, 80 years that I think it’s going to be very much needed.”

Call for safeguards

While BlackRock’s infrastructure fund deploys its cash largely in the Global North, ALTÉRRA’s promised investments in developing countries are still taking shape.

Brookfield in June launched a new “Catalytic Transition Fund” backed by ALTÉRRA with a $1-billion commitment. The fund’s stated focus is “directing capital into clean energy and transition assets in emerging economies”.

Climate Home asked ALTÉRRA if it had adopted any exclusion policies that would, for example, rule out investment in certain types of fossil fuels.

The UAE fund did not respond to the question, but a spokesperson said its investment approach is aligned with the goal “of accelerating the climate transition, with a focus on clean energy, industry decarbonization, sustainable living, and climate technologies”.

Climate activists protest against fossil fuels during COP28 in Dubai in December 2023. REUTERS/Thomas Mukoya

350.org’s Sieber called on Al-Jaber – who was widely criticised by green groups for his dual role as president of COP28 and head of a fossil fuel corporation – to “act swiftly to enforce stringent safeguards” for ALTÉRRA’s investments.

“The UAE is on the brink of losing the little credibility it still has left in addressing the urgency of the climate emergency,” Sieber added. “The world, especially communities who are being hit the hardest by climate impacts every day, cannot afford to have one more cent invested in fossil fuels.”

The key question now is whether Azerbaijan – the host of COP29 and itself a substantial producer and exporter of oil and gas – will do things differently. Last week, it announced a new voluntary fund that it said will invest at least $1 billion for emissions reduction projects in developing countries. Baku is hoping to secure contributions for it from fossil-fuel producing nations and companies.

Power Shift Africa’s Adow said developing countries need state-backed climate finance from rich nations, negotiated through the UN climate process, and “not just cooked up in voluntary schemes”. That funding “can be used where the need is greatest, not just where it might make most money for some private profit-seeking businesses,” he added.

(Reporting by Matteo Civillini; fact-checking by Sebastián Rodríguez; editing by Megan Rowling and Sebastián Rodríguez)

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“The level of damage is apocalyptic,” said Henrietta Elizabeth Thompson from Barbados, among the countries worst hit by the natural disaster, at the start of the four-day session in Incheon, South Korea.

The board needs to create a fund that “reflects the scale of the magnitude, of the risk, the damage and devastation faced by people across the world and the urgency required to respond to it,” she added.

But before the fund starts handing out any money in future, board members have to agree on procedural matters.

A name and a place

On the opening day, the Philippines was picked as the host of the fund’s board in a secret vote by members. The Southeast Asian nation defeated bids from seven other candidates: Antigua and Barbuda, Armenia, Bahamas, Barbados, Eswatini, Kenya and Togo. 

Selecting a host country was one of the most pressing priorities for this week’s meeting. It represented a first necessary step for the board to take up a legal personality and enter into formal agreements with the World Bank, set to host the loss and damage fund on an interim basis. 

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While the administrative staff of the fund will be based at the World Bank, the board will carry out some of its meetings in the Philippines in the future, likely in the capital Manila. The country’s proposal scored particularly high thanks to its abundant transport options and accommodation facilities and its visa free entry for short stays for most visitors, according to a background paper. 

A man stands in a home where the roof was ripped apart, in the aftermath of Hurricane Beryl, in St. Elizabeth Parish, Jamaica, July 5, 2024. REUTERS/Maria Alejandra Cardona

The somewhat thorny issue of what to officially call the fund also landed on the table in South Korea. 

For nearly all climate talks participants, it’s simply been the “loss and damage fund” since it was adopted at COP27, but the United States have made various attempts at a rebrand. At COP28 in Dubai, for example, then U.S. climate envoy John Kerry kept referring to the “fund for climate impact response” – a more neutral label that softened the suggestion of developed countries’ historical responsibility. 

In consultations ahead of the meeting, the co-chairs of the board collected various options, from the minimalistic “the Fund” to the highly technocratic “Fund referred to in decisions 1/CP.28 and 5/CMA.5”.

Ultimately, members decided to go with “Fund for responding to Loss and Damage”, abbreviated as FLD, without spending much time debating the matter. 

Beware the ‘billions’

Divisions cropped up when the discussion turned to the process of selecting the executive director (ED). Hoping to announce the name of the executive director at COP29 this November, the board had to agree at this session on the criteria for picking the fund’s boss, including the roles and responsibilities.

Several board members from developing countries wanted the ED’s job description to mention efforts to find additional money for the fund at the scale of billions. “If you have someone running a fund of 100 million, this is totally different from 10 billion, 55 billion, or 100 billion,” said Egypt’s Mohamed Nasr, “the scale of this fund is not confined to where it is”.

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Countries have pledged around $700 million to the fund so far, with Italy, Germany, France and the United Arab Emirates among the biggest contributors. The United States has pledged only $17.5 million. South Korea pledged $7 million at this week’s meeting. The residual costs from loss and damage is projected to reach a total of $290 billion to $580 billion by 2030, according to a 2018 study.

But some developed country board members, including the US, rejected the proposal of including a reference to “billions”, according to observers.

“It is clear that developed nations…remain non-committal about scaling financial mobilisation,” said Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative, who attended the meeting. “The initial commitments of a few hundred million dollars are merely a drop in the ocean compared to the real and escalating costs of climate change that developing countries endure,” he added.

Eventually, board members found a compromise wording. The ED will be asked to lead efforts to grow the fund’s resources “towards contributing to a response at scale to respond to climate-induced loss and damage”.

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The recruitment process will now go underway with the goal of putting a shortlist of candidates in front of the board by the next meeting scheduled for September 18-20 in Baku, Azerbaijan.

Legal agreements

Between now and then, there will be little time for a summer break.

After approving last June the conditions of hosting the fund, the World Bank now has until August 12 to share with board members the draft text of the agreements detailing how that will work in practice. It will include things like provisions to handle the money and give access to recipients and the rules governing the relationship between the board and the World Bank.

Developing countries and civil society groups are eager to see guarantees that communities in hard-hit countries will be able to access funds directly without going through various intermediary agencies.

“Agreeing and certifying these agreements will be the most important decision at the next board meeting”, said Liane Schalatek, associate director of the Heinrich Böll Foundation in Washington who attended the board meeting. “The World Bank has shared an outline of what they will include, but we are talking about legal agreements so the devil is in the detail”.

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European investors hold shares worth at least $65 million in major coal firms across China, India, the United States, Indonesia and South Africa within funds designated as “promoting environmental and social” goals under EU rules, an analysis by Climate Home and media partners found.

Taken together, these companies emit around 1,393 million tonnes of carbon dioxide (CO2) into the atmosphere every year, putting them among the world’s top five polluters if they were a country.

The investments are owned by major financial firms including BlackRock, Goldman Sachs and Fideuram, a subsidiary of Italy’s largest bank Intesa Sanpaolo. Most firms analysed are signatories of the Glasgow Financial Alliance for Net Zero (GFANZ), whose members pledge to align their portfolios with climate-friendly investment.

The asset managers told Climate Home their coal holdings do not contradict EU green policies or the 2015 Paris Agreement to tackle climate change.

At the COP26 UN climate summit in Glasgow in 2021, countries agreed for the first time to accelerate efforts “towards the phase-down of unabated coal power”. “Unabated” means power produced using coal without any technology to capture, store or use the planet-heating CO2 emitted during the process.

But rather than shrinking, global coal capacity has grown since the signing of the Glasgow Climate Pact with a fleet of new coal plants firing up their boilers, primarily in China, India and Indonesia. Coal miners in those countries have also boosted their operations to keep up with the increasing demand.

European leaders have heavily opposed this, with EU president Ursula von der Leyen saying the bloc is “very worried” about coal expansion in China.

“Light green” funds

The investments analysed by Climate Home have been made by funds classified under Article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR), which the European Commission hoped would discourage greenwashing and promote sustainable investments when it was introduced in 2021.

Article 8 – known as ‘light green’ – refers broadly to a fund that has “environmental and social characteristics”, while the ‘dark green’ Article 9 refers more directly to sustainability.

The rules were also intended to offer members of the public more clarity on where asset managers invest their money and enable them to make an informed decision on whether they want their savings or pension pots to prop up climate-harming activities.

Workers shovel coal onto a truck at a coal yard near a coal mine in Huating, Gansu province, China. REUTERS/Thomas Peter

But a group of European financial market watchdogs warned this month the rules are having the opposite effect and called for an overhaul of the system.

“Status as ‘Article 8’ or ‘Article 9’ products have been used since the outset in marketing material as ‘quality labels’ for sustainability, consequently posing greenwashing and mis-selling risks,” they said in a joint opinion to the European Commission.

“The general public is still being misled when it comes to sustainable funds,” Lara Cuvelier, a sustainable investments campaigner at Reclaim Finance, told Climate Home. “The regulations are very weak and there is no clear criteria as to what can or cannot be included. It’s still in the hands of investors to decide that for themselves.”

Funding coal expansion

Climate Home identified investments in the biggest-polluting companies in the coal sector as part of a wider investigation led by Voxeurope, which tracked holdings by funds that disclose information under the EU’s sustainable finance directive.

These “green” funds include investments in mining companies like Coal India and China Shenhua – the respective countries’ top coal producers – and Indonesia’s Adaro Energy, as well as in giant coal power producers such as NTPC in India and China Resources Power Holdings.

All of these companies are planning large-scale expansions of their coal output, according to the influential Global Coal Exit List compiled by German NGO Urgewald.

No new coal mines, mine extensions or new unabated coal plants are needed if the world is to reach net zero emissions in the energy sector by 2050 and keep the 1.5C warming limit of the Paris Agreement “within reach”, according to projections by the International Energy Agency (IEA).

State-owned Coal India is the world’s largest coal producer, with fast-growing output topping 773 million tonnes in the latest financial year. It is targeting 1 billion tonnes of annual coal production by 2025-26 by opening new mines and expanding dozens of existing ones.

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In its latest annual report, Coal India cited “pressure of international bodies like [the] UN to comply with [the] Paris Agreement” as one of the main threats to its business. Coal India’s share value has more than doubled over the last 12 months on the back of stronger coal demand in the country, as extreme heatwaves have fuelled the use of air-conditioning among other factors.

State-run mining and energy giant China Shenhua plans to invest over $1 billion in 2024 to expand its fleet of coal power stations and build new coal mines. “We will keep a close eye on climate change to improve the clean and efficient use of coal,” its latest annual report said.

Big investors

The funds with stakes in those coal-heavy companies are managed by Fideuram, an arm of Italy’s largest bank Intesa Sanpaolo, US-based AllianceBernstein and Mercer, a subsidiary of the world’s largest insurance broker Marsh McLennan.

Coal investments in Fideuram’s Article 8 funds – worth at least $16 million – also appear to breach the company’s own coal exclusion policy, designed to rule out holding shares in certain coal firms.

Two of its flagship “emerging markets” funds claim to promote environmental and social characteristics including “climate change prevention” and the “reduction of carbon emissions”, according to information disclosed under EU rules. To achieve their ‘green’ objectives, the funds claim to exclude any investment in companies “deriving at least 25% of their revenues” from the extraction, production and distribution of electricity connected with coal.

But Climate Home found the funds include investments in at least six major coal companies exclusively or primarily involved in coal mining or power generation.

A coal-fired power plant under construction in Shenmu, Shaanxi province, China, in November 2023. REUTERS/Ella Cao

Fideuram did not answer Climate Home’s questions about the funds’ apparent breach of their own policy. But a company spokesperson said in a written statement that “investments in sectors with high-carbon emissions do not conflict with the objectives of the SFDR, which concern the transparency of sustainability investments, nor with the Paris Agreement, which promotes a transition to a low-carbon economy”.

A spokesperson for Mercer said its Article 8 fund, which holds shares in NTPC and China Resources Power Holdings. has an exclusion policy to avoid investing in companies that generate more than 1% of their revenue from thermal coal extraction. “Based on the data provided by ISS [a provider of environmental ratings], no groups involved breach the 1% threshold, and therefore, the fund is not in violation of its SFDR commitments,” they added.

AllianceBernstein did not respond to a request for comment.

Coal-hungry steelmaking

While excluding investments in so-called thermal coal used for electricity generation, several ‘green’ funds put their money in companies producing coking coal – or metallurgical (met) coal – which is used to make steel.

Goldman Sachs’ Article 8 funds hold shares worth several million dollars in Jastrzebska Spolka Weglowa, Europe’s largest coking coal producer, and Shanxi Meijin in China. BlackRock offers exchange-traded funds (ETFs) tracking indexes that include investments in SunCoke, a leading met coal producer in the US and Brazil, Alabama-based Warrior Met and Shanxi Meijin.

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Reclaim Finance’s Cuvelier said that, up until recently, the focus has been on pushing thermal coal out of investor portfolios because the alternatives to met coal in steel production were “less developed”.

“There are now increasing calls on financial institutions to cover met coal as well in their exclusion policies as alternatives exist,” she added. “It’s becoming very important because there are new projects under development that should be avoided”.

A spokesperson for BlackRock said: “As a fiduciary, we are focused on providing our clients with choice to meet their investment objectives. Our fund prospectuses and supporting material provide transparency as to the methodology and investment objectives of each fund”.

Goldman Sachs did not reply to a request for comment.

Reforms on the horizon

At the end of 2022, the European Commission began a review of the SFDR’s application with a view to updating its sustainable finance rules.

Future reforms may include changes to the ways funds are categorised. “There are persistent concerns that the current market use of the SFDR as a labelling scheme might lead to risks of greenwashing… partly because the existing concepts and definitions in the regulation were not conceived for that purpose,” the Commission said in a consultation paper released last year.

It also indicated that the existing categories under Articles 8 and 9 could either be better defined or scrapped entirely and replaced with a different system. The new Commission, yet to be formed following last month’s elections, will decide if and how to move forward with the reform process.

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Separately, the EU’s market supervisory authority, ESMA, has recently issued guidelines to prevent funds from misusing words like “sustainability”, “ESG” – environmental, social and governance – or “Paris-aligned” in their names. A handful of the funds with coal investments analysed by Climate Home have used those labels.

Under the new guidelines, asset managers wanting to slap climate-friendly labels on their funds will have to exclude companies that derive more than a certain percentage of revenues from fossil fuels.

Climate Home produced this article with data analysis contributions from Stefano Valentino (Bertha Fellow 2024) and Giorgio Michalopoulos. This article is part of an investigation coordinated by Voxeurop and European Investigative Collaborations with the support of the Bertha Challenge fellowship.

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In the closing session of the two-week talks on Thursday evening, many countries expressed their disappointment and frustration at the lack of any outcome on the Mitigation Ambition and Implementation Work Programme (MWP), noting the urgency of stepping up efforts to curb greenhouse gas pollution this decade.

The co-chairs of the talks said those discussions had not reached any conclusion and would need to resume at the annual climate summit in Azerbaijan in November, unleashing a stream of disgruntled interventions from both developed and developing countries.

Samoa’s lead negotiator Anne Rasmussen, speaking on behalf of the Alliance of Small Island States (AOSIS), emphasised that “we really can’t afford these failures”. “We have failed to show the world that we are responding with the purpose and urgency required to limit warming to 1.5 degrees,” she said.

Anne Rasmussen of Samoa, speaking on behalf of the Alliance of Small Island States (AOSIS). Photo: IISD/ENB – Kiara Worth

Governments, from Latin America to Africa and Europe, lamented the lack of progress on the MWP because of its central role in keeping warming to the 1.5C temperature ceiling enshrined in the Paris Agreement.

Current policies to cut emissions are forecast to lead to warming of 2.7C, even as the world is already struggling with worsening floods, droughts, heatwaves and rising sea levels at global average temperatures around 1.3C higher than pre-industrial times.

Mitigation a taboo topic?

Despite the clear need to act fast, a deep sense of mistrust seeped into talks on the MWP in Bonn, with negotiators disagreeing fundamentally over its direction, according to sources in the room.

Developed countries and some developing ones said that the Like-Minded Group of Developing Countries (LMDCs), led primarily by Saudi Arabia and China, as well as some members of the African Group, had refused to engage constructively in the discussions.

“The reason is that they fear this would put pressure on them to keep moving away from fossil fuels,” an EU delegate told Climate Home.

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Bolivia’s Diego Pacheco, speaking on behalf of the LMDCs, rejected that view in the final plenary session, while describing the atmosphere in the MWP talks as “strange and shocking”. He also accused developed countries of trying to bury data showing their emissions will rise rather than fall over the course of this decade.

The EU and Switzerland said it was incomprehensible that a body charged with cutting greenhouse gas emissions had not even been allowed to discuss them.

“Mitigation must not be taboo as a topic,” said Switzerland’s negotiator, adding that otherwise the outcome and credibility of the COP29 summit would be at risk.

Rows over process

Before MWP negotiations broke down in Bonn, its co-facilitators – Kay Harrison of New Zealand and Carlos Fuller of Belize – had made a last-ditch attempt to rescue some semblance of progress.

They produced draft conclusions calling for new inputs ahead of COP29 and an informal note summarising the diverging views aired during the fraught exchanges. For many delegates, the adoption of those documents would have provided a springboard for more meaningful discussions in Baku.

But the LMDC and Arab groups refused to consider this, arguing that the co-facilitators had no mandate to produce them and calling their legitimacy into question – a claim rebutted by the UN climate secretariat, according to observers. Frantic efforts to find common ground ultimately came to nothing.

A session of the Mitigation Work Programme in Bonn. Photo: IISD/ENB – Kiara Worth

Fernanda de Carvalho, climate and energy policy head for green group WWF, said the MWP discussions must advance if the world is to collectively reduce emissions by 43% by 2030 and 60% by 2035 from 2019 levels, as scientists say is needed.

The MWP should be focused on supporting countries to deliver stronger national climate action plans (NDCs) – due by early next year – that set targets through to 2035, she said.

“Instead, we saw [government] Parties diverging way more than converging on hard discussions that never made it beyond process,” she added.

‘Collective amnesia’

Some developing countries, including the Africa Group, pushed back against what they saw as efforts by rich nations to force them to make bigger cuts in emissions while ducking their own responsibilities to move first and provide more finance to help poorer countries adopt clean energy.

Brazil – which will host the COP30 summit in 2025 – said the MWP was the main channel for the talks to be able to find solutions to put into practice the agreement struck at COP28 to transition away from fossil fuels in energy systems in a fair way.

But to enable that, “we have to create a safe environment of trust that will leverage it as a cooperative laboratory”, he said, instead of the “courthouse” it has become “where we accuse and judge each other”.

Observers in Bonn pointed to the absence of discussions on implementing the COP28 deal on fossil fuels, which was hailed last December as “historic”.

“It seems like we have collective amnesia,” veteran watcher Alden Meyer, a senior associate at think-tank E3G, told journalists. “We’ve forgotten that we made that agreement. It’s taboo to talk about it in these halls.”

‘Detour on the road to Baku’

After the exchange of views, UN Climate Change executive secretary Simon Stiell noted that the Bonn talks had taken “modest steps forward” on issues like the global goal on adaptation, increased transparency of climate action and fixing the rules for a new global carbon market.

“But we took a detour on the road to Baku. Too many issues were left unresolved. Too many items are still on the table,” he added.

The closing plenary of the Bonn Climate Change Conference. Photo: Lucia Vasquez / UNFCCC

Another key area where the talks failed to make much progress was on producing clear options for ministers to negotiate a new post-2025 climate finance goal, as developed countries refused to discuss dollar amounts as demanded by the Africa and Arab groups, among others.

Bonn talks on climate finance goal end in stalemate on numbers

Developing nations also complained about this in the final session, while others expressed their concern that a separate track of the negotiations on scientific research had failed to address the topic in a rigorous enough manner.

In his closing speech, Stiell reminded countries that “we must uphold the science”, and urged them to accelerate their efforts to find common ground on key issues well ahead of COP29.

The next opportunities to move forward on the new finance goal – expected as the main outcome from the Baku summit – will be a “retreat” of heads of delegations in July followed by a technical meeting in October, including a high-level ministerial dialogue on the issue.

But several observers told Climate Home that highly contentious issues – such as the size of the funding pot and the list of donors – are beyond the remit of negotiators and are unlikely to be resolved until the political heavyweights, including ministers, take them up in Azerbaijan in November.

Rising costs of climate crisis

“Business-as-usual is a recipe for failure, on climate finance, and on many other fronts, in humanity’s climate fight,” Stiell said. “We can’t keep pushing this year’s issues off into the next year. The costs of the climate crisis – for every nation’s people and economy – are only getting worse.”

Mohamed Adow, director of Kenya-based energy and climate think-tank Power Shift Africa, warned that “multiple factors are setting us up for a terrible shock at COP29″, saying this “ticking disaster threatens to undermine” the NDCs and in turn the 1.5C warming limit.

North Africa’s disappearing nomads: Why my community needs climate finance

In comments posted on X, formerly Twitter, Adow called for justice for those dying from the impacts of climate change such as extreme heat in India and Sudan in recent days, arguing that climate finance remains “a vital part in securing a safe and secure future for us all”.

But, he said, Bonn did not deliver a beacon of hope for vulnerable people. “Developing countries are expected to slay the climate dragon with invisible swords, having gotten zero assurances on the long-term finance they need,” he added.

(Reporting by Megan Rowling and Matteo Civillini, editing by Joe Lo)

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As discussions wrapped up on Tuesday, representatives of countries on both sides expressed disappointment with the process that is intended to result in an agreement on a new collective quantified goal (NCQG) at COP29 in Baku in November.

They will leave the German city with a 35-page informal “input paper” stuffed with wildly divergent views and repeatedly described as “unbalanced” by negotiators during the final session of the talks.

“It is time we get down to serious business,” said a negotiator from Barbados, pleading with colleagues to accelerate discussions before “more and more SIDS [small island developing states] and LDCs [least-developed countries] disappear from this gathering because we disappear from this planet”.

Show us the money

For most developing countries, the sticking point is the lack of negotiations on the size of the new goal – known as the “quantum” in technical language. Governments have already agreed that the new target should be set “from a floor of $100 billion per year” – the existing commitment – and should take into account “the needs and priorities of developing countries”.

Developing countries suggest rich nations tax arms, fashion and tech firms for climate

The Arab and the African groups landed their proposals for a new dollar amount on the table in Bonn – between $1.1 trillion and $1.3 trillion a year for the five years from 2025. Meanwhile, they accused rich states of failing to do the same and refusing to talk about numbers.

“We haven’t heard anything from them on their vision for the quantum,” said Egypt’s negotiator. “Every time there’s been [one] excuse or another why we couldn’t discuss quantum,” reiterated Saudi Arabia’s delegate.

Egypt’s negotiator Mohamed Nasr (middle) speaking with other delegates in Bonn. Photo: IISD/ENB – Kiara Worth

China echoed the same sentiment, but went further in its tirade against some developed countries. “We have been dealing with [a] few insincere and self-serving nations that have no intention of honoring international treaties,” the country’s negotiator said, referring to the 2015 Paris Agreement.

“We have no intention to make your number look good or be part of your responsibility as we are doing all we can to save the world,” he added, hinting at rich countries’ long-standing attempts to broaden the list of finance contributors to developing countries that are wealthier and more polluting.

‘A long way to go’

Developed countries accused their counterparts of entrenching their established positions instead of looking for areas of common ground.

Australia’s representative said the current document – which is not a negotiating text – shows “how much we disagree”. She added that there won’t be an agreement in Baku “if we engage in a game of striking out each other’s texts […] or a tug-of war”.

She expressed her government’s view that a numerical dollar target is “the star on the top of the Christmas tree” and should only be decided once the structure of the goal has been settled.

The UK’s negotiator noted that “we have a long way to go”, as “we are not in a process that will help us get to a final text”.

A delegate from the United States called for a “step change” in the process. “I feel most of what we’ve been doing is repeating views and not going into details on what folks mean,” he added.

No shortage of public money to pay for a just energy transition

Following the comments from developed nations, Saudi Arabia’s negotiator took to the floor again for the Arab Group. “I have to defend members of my group,” he said. “We are being gas-lit”.

It is now be up to the co-chairs of the talks to prepare a new informal document laying out a path forward based on the divergent views. The new paper will be sent to governments ahead of the next round of talks, which are yet to be scheduled.

“We encourage you to reach out to others using the inter-sessional period [between meetings] to discuss areas where you see fertile common ground,” said co-chair Zaheer Fakir in closing remarks. “Up until now we have not seen concrete efforts to reach out to your partners.”

(Reporting by Matteo Civillini and Joe Lo; editing by Megan Rowling)

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Their failure to meet the goal on time has been a sore point in the UN climate talks, fuelling distrust between wealthy governments and poorer countries, which have struggled to cover the cost of switching to cleaner energy and adapting to worsening climate change impacts.

According to the new data from the Organisation for Economic Co-operation and Development (OECD), developed countries provided and mobilised $115.9 billion in climate finance for developing countries in 2022, up from $89.6 billion in 2021.

OECD Secretary-General Mathias Cormann, a former Australian finance minister, said “exceeding” the annual commitment was “an important and symbolic achievement which goes some way towards making up for the two-year delay” and “should help build trust”.

The year-to-year increase of around 30% was the largest to date and was driven by significant funding increases from multilateral development banks – which contributed the most at $50.6 billion – individual governments and private finance mobilised by using public money to reduce investment risk.

Climate finance analysts criticised the quality of climate finance and the way the OECD calculates the figures.

Harjeet Singh, a veteran climate justice activist, said the process of providing and accounting for climate finance “is riddled with ambiguity and inadequacies” – a complaint long echoed by developing countries, which have called for more clarity and transparency on how the numbers are worked out.

“Much of the funding is repackaged as loans rather than grants and is often intertwined with existing aid, blurring the lines of true financial assistance,” said Singh.

The OECD report showed that in 2022, as in previous years, public climate finance mainly took the form of loans, which accounted for 69% or $63.6 billion. Not all of this lending was concessional, some was on market terms.

Grants, by contrast, made up just 28% of the total at $25.6 billion, with equity investments far smaller at $2.4 billion.

Development aid re-labelled?

Climate finance experts have also raised concerns over donor countries repurposing existing aid flows to meet the $100-billion target. A recent analysis by the Center for Global Development (CGD), a Washington-based think-tank, estimated that over a third of the money provided by developed countries in 2022 came from existing aid pots.

“A significant part of the increase is due to providers stretching, redirecting, and re-labelling existing development finance,” said Ian Mitchell, senior policy fellow at CGD and one of the report’s authors.

In February, an independent watchdog found the UK had counted an additional £1.7 billion ($2.15 billion) towards its £11.6-billion climate finance target without giving any more money to vulnerable countries, mainly by re-badging other forms of aid as it sought to counter fiscal pressures related to the COVID-19 pandemic.

The way in which climate finance contributions by donor countries are counted and tracked will be part of negotiations this year on a new finance goal set to be agreed at the COP29 climate summit in Azerbaijan in November.

The new collective quantified goal (NCQG) for finance is the most important decision expected to be taken at this year’s COP and will replace the current $100-billion commitment, due to expire in 2025.

Experts believe an ambitious deal can play a crucial role in getting developing countries, especially the poorest ones, to commit to stronger action on emissions and adaptation as they draft their new national climate plans due in early 2025.

US government backs the carbon credit industry’s push to fix itself

Melanie Robinson, global climate, economics and finance director at the World Resources Institute, said filling the funding gap for poorer nations should be “the top priority” for the NCQG negotiations at COP29 but success will hinge on more than just securing a much larger top-line dollar amount.

‘Progress on adaptation finance’

Alongside simmering tensions over a push by wealthy nations to expand the pool of donor countries, and differing views on whether the new goal should include wider sources of climate finance, the most vulnerable countries have called for a specific target for adaptation funding.

Finance to help countries adapt their economies and societies to fiercer heatwaves, droughts, storms and floods, as well as rising seas, has always lagged far behind investment in clean energy and other measure to cut emissions – even as those climate impacts accelerate faster than scientists expected.

Loss and damage board speeds up work to allow countries direct access to funds

Under pressure at the COP26 climate talks in 2021, developed countries urged each other to at least double their provision of adaptation finance to developing nations by 2025 from the roughly $19 billion they gave in 2019.

This week, the OECD figures showed that at the halfway point in 2022, adaptation funding from developed nations rose to $28.9 billion – the highest ever – with an additional $3.5 billion mobilised from the private sector.

The Paris-based watchdog said progress towards meeting the target “has been made and needs to be maintained”.

Activist Singh said climate-vulnerable people and ecosystems needed rich nations to urgently step up and deliver “real, substantial financial support”.

“It’s not just about the numbers; it’s about integrity and genuine support,” he added. “As we stand today, the financial needs of developing countries for transitioning away from fossil fuels and dealing with climate impacts have skyrocketed into the trillions.”

(Reporting by Megan Rowling and Matteo Civillini; editing by Joe Lo)

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The Biden administration has laid out for the first time a set of principles that attempt to define how “high-integrity” carbon credits can play “a meaningful role” in helping cut greenhouse gas emissions and channelling “a significant amount of private capital” to combat climate change.

A 12-page policy document released by the US government on Tuesday includes provisions to ensure that carbon credit projects deliver real emission reductions, avoid harming local communities and encourage companies to decarbonise their own operations before buying offsets.

But it also recommends that businesses should be allowed to use carbon credits to cancel out some of the emissions generated by their suppliers and customers, known as “Scope 3”. A similar move by the board of the Science Based Targets initiative (SBTi), a leading arbiter of corporate net zero plans, sparked a major backlash from staff last month.

The US government guidelines are neither binding nor enforceable. However, proponents hope they will reinforce a number of ongoing initiatives led by carbon credit developers, buyers and green groups to raise standards and boost the role of carbon markets in climate and nature protection.

Troubled market

Polluting companies, including major fossil fuel producers and airlines, spent an estimated $1.7 billion last year on voluntary carbon offsets meant to compensate their direct emissions by funding climate-friendly activities elsewhere, such as planting trees or rolling out renewable energy sources.  

But a series of revelations questioning the environmental and social benefits claimed by some developers and users of carbon credits have dented confidence in the market.

As South Africa heads to the polls, voters await stalled “just energy transition”

Scientific studies and investigative reports – including by Climate Home – have found that a growing number of projects failed to deliver the emission reductions promised. NGOs have also denounced instances of human rights abuse and environmental damage caused by carbon-offsetting activities.

“Voluntary carbon markets are a huge distraction and a waste of time and resources,” said Mohamed Adow, the Nairobi-based founder of the Power Shift Africa think-tank. “It’s sad to see politicians in the Global North desperately trying to find any way they can to avoid actually just cutting their carbon emissions,” he added.

Every tool needed

In its announcement, the US government acknowledged the shortcomings in voluntary carbon markets (VCMs), saying that “in too many instances” credits do not live up to the high standards required.

“For good reasons a lot of folks outside this room are skeptical,” National Climate Advisor Ali Zaidi told attendees at the policy launch in Washington. “[They are] scared off by news stories of things that went wrong and gloss of greenwash.”

US National Climate Advisor Ali Zaidi speaks during a press briefing at the White House in Washington, U.S., January 26, 2024. REUTERS/Julia Nikhinson

But, he added, that should not be seen as “an excuse to slow down but as an occasion to speed up” and do things better.

The Biden administration wants to be a leader in guiding “the development of VCMs toward high-quality and high-efficacy decarbonization actions”, the White House said. Its principles closely align with those of industry-led governance bodies that are trying to revamp the carbon market.

The Integrity Council for the Voluntary Carbon Market (ICVCM) is currently assessing project methodologies as part of its efforts to establish the first independent global benchmark for “high-integrity” carbon offsets, known as the “Core Carbon Principles”.

“We are in a climate emergency and we need every tool in the box to meet the 1.5°C [global warming] target,” said ICVCM Council Chair Annette Nazareth. “High-integrity carbon credits can mobilise private finance at scale for projects to reduce and remove billions of tonnes of emissions that would not otherwise be viable.”

Substitute for government aid

As most of the world’s largest carbon offsetting projects are based in the Global South, many rich governments view the market favourably as a way of getting dollars to developing nations without tapping into public budgets.

That is the case in the US where climate funding has fallen victim to political polarisation. President Joe Biden promised to increase international climate finance to over $11.4 billion per year by 2024. But Congress approved only a fraction of that as part of this year’s government budget: $1 billion of a spending package totalling $1.59 trillion.

In Malawi, dubious cyclone aid highlights need for loss and damage fund

The White House’s Zaidi said voluntary carbon markets can move “mountains of capital” if their integrity is improved. Better regulation could expand the market from its current size of around $1.7 billion to $1.1 trillion by 2050, according to predictions by BloombergNEF. 

Gilles Dufrasne, global policy lead at Carbon Market Watch, told Climate Home the US government will need to “walk the talk and ensure that its promises of transparency and integrity are followed up by actions”.

“There is currently no public data to measure how much finance is flowing to climate action through carbon credits and how much is staying in the pockets of Global North intermediaries and consultants,” he added.

International negotiations

The US government is also a strong proponent of private sector-led carbon credit initiatives in international climate circles.

In discussions at the COP28 climate summit last year on setting the rules for a new carbon market governed by the United Nations, Washington championed what observers described as a “light-touch, no-frills” approach that could hand a prominent role to private-sector players from the voluntary market.

The move was rejected by the European Union, causing a breakdown in the negotiations, which will resume at the mid-year UN climate talks in Bonn starting next week.

“By undermining the multilateral process … and placing more faith in private sector-governed voluntary carbon markets, the US appears to be shirking its responsibilities for financing climate action and offloading them onto the private sector,” said Trishant Dev, a carbon market expert at the Delhi-based Centre for Science and Environment.

(Reporting by Matteo Civillini and Joe Lo; editing by Megan Rowling)

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A coalition of small island nations behind the case hailed the long-awaited legal opinion issued by the International Tribunal for the Law of the Sea (ITLOS) as a “historic” victory.

The court found that greenhouse gas emissions absorbed by oceans can be considered pollutants and states must do whatever they can to reduce them.

The opinion is not legally binding but supporters of the case hope it can help influence climate negotiations and be used as a precedent in future court cases. 

Prime Minister Gaston Browne of Antigua and Barbuda said the decision “marks a historic milestone in our collective journey towards environmental justice and climate governance”.

“The ITLOS opinion will inform our future legal and diplomatic work in putting an end to the inaction that has brought us to the brink of an irreversible disaster”, he added. 

Landmark case

Antigua and Barbuda is among nine small island states that last year asked Hamburg-based tribunal ITLOS to clarify the state responsibilities on climate change under the UN Convention on the Law of the Sea (UNCLOS).

The 1982 convention has 164 countries as parties, with the notable exception of the United States.

Africa must reap the benefits of its energy transition minerals

The treaty requires its signatories to prevent, reduce and control marine pollution. But it does not explicitly identify greenhouse gas emissions as pollutants, prompting island nations to seek an opinion on whether that would qualify.

They also asked the tribunal to spell out what the countries should do to cut down emissions given their impact on the oceans. 

In submissions to the proceedings, most countries acknowledged that greenhouse gas emissions pollute the oceans, but they disagreed on what obligations the maritime treaty imposed on their actions related to climate change.

Polluters pushback

China and India challenged the tribunal’s jurisdiction, arguing that issues relating to climate change should be handled within the UN climate change (UNFCCC) regime. 

While accepting the tribunal’s authority to give an opinion on the matter, wealthy nations including the European Union, the United Kingdom, Japan and Australia said the Paris Agreement lays out the rules and procedures necessary to address climate change and comply with the requirements of UNCLOS. 

The tribunal’s opinion should not be “imposing more stringent obligations than those already agreed” under the Paris Agreement, the EU statement said.

Azerbaijan pursues clean energy to export more ‘god-given’ gas to Europe

But the tribunal took a different view. It said “complying with the obligations and commitments under the Paris Agreement” would not be enough to satisfy the country’s duty to protect the oceans.

That is because the Paris Agreement does not require countries to reduce greenhouse gas emissions “to any specific level according to a mandatory timeline”, but leaves them freedom to set their own climate goals.

The tribunal’s opinion “confirmed that the obligations under the Paris Agreement set a floor, not a ceiling for states to act to prevent greenhouse gas emissions”, said Tiffanie Chan, Policy Officer at the Grantham Research Institute on Climate Change and the Environment.

Existential threat

One of the planet’s greatest carbon sinks, the ocean absorbs about 25% of all carbon dioxide emitted by human activities and has captured 90% of the excess heat generated by those emissions. Global oceans are experiencing unprecedented heat, with surface temperature records broken every day since March 2023.

For small island states, combatting global warming is a matter of survival. The South Pacific nation of Tuvalu could be completely submerged by the end of the century at current rates of emissions and without extensive measures to adjust to climate change.

Payam Akhavan, lead counsel for the nine island nations, poses with other lawyers after The International Tribunal for the Law of the Sea (ITLOS) gave its advisory opinion. REUTERS/Fabian Bimmer

Eselealofa Apinelu, Tuvalu’s Attorney General, said she had travelled for over 24 hours to reach Hamburg but did not want to miss this “historic moment”.

“We have to do everything that we can to make sure that we can find a solution to our challenges”, she said. “This is an important first step in holding the major polluters accountable, for the sake of all humankind”.

Next steps

Climate lawyers and campaigners said the tribunal’s opinion could influence climate negotiations and push the countries most responsible for the climate crisis to raise their ambition to cut emissions when they submit the next round of national climate plans due in early 2025.

Payam Akhavan, the legal counsel for the nine island nations, said the case was borne out of “frustration with the failure of the COP process” to achieve its objectives. “The turn to international law should simply shape future negotiations to ensure that the climate change regime is more robust and that it has more teeth than it presently does”, he added.

Legal experts are also hoping that the decision could form a significant precedent and influence upcoming legal opinions by the Inter-American Court on Human Rights and the International Court of Justice, which are also considering countries’ climate obligations.

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This is Azerbaijan’s first large-scale solar power plant. It opened last October and the Emirati company developing it, Masdar, says it can power 110,000 homes.

Climate Home visited the solar park as part of a media tour organised and sponsored by the Azerbaijan COP29 Presidency, which is arranging the UN climate summit in Baku this November.

At the park’s opening ceremony, in front of Sultan Al-Jaber – Masdar’s CEO who led the COP28 climate summit in Dubai – Azerbaijan’s President Ilham Aliyev boasted about his country’s determination in “moving towards a green agenda”. 

“This is our contribution not only to the future development of Azerbaijan but to the issues related to climate change,” he told the assembled dignitaries. 

But despite this rhetoric, climate scientists have questioned Azerbaijan’s climate credentials as it prepares to host the COP29 summit. 

An increase in renewable energy production does not mean Azerbaijan is planning to leave its vast oil and gas reserves in the ground. Aliyev said last month that Azerbaijan will try to sell abroad the gas it saves by not using it in power stations at home. Europe is the main target customer, as it shifts away from Russian gas supplies.

In Nagorno-Karabakh, Azerbaijan’s net zero vision clashes with legacy of war

On top of selling its surplus, Azerbaijan is planning to extract more gas thanks, in part, to fresh investments from foreign fossil fuel giants like Britain’s BP, France’s TotalEnergies and Emirati oil giant ADNOC, which Al-Jaber also heads. 

Bill Hare, CEO of climate science non-profit group Climate Analytics, called Azerbaijan’s plans “a fantasy”. “Ramping up renewables won’t make a dent in emissions unless they displace fossil fuels in the system,” he told Climate Home. “You can’t tackle climate change without getting rid of fossil fuels.” 

A spokesperson for COP29 said gas is “an ideal transition fuel in the production of electricity”. In emailed comments, they added that gas exported to Europe can replace coal power – which currently provides around 15% of the EU’s electricity – in the short to medium-term, thereby reducing greenhouse gas emissions.

Azerbaijan is not alone in pursuing both renewable energy and fossil fuel production. Most fossil fuel producers – including wealthy nations like the US, UK and Canada – have no plans to stop producing oil and gas. That’s despite the International Energy Agency (IEA) warning that new fossil fuel extraction projects are not compatible with limiting global warming to 1.5C.

The COP29 spokesperson said Azerbaijan’s strategy does not contradict IEA scenarios, noting those do not exclude continued investment in existing oil and gas assets and approved projects.

A fossil fuel economy

Azerbaijan’s fossil fuel industry is steeped in history. As early as the 13th century, Italian explorer Marco Polo wrote of Baku’s “stream of oil in such abundance that a hundred ships may load there at once”. 

In the 19th century, Azerbaijan gave birth to modern crude refining, and by the 20th century it accounted for around half of the world’s oil production, helping fuel the Soviet Union’s victory in World War Two.

Oil and gas remain omnipresent today. The Flame Towers, Baku’s iconic skyscrapers, are a symbol of fossil fuel wealth. At night, their facades light up to display flickering flames in a reference to the naturally-occurring fires produced by gas leaks that earned Azerbaijan its name, “The Land of Fire”. 

The logo of SOCAR, the state-owned oil and gas firm, emblazons the national football team shirts, while one of the country’s oldest oil fields sits just behind Baku’s Olympic Stadium, the venue for the COP29 climate summit. 

Oil fields on the outskirts of Baku, Azerbaijan, April 2o24. Photo: Matteo Civillini

By global standards, Azerbaijan is no longer a major fossil fuel producer, pumping less than 1% of the world’s oil and gas. But its economy remains heavily dependent on the income they generate. Fossil fuels make up over 90% of all exports and 64% of government revenue.

At the Petersberg Climate Dialogue in Berlin last month, Aliyev said that “having oil and gas deposits is not our fault. It’s a gift from God. We must not be judged by that. He added that “our oil and gas will be needed for many more years, including in European markets”.

A shrinking market?

European countries have historically been the main destination market for Azerbaijani oil and gas, and flows have been rising in the wake of Russia’s invasion of Ukraine. 

As Europe tried to wean itself off Moscow’s supplies, the European Commission went looking around the world for alternative sources of gas to keep the lights on and curb skyrocketing prices. In Azerbaijan, it struck a new deal to double gas exports by 2027. 

Baku is now scrambling to make good on that pact, while using it as a lever to expand its lucrative gas industry. The country could boost its gas production by more than a third over the next decade, according to data analysis by campaigning group Global Witness. 

“We are largely investing in increasing our gas production,” said Aliyev in Berlin, “because Europe needs more gas from new sources.” 

But energy experts question that reasoning. While looking for new gas supplies in the short term, the war in Ukraine also prompted the EU to fast-track its transition towards renewable sources of energy. Its strategic energy plan, laid out in 2022, would see overall gas demand in the bloc halve by 2030. 

“There will be a lot of supply globally and not that much demand on the European side,” said E3G analyst Maria Pastukhova. “Looking at the amounts alone, the EU will not need any additional gas from Azerbaijan if it delivers on its energy transition policies.”

Clean, cheap or fair – which countries should pump the last oil and gas?

But much will also depend on what kind of gas the block will continue to rely on. Norway, Europe’s top supplier, Algeria and Azerbaijan provide it through pipelines, while the United States and Qatar ship liquefied natural gas (LNG) to the continent. 

“It’s hard to say at the moment [which supplies will remain],” added Pastukhova. “But it isn’t very likely that Azerbaijan can continue to bank on crazy gas revenues from the EU. We don’t see readiness from European buyers to sign long-term contracts beyond 2035.” 

Sell, don’t burn

Meanwhile, Baku also wants to ensure that its gas is channelled towards the lucrative export market not burned at home.

Central to this strategy is the rollout of renewable energy. With strong winds blowing from the Caspian Sea and sun shining for a large part of the year, Azerbaijan boasts significant clean energy prospects.

But that potential has so far been largely untapped. Renewable sources, mainly from three hydro power stations, produced only 7% of Azerbaijan’s electricity in 2023. The government wants to increase that to 30% by 2030. 

If that target is met, Aliyev says that solar and wind will pump 5 gigawatts of clean electricity into the national grid, freeing up “at least” 5 billion cubic metres of gas for the European market.

At Masdar’s sprawling solar park in Garadagh, this plan is being rolled out. The park spans the equivalent of 770 football pitches, but was built in just under two years. It cost $262 million, with multilateral development banks stumping up just under half of that.

Speaking to journalists inside the plant’s control room, Kamran Huseynov, deputy director of the Azerbaijan Renewable Energy Agency, said eight more solar and wind projects are being developed for the coming years. “We are quite sure we can reach the target [of 30% renewables capacity] by 2028,” he added. 

As in Garadagh, foreign energy companies will be at the helm of those eight projects. Masdar will build two more solar parks and one onshore wind farm. Saudi Arabia’s ACWA Power is erecting a wind farm just north of Baku by the Caspian Sea.

Renewables-processed fossil fuels?

Later this year, BP is expected to start building a solar farm in the district of Jabrayil. This is one of the territories Azerbaijan captured after a long-running dispute with Armenia centred on the Nagorno-Karabakh region. 

Baku seized control of these areas in a two-part military offensive that started in 2020 and ended last autumn. As a result, some 136,000 ethnic Armenians who had lived in Nagorno-Karabakh fled in a mass exodus which, according to Armenia and the EU Parliament, amounted to “ethnic cleansing”. Azerbaijan has rejected those accusations. 

In Nagorno-Karabakh, Azerbaijan’s net zero vision clashes with legacy of war

The Azeri government is now promoting a green vision for Nagorno-Karabakh which involves the construction of government-branded “net zero” villages. It has also designated the region as a “green energy zone”, aiming to attract investment in renewable energy.

BP was the first major international energy firm to jump at that opportunity. In 2022, the company’s regional president for Azerbaijan, Georgia and Turkey, praised Baku’s efforts to turn Karabakh into “the heart of sustainable development”. 

BP wants electricity produced from Jabrayil’s solar power plant to make some of its vast oil and gas operations in Azerbaijan less dirty.

The British energy giant runs the Sangachal terminal, one of the world’s largest oil and gas processing facilities and the starting point for the pipelines transporting gas to Europe. Processing all of this oil and gas requires power, which BP currently gets from burning gas in generators.

The Sangachal oil and gas terminal in Azerbaijan. Photo: Azerbaijan Presidency

According to Elnur Soltanov, Azerbaijan’s deputy energy minister and the COP29 CEO, these are “very inefficient” and produce “some of the dirtiest electricity” in the country. After being electrified, the fossil fuel processing plant will receive the same amount of electricity from the grid as the solar park generates, according to Azernenerji, the country’s grid operator.

The process will also free up “more gas to export to world markets”, BP says.

BP’s project is being developed in partnership with SOCAR, Azerbaijan’s state-owned oil and gas giant. After setting up a “green energy” unit last year, SOCAR says it is working with international companies, like BP, “in order to get the know-how” and “learn in the process” with the goal of transforming into a “comprehensive energy company”.  

“Sooner or later, hydrocarbons will slowly die out – not right away,” Teymur Guliyev, deputy vice president for the energy transition at SOCAR, told reporters including Climate Home. “But we have to start our transformation process when we still have plenty of time to plan accordingly, go through trial and error.” 

The COP29 spokesperson said Azerbaijan “is making significant progress” towards reducing its greenhouse gas emissions. Currently, Azerbaijan has a goal to reduce emissions 40% by 2050 as outlined in its national climate plan (NDC). It has promised to submit a new NDC that is aligned with limiting global warming to 1.5C, which is due by early 2025.

How to move it

While the current priority for Azerbaijan’s renewables push appears to be maximising its gas exports, the government is also wrangling over how to sell its clean energy to Europe, when gas demand falls.

COP29’s Soltanov told Climate Home and other international journalists that he is “very optimistic” about Azerbaijan’s green transition. “Azerbaijan has been at the forefront of the oil revolution, it has been at the forefront of the gas revolution, and it has all the conditions to be at the forefront of the clean energy revolution as well,” he added. 

But the transportation of green electricity remains an obstacle.

The main option being explored is laying an electric cable under the Black Sea, stretching over 1,155 kilometres between Georgia and Romania. Originally the project, under discussion for several years, had the stated intention of linking Georgia to the European transmission network and boosting its energy security. 

But it was recently revamped as a possible route to carry Azerbaijan’s clean energy to the European market. In December 2022, the leaders of Azerbaijan, Georgia, Romania and Hungary formed a partnership to push the project forward, indicating it could be completed by 2029 at a cost of €2.3bn ($2.5bn). A two-year long feasibility study is currently in its final stage, according to President Aliyev. 

The leaders of Azerbaijan, Romania, Hungary and Georgia, and the European Commission President, at the signing of a green energy partnership in December 2022. (Photo: Inquam Photos/Octav Ganea via Reuters)

Implementing the project could be challenging given the fragile geopolitical situation in the region. The cable would run just south of the Crimean Peninsula, under Russian control, and near a theatre of war in Ukraine with the strong presence of military vessels. 

For Climate Analytics’ Bill Hare, “it’s a tricky location to attract investment and get built at the moment, but it would provide a lot of benefits in the long-term”. 

There are also questions over whether Azerbaijan’s current plans to export green energy via the Black Sea cable will yield a high-enough return to compensate for selling less fossil fuel.

“Electricity trade is a stable source of revenue, but it is also capital-intensive and not very high margin,” explained E3G’s Pastukhova. “It will not replace the same amount of export revenue that gas and oil have been contributing.”

“What Azerbaijan is doing right now [on renewables] is not enough and quite alarming because this country is so dependent on oil and gas revenue,” she said.

(Reporting by Matteo Civillini in Azerbaijan; editing by Megan Rowling and Joe Lo)

Matteo Civillini visited Azerbaijan as part of an “energy media tour” organised and sponsored by the COP29 Presidency.

The article was updated on 17 May to include comments from a COP29 spokesperson received after publication. 

The post Azerbaijan pursues clean energy to export more ‘god-given’ gas to Europe appeared first on Climate Home News.

Aghali is a pioneering example of Azerbaijan’s plan for “green” reconstruction of the territories it captured after a long, bloody conflict with Armenia, centred on the disputed Nagorno-Karabakh mountainous enclave.

Hundreds of Azeris displaced from the region in the early 1990s have moved back to Aghali, a local government official told Climate Home.

“The emotional link to these territories is very strong even though 30 years have passed,” the official said. “Our people are happy to be back”.

The government says more than 100,000 Azeris will return to populate the 30 or so new towns and villages planned across the area by 2026, which are expected to run mainly on clean energy and aim for “net zero” emissions.

Yet a more troubled story lies beneath the shiny surface presented by the authorities – part of Azerbaijan’s efforts to polish its green credentials before the COP29 UN climate summit it will host in November.

Some 136,000 ethnic Armenians who had called Nagorno-Karabakh their homeland fled in a mass exodus during a two-part military offensive by Azerbaijan that started in 2020 and ended last autumn.

For Armenian authorities and some human rights and legal experts, the drive amounted to “ethnic cleansing” – a phrase used in a European Parliament resolution on the conflict. A spokesperson for COP29 told Climate Home the Azerbaijan authorities “categorically reject this view”.

With the fighting now over, the two sides are engaged in talks to build a lasting peace. They struck an initial agreement to establish border demarcations in April, but hopes of a swift breakthrough on a permanent solution remain slim.

Meanwhile, displaced Armenians have said publicly they fear the heritage sites and homes they hastily left behind will be erased under a giant construction effort. Evidence of this was seen last month by Climate Home on a press trip organised and sponsored by the COP29 Presidency team, which controlled access to locations and sources in the region.

‘Net zero’ vision

Azerbaijan has built its prowess, both on and off the battlefield, on the strength of its vast oil and gas reserves. Around 60 percent of the government’s budget is financed through the sale of fossil fuels, primarily via export to Europe.

Last month, Azerbaijan President Ilham Aliyev called oil and gas “a gift from God” at the Petersberg Climate Dialogue in Berlin, signalling continued investment in increased gas production. That is despite signing up, like all countries, to a global agreement to transition away from fossil fuels “in keeping with the science” at the COP28 UN climate summit in Dubai last December.

Nonetheless, as its capital Baku gears up to host COP29, Azerbaijan also wants to show off its efforts to adopt clean energy and cut planet-heating emissions to the outside world.

Nagorno-Karabakh, and the surrounding provinces, lie at the centre of this push. The government has declared a “green energy zone” here, adding a dozen hydropower plants, and seeking to attract foreign investment in solar and wind.

Azerbaijan President Ilham Aliyev in front of a screw turbine hydro power plant in Zangilan, one of the territories recaptured in 2020. Photo: Azerbaijan Presidency

Across the country, the government wants renewables to make up 30 percent of its installed electricity capacity by 2030 – up from 7 percent in 2023. The main motivation is to reduce the use of gas in its own power stations so that more of it can be shipped to Europe, President Aliyev said during an event at ADA University in Baku in April.

Azerbaijan is also planning to achieve “net zero” carbon emissions in Karabakh by 2050, as outlined in its latest national climate action plan (NDC) submitted under the UN climate process. It says that “to revitalise the territories liberated from occupation”, the government will establish “smart” settlements, promote “green” energy zones, agriculture and transport, and reforest “thousands of hectares”.

For Anna Ohanyan, a senior scholar in the Russia and Eurasia programme at the US-based Carnegie Endowment for International Peace, “it’s greenwashing of an ethnic cleansing, pure and simple”.

“Azerbaijan is putting a stamp on the territory as a way to legitimise the conquest of Nagorno-Karabakh and doing so under the pretence of helping fight climate change,” she told Climate Home.

The COP29 spokesperson said in emailed comments that this view “has no basis in fact”, adding that Azerbaijan is rebuilding houses for its citizens who were internally displaced during the conflict, “according to UN sustainability standards”.

Disputed territory

Territorial disputes over the Nagorno-Karabakh region have a long and complex history.

“Azerbaijan and Armenia – both are convinced this is historic patrimony of their people,” said Audrey Altstadt, a professor of history at the University of Massachusetts Amherst who specialises in Azerbaijan.

As the Soviet Union set about governing its far-flung provinces in the 1920s, then Commissar of Nationalities, Joseph Stalin, ruled that the region should be part of Soviet Azerbaijan, even though ethnic Armenians made up 94% of its population at the time.

In the 1980s, alongside the fall of the Soviet Union, tensions began to rise after Nagorno-Karabakh’s governing authorities declared their intention to join Armenia and Azerbaijan reacted by attempting to suppress separatists.

After the two sides gained independence from the Soviet Union in 1991, clashes between them escalated into an all-out war.

By the time fighting stopped three years later, Azerbaijan had suffered a crushing defeat, losing not just Nagorno-Karabakh but also a sizable chunk of territory around it. Ethnic Armenians declared a separatist republic in the region with the backing of Armenia.

Evolution of territorial control over Nagorno-Karabakh, and surrounding districts, from the aftermath of the 1994 war until today. Graphic: Fanis Kollias

Some 870,000 Azeris abandoned their homes in the captured area and Armenia itself, while around 300,000 ethnic Armenians fled Azerbaijan, according to the United Nations’ refugee agency.

For 15 years the conflict remained frozen, while international actors – led by the United States, France and Russia – tried, and failed, to find a peaceful resolution.  

Azerbaijan’s autocratic president, Aliyev, took matters into his own hands in September 2020, mounting a large-scale military offensive on Nagorno-Karabakh. Powered by more sophisticated weaponry, and backed by Türkiye, Azeri forces prevailed during a 44-day war that claimed the lives of at least 7,000 people – including over 100 civilians. 

Under a ceasefire agreement signed in November 2020, Azerbaijan gained a significant proportion of Nagorno-Karabakh, including the coveted town of Shushi – called Shusha by Azeris – as well as winning control of adjacent districts. 

Soon afterwards, Baku announced a colossal programme to rebuild and repopulate the region, establishing “green energy zones” in Nagorno-Karabakh and East Zangezur. 

Rebuilding ‘from scratch’

Deep behind a string of police checkpoints, the plan is proceeding apace. It includes Aghali, one of the “smart” villages created by the government to accommodate Azeri citizens displaced from the area three decades ago.

“Everything we build here, starting from houses to schools, is based on the element of solar,” said Vahid Hajiyev, special representative of the Azerbaijan presidency in Jabrayil, Gubadli and Zangilan districts, addressing a group of international reporters.

“The whole area had been devastated,” added Hajiyev, saying it was largely abandoned and littered with mines after Armenia captured it. “We’re doing everything from scratch and that gives an opportunity to do it right.”

A view of Aghali, a “smart” village created by the Azerbaijani government in the territories retaken from Armenia, in April 2024. Photo: Matteo Civillini

A nearby screw hydro turbine provides electricity for the whole village, while homes are equipped with solar water heating systems, officials told Climate Home.

“Smart agriculture” projects are being developed to give work to the more than 860 people who, according to government figures, have already moved into the village, with hundreds more expected to join them soon, they added.

Climate Home was not able to talk to any of the residents, besides government officials, and was not shown around the homes.

Aghali offers a template for around 30 similar villages the Azeri government plans to erect across the captured regions. They are just one part of the mammoth construction drive in the Karabakh area, bankrolled by Baku to the tune of just under $2.5 billion a year – around 12% of total public spending.

While the official vision projects an eco-paradise, in Baku’s breakneck drive to put it into practice, the landscape currently resembles a sprawling construction site, as seen by Climate Home and shown by satellite images.

Travelling up the windy road to Shusha-Shushi just before midnight, the headlights of dump trucks and cement mixers pierced the near-total darkness.

They are the backbone of a giant effort to lay down thousands of kilometres of roads and railways and throw up brand-new airports, vast conference halls, hotels and apartments.

Globally, construction is among the most polluting industries, contributing around 10% of global carbon dioxide (CO2) emissions in 2022, according to the UN Environment Programme (UNEP).

In March 2022, the Azerbaijan government invited observers from UNEP to assess the environmental situation in the territories it had gained, after accusing Armenians of large-scale destruction and contamination of the water and soil.

The UNEP team documented “chemical pollution of water” and “deforestation” as a result of activities in dozens of mines and quarries carried out by the Armenian administration “with inadequate environmental oversight and supervision”.

But it also found that Azerbaijan’s building drive, then still in its infancy, was already putting further strains on the environment, as well as causing climate-heating emissions, thereby “adversely impacting the zero-emission goal for the region”.

The construction of new roads was “having a significant impact on forest cover”, its report stated, while the infrastructure programme “placed a significant burden on finite natural raw materials” extracted from local quarries to make cement or asphalt.

The construction drive is altering the landscape in Nagorno-Karabakh. Photo: Matteo Civillini/April 2024

The COP29 spokesperson said Azerbaijan is following the recommendations of the UNEP report and that “a number of mitigation measures have been undertaken” to curb the environmental footprint of the works.

“We believe that the net impact of the reconstruction effort will actually contribute to Azerbaijan’s climate change and decarbonisation goal,” the spokesperson added.

Nagorno-Karabakh’s net zero target has yet to be extended to the rest of the country. Currently Azerbaijan has a goal to reduce emissions 40% by 2050 and has promised to submit a new NDC that is aligned with limiting global warming to 1.5C, which is due by early 2025.

Environmental blockade

In December 2022, environmental concerns became a weapon in the long-running dispute over Nagorno-Karabakh. Azerbaijani eco-activists blocked the Lachin Corridor, the only road connecting the region to the outside world and a vital supply line for food and medicines.

They were ostensibly demonstrating over the impact of mining in the breakaway region. But, according to close watchers of the conflict, the protesters had been sent there by Baku – a claim denied by the COP29 spokesperson.

At the time, one protester told Climate Home that representatives from the Ministry of the Environment were also present. On many other occasions, the Azerbaijan government has cracked down on political dissent, according to human rights groups.

When, four months later, Azerbaijan erected a permanent checkpoint on the road to “prevent the illegal transportation of manpower and weapons”, the sit-in ended. But the blockade of Nagorno-Karabakh continued with only limited amounts of aid trickling in.

Shortages of food, medications and fuel plunged the region into a humanitarian crisis, according to UN human rights experts.

“In the end, it was hard to even find bread. There were women and kids queuing all night for a piece of bread,” recalled Siranush Sargsyan, an Armenian journalist from Nagorno-Karabakh, in an interview with Climate Home. “Even if they didn’t kill all of us, they were basically starving people.”

On September 19 2023, Azeri forces launched a lightning attack on the parts of Nagorno-Karabakh still controlled by ethnic Armenians in what Baku called “an anti-terrorist operation”. Within 24 hours, the de-facto government of the enclave surrendered and announced the republic would cease to exist the following January.

Fearing violence and persecution, over 100,000 ethnic Armenians – nearly the entire remaining population – fled their homes in Nagorno-Karabakh and sought refuge in Armenia.

Refugees from Nagorno-Karabakh region arrive at the Armenian border in a truck in September 2023. REUTERS/Irakli Gedenidze

“[The] liberation of territories was a main goal of my political life. And I’m proud that these goals have been achieved,” President Aliyev, whose family has ruled over Azerbaijan for the past 31 years, said last December. “I think we brought peace. We brought peace by war.”

Now in full control of Nagorno-Karabakh, Azerbaijan is doubling down on its efforts to reshape the region and move tens of thousands of Azeris there. “We will continue the ‘Great Return’ campaign until all those who were forced from their homes can go home,” the COP29 spokesperson said, referring to internally displaced Azeris.

Government officials told Climate Home that ethnic Armenians are also welcome to go back, but only if they stick to the conditions imposed by Baku.

Journalist Sargsyan said returning to Nagorno-Karabakh under Azeri control is out of the question as she fears for her safety. “I left everything there”, she said. “But I would rather die than end up in a prison in Azerbaijan.”

Heritage destruction

Meanwhile, ethnic Armenians fear the huge Azeri construction drive now underway will erase most, if not all, of their legacy.

Nijat Karimov, a special adviser to Azerbaijan’s presidency, told Climate Home that Baku had destroyed Armenian government buildings in Nagorno-Karabakh for “safety” reasons, without giving specifics. He added that Azerbaijan’s government had since “repaired and rehabilitated” the villages.

A day later, Climate Home travelled past what little remains of Karintak village (known as Dashalti in Azeri). Nestled in a gorge sitting just below Shusha-Shushi, it was home to a few hundred ethnic Armenians until Azeri forces took over at the end of 2020.

Now nearly the entire settlement appears to have been razed to the ground, as Climate Home witnessed. Mounds of disturbed soil surround a large mosque, under construction, and a church, one of the few original buildings left standing.

The village of Karintak (bottom right corner), as seen in April 2024 when Climate Home was taken through the region. Photo: Matteo Civillini

Climate Home asked the COP29 Presidency what had happened to the village. A spokesperson said government experts would need to examine the satellite images, buildings and sites referenced in Climate Home’s question “to get a complete answer”.

The case of Karintak is not an isolated one, according to Caucasus Heritage Watch, a research group led by archaeologists at Cornell and Purdue Universities. They have documented the destruction of at least eight Armenian cultural heritage sites – including churches and a cemetery – in the retaken territories since 2021.

Lucrative contracts

Baku says its grand vision is to repopulate Nagorno-Karabakh and the neighbouring areas, attract foreign business and eventually turn them into tourism destinations. But when Climate Home visited, most of what had been built appeared to be under-used, while access to the region is severely restricted.

Two international airports, completed in just 10-15 months a mere 70 km apart, have very little air traffic, except for the occasional charter flight, tracking data shows. A third airfield is now being erected nearby.

In Shusha-Shushi, a five-star spa hotel complex with sleek marble interiors was inaugurated just over a year ago. When Climate Home walked past last month, there was not a client in sight, with only wandering labourers headed to nearby construction sites.

The 5-star Shusha Hotel appeared empty when Climate Home visited in April 2024. Photo: Matteo Civillini

Historian Altstadt said the reconstruction is being driven by multiple incentives. “Yes, it is to get people back to the land they left over 30 years ago, and it is also to put their stamp on it to show ‘this is our territory and we can do what we want’,” she told Climate Home. “But there is also a lot of money to be made by Azerbaijan’s oligarchs.”

Pasha Holding is a conglomerate controlled by the powerful Pashayev family of First Lady Mehriban Aliyeva. It is heavily involved in the rebuilding of Nagorno-Karabakh. It also manages huge tracts of agricultural land and new hotels, and is opening bank branches and supermarkets.

The vast amount of money – and assets – up for grabs is also attracting considerable foreign interest.

Turkish firm Kalyon – considered to have close ties to Prime Minister Recep Tayyip Erdogan, according to Reporters Without Borders – has won major construction contracts in the territories. And mining permits in Karabakh have been awarded to a group run by pro-Erdogan businessman Mehmet Cengiz.

How to fix the finance flows that are pushing our planet to the brink

British architects Chapman Taylor are earning at least $2.3 million to map out the redevelopment of Shusha-Shushi – which thousands of ethnic Armenians fled following Azeri attacks in 2020 – and will also work on the urban design of other towns.

BP, meanwhile, is developing a 240-megawatt solar power plant in Jabrayil district, with construction expected to begin later this year. Speaking at Baku Energy Week in 2022, Gary Jones, the energy firm’s regional president for Azerbaijan, Georgia and Turkey, praised Baku’s efforts to turn Karabakh into “the heart of sustainable development”.

Adopting contested terminology used by Azerbaijan, he said the “liberated territories” are “blessed with some of the country’s best solar and geothermal resources”, creating the “perfect opportunity for a fully net zero system” that “can be built fresh from a new start”.

BP and Chapman Taylor did not respond to Climate Home’s request for comment.

Special presidential representative Hajiyev told Climate Home that many international companies are interested in working in Karabakh. “It’s a huge investment opportunity because a lot of government incentives are provided here,” he said.

(Reporting by Matteo Civillini in Azerbaijan; editing by Megan Rowling and Joe Lo; fact-checking by Sebastian Rodriguez)

Matteo Civillini visited Nagorno-Karabakh, and the surrounding districts, as part of an “energy media tour” organised and sponsored by the COP29 Presidency.

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As the 26-member board held its first three-day meeting in Abu Dhabi this week, discussions centered on the administrative steps needed to get the fund up and running, and giving out money as soon as possible.

Selecting the host country for the board is a priority because only then will it be able to take up legal responsibility and enter into formal arrangements with the World Bank, which governments have asked to host the loss and damage fund “on an interim basis” despite the initial reluctance of developing countries.

The World Bank has until mid-June to confirm it is willing and able to take on this role. The decision rests largely on the bank’s ability to meet 11 conditions, including allowing developing-country governments and organisations working with vulnerable communities to receive money directly without going through intermediaries like multilateral development banks or UN agencies.

“Too many cooks”

Daniel Lund, a loss and damage board member from Fiji, said that overhead costs and management fees from multiple layers of middlemen swallow up a high proportion of development funding in general.

“For small island developing states, it is always too many cooks and not enough ingredients,” he told Climate Home. “A lack of direct access is a particularly unacceptable scenario when it comes to finance for addressing loss and damage because much of what we need to do is direct support [to] the individuals and communities that bear the burden [of climate change]”.

Southern Africa drought flags dilemma for loss and damage fund

Concerns have been fuelled by the World Bank’s lack of experience in working with direct access to communities in its other operations, climate finance experts said. But during the meeting in Abu Dhabi, the bank sought to provide reassurances, indicating its willingness to be flexible on this matter and find a solution.

Renaud Seligmann, the World Bank representative at the meeting, told board members the bank is looking into a model that would “break new ground” and that it is “prepared to innovate and design with you to make it work”.

Host selection fast-tracked

For the World Bank, a primary concern lies with the risks attached to giving money to hundreds of small entities that may have less strict compliance processes. For that reason, it wants the board of the loss and damage fund to take on legal responsibility in case funds are misused. And as that legal personality can only be obtained from the host country, the selection process is being fast-tracked.

Interested countries have until early June to submit their candidacy – Barbados, Antigua and Barbuda, Bahamas and the Philippines have already thrown their hats in the ring. The board is expected to make a final decision at the next board meeting scheduled for July 9-12.

The board is picking up the pace of its work after its first meeting was delayed by three months as a result of developed countries’ failure to appoint their members on time.

A person moves their belongings at a flooded residential complex following heavy rainfall, in Dubai, United Arab Emirates, April 18, 2024. REUTERS/Amr Alfiky

The board was forced to tackle logistical challenges on the final day when stormy weather in Abu Dhabi moved the deliberations online. Scientists have warned that the Arabian peninsula will suffer more heavy rain at 1.5C of global warming than it did in pre-industrial times, and recent floods in the neighbouring city of Dubai shut down the airport and caused major economic damage.

Lund said the progress made at the first meeting “in some respects was surprising”, but there is still a long way to go before money reaches climate-vulnerable communities. “We have clear instructions, but translating that blueprint into contracts, roles, policies, locations, jobs and structures is going to be a shared headache for all board members over the course of this year and beyond,” he added.

Civil society at the table

Civil society representatives argued there is a need to broaden the direct participation of frontline communities struggling with climate impacts in the fund’s operations. The first board meeting limited participation to two people per UN stakeholder group – some of which represent millions, even billions, of people – such as Indigenous Peoples, youth, and women and girls.

“This fund must be different to fulfill the expectation – people-centered, human rights-based, gender-responsive – from the start, with meaningful participation and engagement throughout,” said Liane Schalatek, associate director of the Heinrich Böll Foundation in Washington who attended the board meeting.

G7 offers tepid response to appeal for “bolder” climate action

“Board members all stressed the importance of civil society observer and communities engagement and welcomed it,” she added. “Now that verbal support needs to be operationalised, including through dedicated financial support.”

After sorting through all of its procedural matters, the board will start addressing thornier issues such as how to disburse money and how to fill its coffers with more cash. So far, it has garnered about $660 million in pledges.

While board members hope to have the fund’s structure in place by COP29 this November, it is not expected to start handing out money until 2025.

(Reporting by Matteo Civillini; editing by Joe Lo and Megan Rowling)

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He added those countries should be “leading from the front” through much deeper emissions cuts, and bigger and better climate finance.

A day later, the gathering of the most powerful industrialised democracies responded with a tepid outcome, serving up a new commitment on ending coal power generation – weakened by a loophole in the language – a rehash of previous pledges and nothing new on climate finance, this year’s top priority in climate diplomacy.

For the first time, G7 countries all agreed to end the use of coal power generation in their energy systems “during the first half of the 2030s”.

While most members of the bloc are already planning to phase out coal before 2035, the commitment marks a step forward for Japan, analysts said. The Asian nation generates over a quarter of its energy from coal and, alongside Germany and the United States, had previously blocked international efforts towards setting a target date to shut down coal power plants.

Germany has written into its legislation a final target to exit coal by 2038 at the latest, but the government now intends to pull that forward to 2030. The United States unveiled new regulations last week under which coal plants planning to stay open beyond 2039 will have to cut or capture 90 percent of their carbon dioxide (CO2) emissions by 2032.

Not enough

But the G7 coal-power agreement struck on Tuesday in Turin, Italy, comes with a caveat that gives countries an alternative choice to phase out coal “in a timeline consistent with keeping a limit of 1.5°C temperature rise within reach, in line with countries’ net-zero pathways”.

Gilberto Pichetto Fratin, Italy’s minister for environment and energy security, told journalists at the end of the summit that the text “for the very first time uses a deadline, wherever possible”.

“G7 countries undertake to phase out the use of coal without jeopardising the various countries’ economic and social equilibrium,” he added.

Researchers say that, even if countries do stick to the mid-2030s deadline, it will not be enough to limit global warming in line with the goals of the 2015 Paris Agreement.

G7 countries need to phase out coal from power generation by 2030 at the latest, and gas by 2035, according to a recent analysis done by Berlin-based policy institute Climate Analytics.

G7 climate and energy ministers meet at the Reggia di Venaria Reale in Italy. Photo: G7 Italy

“It’s notable that gas has not been mentioned [in the G7 ministerial agreement],” said Jane Ellis, head of climate policy at Climate Analytics, pointing at increased investment in domestic gas facilities. “This is absolutely the wrong direction to be heading in – both economically and for the climate.”

In their final communique, ministers said that “publicly supported investments in the gas sector can be appropriate as a temporary response, subject to clearly defined national circumstances”, in their efforts to reduce dependency on imported Russian fossil fuels.

They also repeated a previous commitment to eliminate “inefficient fossil fuel subsidies by 2025 or sooner”, without providing a clearer definition of “inefficient” or details on how that goal would be achieved.

Fossil fuel subsidies across G7 countries hit an all-time high of $199.1 billion in 2022, according to analysis by IISD and the OECD. “It’s very clear they are not going to meet that target,” said Farooq Ullah, senior policy advisor at IISD.

No progress on climate finance

This week’s ministerial meeting in Italy also failed to significantly move the needle on climate finance, as UN negotiations on a new collective quantified goal (NCQG) at COP29 in November are starting to gather pace.

G7 countries said in their final text they “intend to be leading contributors to a fit-for-purpose goal” and acknowledged the need for “mobilising trillions”, but stopped short of making any new financial commitment or offering clear ways forward.

The existing goal is set at $100 billion a year, but developing countries – excluding China – need an estimated $2.4 trillion a year to meet their climate and development needs, leading economists have said in a report commissioned by the Cop26 and Cop27 presidencies.

In order to loosen the purse strings, it is crucial that every minister across government cabinets – and especially finance ministers and treasurers – “push climate action into high gear”, the UNFCCC’s Stiell said on Monday.

But, according to Luca Bergamaschi, director of Italian think-tank ECCO, they appear “not to be caring enough about climate finance”.

“Climate ministers are hitting a wall on climate finance. These decisions rest on finance ministers so they need to step up, and step in, because they have the power and responsibility to do so,” he told Climate Home.

Meetings of G7 finance ministers in mid-May and country leaders in June are seen as last-ditch opportunities to push things forward.

Experts believe an ambitious deal on climate finance at COP29 can play a crucial role in getting developing countries, especially the poorest ones, to commit to stronger action on curbing emissions and boosting adaptation as they draft their new national climate plans due early next year.

The G7 ministers in Italy made a firm pledge to submit their own such plans – called nationally determined contributions (NDCs) – by the February 2025 deadline “with economy-wide, absolute reduction targets” that cover all greenhouses gases and sectors “in line with 1.5C”. They also called on other major economies to do the same.

The post G7 offers tepid response to appeal for “bolder” climate action appeared first on Climate Home News.

For German Foreign Minister Annalena Baerbock, all “those who can” – and “in particular the strongest polluters of today” – should step up, in addition to industrialised nations that already provide funding. “Strong economies share strong responsibilities,” she said in a nod to G20 countries on Thursday at the Petersberg Climate Dialogue in Berlin, an annual gathering for the world’s top climate diplomats.

Baerbock’s views are widely shared by other rich countries, but they face stiff opposition from the upper-middle income nations – such as China and Saudi Arabia – referenced in her remarks.

Those governments argue that the 2015 Paris Agreement puts the responsibility of fulfilling climate finance obligations squarely on the shoulders of developed countries – and want to keep it that way.

Negotiators from China and Saudi Arabia spelled that out once again this week in Cartagena, Colombia, during this year’s first round of technical discussions that should pave the way to an agreement on the new collective quantified goal (NCQG) for finance at the COP29 climate summit in Azerbaijan.

“We will not entertain a renegotiation of the contributors and the recipients of NCQG,” said Chao Feng, China’s finance negotiator, on Wednesday. His words were repeated shortly afterward by Saudi Arabia’s Mohammad Ayoub.

More money for more action

The new climate finance goal is the most important decision expected to be taken at this year’s climate summit.

Experts believe an ambitious deal can play a crucial role in getting developing countries, especially the poorest ones, to commit to stronger action on emissions and adaptation as they draft their new national climate plans due in early 2025.

Without clear signals on the amount and quality of money on the table, the fear is that governments will fail to raise the bar on climate ambition and put an international goal of limiting global warming to 1.5C beyond reach.

Peak COP? UN looks to shrink Baku and Belém climate summits

After more than two years of discussions and with time running low, negotiators remain at odds over the most fundamental elements of the goal: how large the overall sum should be, what it needs to pay for, over how many years, and the best way to monitor the money.

At a four-day session in Cartagena ending this Friday, negotiators are attempting to iron out some of those knots and sketch the first outline of a deal.

Azerbaijan’s vision

In laying out his vision for November’s UN summit in Baku, the COP29 incoming president, Mukhtar Babayev, acknowledged in Berlin that finance is “one of the most challenging topics of climate diplomacy”, adding that there are “strong and well-founded views on all sides”.

“We are listening to all parties to understand their concerns and help them refine potential landing zones based on a shared vision of success so that we can deliver a fair and ambitious new goal,” he added.

For Marc Weissgerber, executive director of E3G’s Berlin office, Babayev’s speech outlined “important elements of a multifaceted solution to the finance challenges, but what is needed are clearly defined diplomatic pathways”.

“It needs to be seen how Azerbaijan can contribute – as a bridge-builder – to this essential challenge,” he added. 

Moving past $100bn

Talks have also been strained by eroding trust following rich nations’ failure to honour a pledge made nearly 15 years ago to mobilise $100 billion a year in climate finance for developing countries by 2020. They now “look likely” to have belatedly met the goal in 2022, according to an assessment by the Organisation for Economic Co-operation and Development (OECD) based on preliminary data that is not publicly available.

Germany’s Baerbock said on Thursday that industrialised countries need to “continue to live up” to their responsibilities and jointly fulfill their $100 billion payment”. But, to get beyond that mark, she called on “those who can” to join their efforts.

Baerbock argued that the world has changed since the signing of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 when developed countries that have since provided international climate finance made up 80% of the global economy.

Will blossom of reform bear fruit? Spring Meetings leave too much to do

Most developing nations strongly oppose any changes or reinterpretation of the UNFCCC that would lead to a reclassification of a country’s status.

E3G’s Weissgerber said the question of expanding the pool of contributors is linked with the development of ambitious climate plans. “Both sides must compromise,” he added. “The existing donor base needs to show that it can be trusted to honour its financial commitments, while at the same time, large emitters such as China and the Gulf States should send a clear signal of ambitious [emission] reduction efforts”.

Innovative sources of finance

Developing countries – excluding China – need an estimated $2.4 trillion a year to meet their climate and development needs. But, Baerbock pointed out in Berlin, those sums cannot come only out of government budgets already facing constraints.

So called “innovative sources of finance” are among the most talked-about options to unlock additional funds. Things like wealth taxes on billionaires or shipping levies have been rising up the political agenda this year, but still face either strong opposition or a lack of agreement over how the money should be used.

Much hope is also pinned on wide-ranging reforms of multilateral development banks to channel more money into climate action for the most vulnerable.

COP29’s Babayev said those institutions “have a special role” to play. But he expressed disappointment at the pace of change seen during last week’s Spring Meetings of the World Bank and International Monetary Fund.  “While we heard a great deal of concern and worry, we did not yet see adequate and sufficient action,” he said. “That must change.”

(Reporting by Matteo Civillini; editing by Megan Rowling)

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Stiell said this month that he personally “would certainly like to see future COPs reduce in size”, telling an audience at London’s Chatham House think-tank that “bigger doesn’t necessarily mean better”.

In Dubai, where the 2023 summit was held from November 30 to December 13, the Expo City site was so large that important delegates were ferried around on golf buggies while electric scooters were available to get around the public area, known as the Green Zone.

“Size does not necessarily translate to the quality of outcomes,” Stiell said in London, noting that the UN climate change secretariat (UNFCCC) is discussing the issue with the hosts of COP29 in Azerbaijan this year and COP30 next year in Brazil.

Last week, Climate Home reporters visited the COP29 host city of Baku, the capital of Azerbaijan – on a tour sponsored by the COP29 presidency – and also the location of COP30, the Brazilian Amazon city of Belém, to see how preparations are going for the November 2024 and 2025 gatherings.

Azerbaijan’s government is expecting just 40,000 people to come to the Baku Olympic Stadium for the talks this year, while Belém’s remoteness, congested roads and lack of hotels are likely to substantially limit how many people can attend the “Amazon COP”.

The number of people attending COPs has shot up in recent years. Close to 40,000 people went to COP26 in Glasgow, around 50,000 were in the Egyptian resort of Sharm el-Sheikh for COP27 and nearly 84,000 headed to Dubai last year. But most of the 28 COPs held since 1995 have been attended by fewer than 10,000 people.

Just over half of last year’s participants belonged to government delegations, with most of the rest comprising staff working at the conference or activists from non-governmental organisations (NGOs).

In practice, the boundaries of these categories are blurred though, as government delegations often include business representatives, NGO employees, journalists and others.

Baku’s Olympic Stadium

The government of Azerbaijan will host COP29 in the country’s Caspian seaside capital, Baku. A member of the organising committee told Climate Home they are expecting around 40,000 people.

The government has not had much time to prepare, as it was only tasked with the presidency last November at COP28 after Eastern Europe’s geopolitical divisions delayed the decision on which country would host the summit.

But it already has a venue: the Olympic Stadium on the outskirts of Baku. According to state media, COP29 chief operations officer Narmin Jarchalova said temporary structures will be built around the stadium to accommodate the negotiations and side events. These are likely to be in car-park areas.

The city is used to hosting major events. Ten thousand come each year for Formula One’s Baku Grand Prix and the 69,870-capacity Olympic Stadium has hosted the 2015 European Games, big concerts, the 2019 Europa League football final and Euro 2020 matches, although no Olympic Games despite the name.

Climate Home visited the area in April while in Baku, as part of a press trip organised by the COP29 presidency team. The stadium is connected to the city centre, where most hotels are located, by a Soviet-era metro railway with a one-way journey taking around 45 minutes.

A car journey should take about half of that, 20 minutes, but heavy traffic gridlocked the main roads in and out of Baku when Climate Home visited.

The Baku Olympic Stadium (Photo: Matteo Civillini)

Climate Home asked the COP29 team for information on how the temporary COP facilities will be built, powered and heated sustainably during the summit, but had received no response at the time of publication.

In February, Climate Home revealed that the government had told hotels in Baku not to sell rooms for COP29’s November 11-22 dates until further notice.

In London this month, UN climate chief Stiell said, with regard to the number of participants, that “we have an opportunity with Azerbaijan and we’re engaging with them”. He did not give further details.

COPs usually feature one big climate demonstration on the middle Saturday of the two-week talks. The UNFCCC is talking to the COP29 team about how this will be enabled.

Protesters march on the middle Saturday of COP26 in Glasgow, UK, in 2021 (Photos: Insure Our Future)

In a meeting at the energy ministry last week, COP29 CEO and deputy energy minister Elnur Soltanov told journalists, including Climate Home, that these discussions were “fruitful”.

Human rights groups like Freedom House say Azerbaijan does not respect freedom of assembly. Police violently arrested opposition protesters in 2019.

Soltanov was asked if the climate march will be allowed to take place in the city, which is governed by Azerbaijan’s police force, or only in the COP29 venue, which is under the jurisdiction of UN security guards.

He replied that “this is too specific a question” but said that protest is “part and parcel of people expressing their views, their anger, their desperation”.

Brazil’s Amazon COP

On Belém, which is in northern Brazil near the Amazon rainforest, Stiell said he was “actively discussing with the Brazilians how we can reduce the size of the COP so that the logistics of it can be supported at that hosted destination”.

Last June, Brazilian climate ministry official André Corrêa Lago told local media he was expecting 40,000-50,000 people. But there are concerns that the city will struggle to cope with those numbers.

Belém is not a major tourist destination and has less than 6,000 hotel rooms. Even at last year’s Amazon Summit – a smaller event than a COP – participants reported difficulty finding rooms and rates soared.

Construction workers are currently turning a 1.6 km-long disused airport runway into the Parque de Cidade (City Park), which will be the size of about 70 football pitches. The park and its new buildings will be the main COP30 venue.

The government of Pará State says it is almost one-third finished. The federal government, meanwhile, is reportedly considering hosting part of COP30 in bigger cities like Sao Paulo or Rio de Janeiro.

A spokesperson for the federal government told Climate Home that “all possibilities to enable the reception of delegations and visitors are being evaluated”.

As well as the park and its new buildings, some of the conference will be held in an existing conference centre on the park’s southern tip called The Hangar – which hosted last year’s Amazon Summit.

The Hangar convention centre (Photo: Alice Martins Morais)

For COP30 delegates though, finding a hotel room and getting to the venue are likely to be challenging. 

A spokesperson for the COP30 organising committee said last week that while 84,000 people went to COP28, the peak daily attendance was just 41,000 at the beginning of the conference when heads of state made their speeches.

An Ibis hotel near the COP30 site (Photo: Alice Martins Morais)

The spokesperson told Climate Home the organisers are looking at bringing in cruise ships for COP participants to sleep on, refurbishing schools to serve as hostels and encouraging people to rent out their rooms on Airbnb.

To promote the “modernisation” of the city’s existing hotel rooms, the government has given hotel operators tax exemptions on purchases for new equipment like minibars, televisions and air-conditioning.

The city’s airport, which the government aims to improve before COP30, has few regular international connections and is over three hours by plane from Brazil’s major hubs like Sao Paulo and Rio de Janeiro. 

There are no trains to Belém and getting the bus from Rio or Sao Paulo can take more than two days.

The Belém Bus Rapid Transit system is scheduled to be completed by COP30 (Photo: Alice Martins Morais)

Even inside the city, transport is challenging. The roads are congested, particularly in the centre where most of the hotels are, during rush-hour and when it rains.

The authorities have tried to solve the problem by widening roads and building dedicated bus lanes for a Bus Rapid Transit system.

While these are being constructed, they have made traffic worse – but the body in charge told Climate Home work is progressing according to schedule and should be completed by the second half of 2024 – well before the UN climate summit the following year.

“The new fleet will reinforce the capital’s transport system for COP30,” said a spokesperson for the Metropolitan Transport Management Centre, adding that 40 of the 265 new air-conditioned buses will be electric.

Argentinian scientists condemn budget cuts ahead of university protest

Nonetheless, the remoteness of the location is likely to translate into a bigger carbon footprint for delegates travelling from overseas.

While COPs have a sizable carbon footprint, researchers investigating misinformation have found this is often exaggerated on social and traditional media by those trying to undermine climate action.

Examples include pictures of private jets with captions falsely associating them with COP or of biofuel generators with captions erroneously claiming they are diesel.

Questioned about COPs’ carbon footprint by an audience member at London’s Chatham House, UN climate head Stiell replied that “at every COP, we get the reports – how many private planes [and] the CO2 footprint for hosting those COPs”.

But, he added, “taking a very pragmatic view, we need the right people around the table in order for this process to work and there will be a cost to that. How you ensure that those that are present are the ones necessary to contribute positively to the process is also important.”

(Reporting by Matteo Civillini in Baku, Alice Martins Morais in Belém and Joe Lo in London; videos by Fanis Kollias; editing by Joe Lo and Megan Rowling)

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Just a few kilometres further south, however, local fishermen in Mbour, the country’s second-largest fishing port, are struggling. The beaches where they keep their boats are being progressively eaten away by rising seas that also threaten their homes.

The stark contrast between the neighbouring coastal areas highlights how global funding for climate projects – largely taxpayers’ money from rich countries – often fails to help those shouldering the burden of warming impacts, especially when it is being used to mobilise more private investment for green aims.

“They prioritise Saly because the hotels are wealthy,” said Saliou Diouf, a retired fisherman who lost his house in Mbour to encroaching waves. “The World Bank should help the most vulnerable.” 

Map showing the location of the neighbouring communities of Saly and Mbour on Senegal’s coast (Graphic: Fanis Kollias)

Le Lamantin is one of a dozen upscale hotels in sub-Saharan Africa acquired by Mauritius-based Kasada Hospitality Fund LP – whose investors are Qatar’s sovereign wealth fund and multinational hotel giant Accor – which it is revamping in accordance with EDGE, a green building certification created by the World Bank.

Kasada was granted over $190 million in guarantees by the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA), and loans of up to $160 million by its private-sector lender, the International Finance Corporation, to help it snap up hotels across Kenya, Nigeria, Ivory Coast, Rwanda, Namibia and Senegal, and spruce them up as Accor brands like Mövenpick.

The Mövenpick Resort Lamantin Saly, where a standard hotel room costs about £220 a night (Photo: Jack Thompson)

MIGA, the little-known insurance arm of the World Bank Group, has counted its backing for the hotels as part of its climate efforts for the past three years, according to annual sustainability reports.

The five-star resort in the West African nation of Senegal, where rooms cost at least £220 a night ($270), is being refurbished to consume at least 20% less energy and water than other comparable buildings by its owner Kasada, which expects it to obtain EDGE certification this year.

Teresa Anderson, global lead on climate justice for ActionAid International, told Climate Home it is “shocking that what little funds there are for climate action are benefiting luxury hotels”.

 

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Una publicación compartida de Mövenpick Resort Lamantin Saly (@movenpicklamantinsaly)

“Climate finance must be used to help those most vulnerable – not to help the world’s wealthiest add a climate hashtag to their Instagram posts by the pool,” she said.

MIGA told Climate Home its support for Kasada is primarily aimed at developing Senegal’s tourism sector and creating jobs, adding that refurbishing hotels can also have beneficial climate impacts and play an important role in decarbonising the hospitality industry.

Mbour, just a few miles from the pristine beaches of Saly, is the second-largest fishing hub in Senegal with 11,000 fishers. (Photo: Jack Thompson)

‘The money is missing’

In nearby Mbour, however, the fishing community feels left behind.

“I was born here, I grew up here – when I was a child, the sea only came up to the last pole,” Diouf told Climate Home, pointing to the remnants of a Portuguese-built pontoon used to moor colonial ships in the 1800s. 

In just one generation, he said, the sea has gobbled up more than 100 metres of beach in Mbour, forcing 30 families to abandon their houses and threatening hundreds more. A quarter of the Senegalese coastline – home to 60% of the population – is at high risk of erosion.

Mbour’s fast-disappearing shore is a crisis for its 11,000 fishers as big swells destroy their boats, crammed into the remaining patch of sand.

But in Saly, it’s a different story. Here, between 2017 and 2022, under a separate project, the World Bank invested $74 million in beach protection, building 19 stone walls, groynes and breakwaters to reclaim 8-9 kilometres of hotel-lined beachfront, popular with tourists.

The World Bank Group said the project helped preserve around 15,000 direct and indirect jobs by saving tourism infrastructure, while also protecting two fishing villages in Saly.

Satellite data shows the changing coastline in Saly (north), where protective infrastructure was developed, and Mbour (south), which has none. (Photo: Modified Copernicus Sentinel data [2024]/Sentinel Hub)

The World Bank Group (WBG) said its units work together to avoid trade-offs. “It’s not to either support hotels and the tourism sector as a driver of development, or to enhance the resilience of local communities – the WBG does both,” it said in a written response to Climate Home.

But fishermen in Mbour – which was outside the scope of the Saly coastal protection infrastructure project – are not benefiting from that approach, and even say the works in Saly have exacerbated erosion in their area. The Mbour artisanal fisheries council has devised a climate adaptation strategy to address the problem. 

One of its coordinators, Moustapha Senghor, said seawalls and breakwaters are needed, but there are no funds for what would amount to “a colossal investment”. “We know exactly what we need to do, but the money is missing,” he said.

Sea level rise is threatening beach-side homes and swallowing coconut trees that protect the coastline in Mbour, Senegal. (Photo: Jack Thompson)

Private-sector trillions

Governments and climate justice activists are putting pressure on the World Bank to significantly step up its role in funding climate projects, especially to help the most vulnerable countries and communities. 

For the past three years, a group of countries led by Barbados’ Prime Minister Mia Mottley has called for reforms so that the bank can better address climate change.

At the same time, wealthy nations have been reluctant to inject more capital into its coffers, while attempts at tinkering with the balance sheet to squeeze out more climate cash only go so far. 

For World Bank Group President Ajay Banga, the real solution lies in greater private-sector involvement, using scarce public money as a lever to help mobilise huge dollar sums for climate and development goals this decade.

“We know that governments and multilateral institutions and philanthropies all working together will still fall short of providing the trillions that we will require annually for climate, for fragility, for inequality in the world. We therefore need the private sector,” Banga told media ahead of this week’s annual Spring Meetings of the World Bank and the International Monetary Fund.

MIGA’s guarantees can be a key driver of climate investments in developing countries. (Graphic: Fanis Kollias)

Following suggestions from a group of CEOs convened by Banga, the World Bank Group announced in February a major overhaul of its guarantee business to enable “improved access and faster execution”. The goal is to triple issuances, including those from MIGA, to $20 billion by 2030, with a significant proportion of that expected to support green projects.

MIGA – as a provider of guarantees aimed at encouraging private capital into developing countries – may not be the obvious choice to help low-income communities like Mbour’s fishers. 

But, in its 2023 sustainability report, the agency wrote: “because the poorest are the most vulnerable to climate change, MIGA is working to mobilize more private finance to scale up climate adaptation, resilience and preparedness”.

Last year, less than one percent of MIGA’s total guarantees directly supported climate adaptation measures, according to its annual report.  

The guarantees generally act as a form of political risk insurance, making an investment less risky and giving companies access to cheaper loans as a result.

MIGA’s 2023 sustainability report showcases the Kasada-owned hotels as an example of its efforts to “rapidly ramp up” private capital for climate action, with the agency providing its highest volume of climate finance last year.

Struggle to fund adaptation

But some experts argue the World Bank Group should be targeting its efforts more closely on communities who are struggling to survive as global warming exacerbates extreme weather and rising seas. 

Vijaya Ramachandran, a director at the Breakthrough Institute, a California-based environmental research centre, said projects like the Kasada-backed hotels are “not where the dollars are best spent from a climate perspective”.

Ramachandran, a former World Bank economist, co-authored a study last year analysing the climate portfolio of the bank’s public-sector lending arms, which exclude MIGA. It found a lack of clarity over what constitutes a climate project and showed that hundreds of projects had been tagged as climate finance despite having little to do with emissions-reduction efforts or adaptation.

Ramachandran told Climate Home that, in the case of MIGA’s backing for the African hotels, Kasada “should just be doing the energy saving itself as part of its own efforts to address climate change”. 

Holidaymakers enjoy a spacious, ocean-side pool at the five-star Le Lamantin resort in Saly, Senegal. (Photo: Jack Thompson)

Olivier Granet and David Damiba, managing partners of Kasada Capital Management, told Climate Home the hotel investment fund had always planned to be “a leader in energy and water efficiency in its properties”. 

But, they added, the financial and technical support of MIGA and the IFC had helped them implement their strategy “further and more easily”, especially during the COVID-19 pandemic. Eight Kasada-owned hotels have already been certified under EDGE and the rest are expected to achieve the standard this year, they noted.

Ramachandran said making hotels energy-efficient is a good thing – “but from a public finance perspective, for poorer African countries the focus should be on adaptation and making them more resilient”.

Developing countries need an estimated $387 billion a year to carry out their current adaptation plans, but in 2021 they received only $24.6 billion in international adaptation finance, according to the latest figures published by the Organisation for Economic Co-operation and Development.

MIGA to miss climate target?

Once regarded by campaigners as the “World Bank’s dirtiest wing” for its support of fossil fuels, MIGA has come under mounting pressure to shift its subsidies in a greener direction, in line with broader institutional goals.

In response, the agency has committed to throw more of its financial weight behind projects that aim to cut greenhouse gas emissions or alleviate the impacts of climate change. 

In 2020, it revealed a plan to dedicate at least 35% of its guarantees to climate projects on average from fiscal year 2021 through 2025, embracing a target set by the wider World Bank Group. 

MIGA conceded at the time this would be “a challenge” – and it now looks likely to fall short of the goal. In 2023, climate finance represented 28% of its guaranteed investments.

According to the agency’s 2023 sustainability report, 31 out of 40 projects it supported with guarantees last year had a climate mitigation or adaptation component, but it did not disclose what percentage of each was counted as climate finance.

Meanwhile, over the last three years, MIGA has backed three gas-fired power plants in Mozambique and Bangladesh, while it is also planning to support an additional one in Togo. 

In monetary terms, MIGA’s annual provision of climate guarantees has risen from just over $1 billion in 2019 to $1.5 billion in 2023, pushing up the total size of its climate portfolio to $8.4 billion. But the headline numbers only paint a partial picture, clouded by a lack of transparency in the data.

MIGA’s portfolio of climate investments has grown in the past six years. (Photo: MIGA Climate Change)

In response to Climate Home’s request for a full list of MIGA’s climate projects, the agency said it could not disclose the information for confidentiality reasons. 

“Our clients are private-sector investors or financiers, and we do not have agreement to release disaggregated information about their investments and financing,” a MIGA spokesperson said.

The only clues about the make-up of MIGA’s climate portfolio come in its glossy annual sustainability reports, which highlight a handful of initiatives. 

Climate Home News reviewed these reports from the last three available years – 2021, 2022 and 2023 – and tracked highlighted projects, which are framed as positive examples of climate finance. 

Motorways and elite universities 

They show that support for renewable energy made up a quarter of MIGA’s climate guarantees in 2023. 

But its track record of climate investments raises questions about the agency’s criteria for designating projects as climate finance and how it allocates those resources to help people most in need, experts said. 

Karen Mathiasen, a former director of the multilateral development bank office in the US Treasury, said MIGA should not be using its resources to expand investment in things like luxury hotels and then counting them as climate finance. 

“There is a real problem in the World Bank Group with greenwashing,” added Mathiasen, who is now a project director with the Center for Global Development.

World Bank approves green reforms, appeals for more money

MIGA said it calculates the climate co-benefits from its projects using the same methodologies as other multilateral development banks, and applies them consistently according to a “rigorous internal consultation and review process”. 

Large infrastructure projects feature heavily in MIGA’s climate portfolio. 

For example, a group of international banks, including JP Morgan, Banco Santander and Credit Agricole, have received a total of €1.4 billion in guarantees to bankroll the construction of a new motorway in Serbia, in an area prone to severe flooding. 

The 112-km dual-carriageway, in the West Morava river valley, is implementing measures to reduce flood risk, including river regulation – and so was counted as climate finance.  

In 2022, MIGA’s largest climate guarantee – worth €570 million ($615 million) – helped finance the construction of a new campus in Morocco’s capital Rabat for the Mohammed VI Polytechnic, a private university owned by mining and fertiliser company OCP Group and frequented by the country’s elite.

According to MIGA, the project would seek to obtain LEED (Leadership in Energy and Environmental Design) green-building certification “for key facilities”, and include hydraulic structures to enhance the climate resilience of the campus.

Similarly, support for a new hospital in Gaziantep, Turkey, was tagged as 100% climate finance because it features energy efficiency measures and flood drainage works. 

In 2023, just under half of MIGA’s climate guarantees went towards “greening” the financial sector in mainly middle-income countries like Argentina, Colombia, Hungary, Algeria and Botswana. 

These guarantees are intended to help local banks free up more capital and boost loans to climate projects, although in some cases they are only expected to do so on a “best effort basis” involving no strict obligation, according to MIGA’s annual reports.

MIGA said this clause is included for regulatory reasons and requires banks to “take all necessary actions to provide climate loan commitments” as far as is “commercially reasonable”.

UN climate chief calls for “quantum leap in climate finance”

Call for clarity 

Ramachandran of the Breakthrough Institute said MIGA should demonstrate the outcomes of its climate finance projects “in terms of reduced emissions or of improved resilience, (and) what the overarching strategy is to make sure the money is best spent”. 

“Instead the focus is simply on dollar amounts,” she added – a criticism rejected by the World Bank Group. 

MIGA said it supports projects in all sectors that contribute to development and enables the inclusion of emissions-cutting and climate adaptation measures in their design and operation. 

Former U.S. official Mathiasen believes MIGA could be a powerful engine to mobilise more private money for climate action, but said it needs a cultural change to focus more on results rather than numerical targets which give staff an incentive to “pump up the numbers”. 

“A little bit of an add-on – that is not a climate project. There needs to be clear, transparent criteria of what constitutes a climate project,” she said. 

(Reporting by Jack Thompson in Senegal and Matteo Civillini in London; additional reporting by Sebastian Rodriguez; editing by Megan Rowling, Sebastian Rodriguez and Joe Lo; graphics by Fanis Kollias)

This article was amended on April 17 to clarify that the Qatar Investment Authority and Accor are investors in the Kasada Hospitality Fund. It is run by Kasada Capital Management.

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The equivalent of ten football pitches of tropical forests – 3.7 million hectares – were lost every minute in 2023 as the result of human activities and natural disasters, according to analysis carried out by Global Forest Watch.

While forest destruction slowed dramatically in Brazil and Colombia, this was offset by sharp increases in Bolivia, Nicaragua and Laos.

“The world took two steps forward, two steps back when it comes to this past year’s forest loss”, said Mikaela Weisse, Global Forest Watch Director at the World Resources Institute (WRI).

Tropical forests are one of the world’s best defenses against global warming, as they absorb greenhouse gases. But they are also where over 96% of human-made deforestation occurs worldwide, according to WRI.

Missing targets

While total tree loss in the tropics decreased slightly last year, analysts estimated human-caused deforestation driven by agriculture, commodities extraction and urban expansion continued rising. 

That’s despite a 10% reduction being needed every year to meet a pledge to “halt and reverse forest loss and land degradation by 2030” signed by 145 countries, including large forest nations like Brazil, Indonesia and the Democratic Republic of Congo.

Initially introduced as part of a voluntary commitment by governments at Cop26 in Glasgow, the target was mentioned for the first time in a Cop decision at last December’s climate summit in Dubai.

Weisse said the goal “has always been an ambitious one” and “it will certainly be difficult” to ensure enough progress from all countries to meet the target.

“I still find a lot of hope in the fact that Brazil, Colombia, and Indonesia have managed to massively curb their rates of forest loss in recent years”, she added. “Those countries have demonstrated how critical it is to have strong political will to combat deforestation”.

Lula’s deforestation busting

Brazil continued to be the country that lost the most tropical forest in 2023 because of the size of its immense rainforests. But its losses dropped by more than a third last year, reaching the lowest level since 2015.

Progress in Brazil coincided with the return to office of President Luiz Lula da Silva. In his first full year in the post, he strengthened law enforcement against illegal loggers, revoked anti-environmental measures introduced by his predecessor, Jair Bolsonaro, and extended Indigenous rights.

Brazil is planning to put the protection of forests at the heart of its climate summit in 2025, which is set to take place in Belém, known as the gateway to the Amazon rainforest.

“Holding Cop30 in the heart of the forest is a powerful reminder of our responsibility to keep the planet within our 1.5°C target”, said Marina Silva, Minister for the Environment and Climate Change, last December.

In neighbouring Colombia, the rate of tree loss dropped by half in 2023, primarily as a result of policies introduced by President Gustavo Petro.

Forest protection is among the goals being negotiated by the leftist government with armed groups as part of wider efforts to bring “total peace” and end decades of violence.

Experts have also suggested that criminal groups have taken it upon themselves to rein in illegal logging as a way to strengthen their hand in the discussions.

Progress lost

But positive developments in forest conservation in Brazil and Colombia have been all but cancelled out by tree losses spiralling out of control elsewhere.

In Bolivia, forest losses remained at record-breaking levels for a third year in a row, driven by uncontrolled expansion of soybean and beef production and exacerbated by exceptional wildfires.

The government, which has prioritised development and agricultural exports over forest protection, has not joined the 2030 pledge.

It was at loggerheads with Brazil at the Amazon Summit last year, when it opposed the inclusion of any references to the target in an outcome document signed by the leaders of eight countries.

Dramatic upticks in deforestation were also seen in Nicaragua, in Central America, and Laos, in South-East Asia, last year.

Expectations mount as loss and damage fund staggers to its feet

Nicaragua lost over 4% of its standing forest in 2023 alone, as the authoritarian regime of Daniel Ortega continued to turn a blind eye to illegal logging.

Disregard for the preservation of forests, and the respect of the rights of Indigenous people living there, is also shutting the country’s access to international financial support.

The UN’s Green Climate Fund pulled out of a forest conservation project last month after local community groups complained about a lack of protection in the face of escalating human rights violations in the area.

In Laos, forest loss nearly doubled last year reaching an all-time high. Rapid expansion of farming, primarily driven by Chinese investments, is believed to be the main cause.

Financial incentives

WRI’s Weisse said that, while the cases of Brazil and Colombia demonstrate the importance of political will in reversing deforestation, that alone will not be enough.

“Political winds continuously change”, she added. “In order for progress to endure in any of the above countries will likely take making it more valuable to keep forests standing than to cut them down”.

Carbon credits have long been touted as a primary way to achieve that. But their credibility has come under fire over the last few years as numerous schemes faced allegations of exaggerating climate claims and failing to safeguard local communities. Various efforts to strengthen their rules are underway.

Regulations are also being introduced on the demand side, blocking access to markets for goods produced on deforested land.

In the European Union, firms will soon have to demonstrate that seven commodities, including beef and soy, are not linked to deforestation. Commodities-producing countries, such as Indonesia, have attacked the regulations which they have branded as protectionist.

The post “Two steps forward, two steps back” – Governments off course for forest protection target appeared first on Climate Home News.

In the Danish port city, as dozens of ministers fired the starting gun on the annual climate diplomacy race, the focus was on putting December’s landmark Cop28 decision into practice. In Dubai, governments agreed for the first time to start shifting away from fossil fuels. But officials are now contemplating how to make that work in the real world – and, crucially, who will pay for it.

Meanwhile, in oil and gas-rich Texas, top fossil fuel executives took to the stage at the energy industry conference CERAWeek, where they cast doubt on the transition away from fossil fuels agreed at Cop28, with Saudi Aramco CEO Amin Nasser calling it a “fantasy”.

In the courts, Republican-led US states sued the Biden administration over its recent decision to pause new approvals for fossil gas exports.

Energy transition crossroads

For climate policy observers, these opposing forces are not entirely surprising.

Romain Ioualalen, global policy manager at campaign group Oil Change International, said the Cop28 decision puts the fossil fuel industry at a crossroads: either it pours more investment into renewable energy, or it doubles down on oil, gas and coal in a bid to undermine the green shift as much as possible.

“It seems to have chosen the latter – and unless governments immediately intervene to end fossil fuel expansion, people and planet will pay the price,” he added.

Pushing for faster adoption of clean energy certainly appears to be the intention on the international climate policy stage, where the political machinery is clanking back into gear after what Danish climate minister Dan Jørgensen dubbed “historic progress” in Dubai.

“Important decisions have been made on the action,” he told the start of the Danish summit. “Now, how do we pay for it?”

Cop28 president, Sultan Al Jaber, delivers remarks at the Copenhagen Climate Ministerial, flanked by Cop29 incoming president Mukhtar Babayev. REUTERS/Ali Withers

The question of finding money for the energy transition in developing countries will be front and centre this year as countries need to agree on a “new collective quantified goal” (NCQG) for climate finance at Cop29 in November, which will kick in from next year.

The battle lines are already drawn: developing nations want their richer counterparts to stump up the highest amount of cash with the fewest strings attached. Developed countries want other governments, including China and fossil fuel-rich Gulf nations, to join the list of donors.

The size of the money pot – and the conditions to tap into it – will be particularly important for emerging economies. They want help to finance the costly emission-slashing measures they are being asked to take.

For Mukhtar Babayev, Azerbaijan’s incoming Cop29 president, the negotiations on the new finance goal represent an opportunity to rebuild trust. Unlocking more funds, he told fellow ministers in Denmark, “will empower all parties to raise the ambition” of their upcoming climate plans.

Cop Troika urges “high-ambition” NDCs

The updated nationally determined contributions (NDCs) that all countries have been asked to submit by early 2025 was the other main talking point in Denmark on Thursday and Friday.

The so-called ‘Troika’ of the hosts of Cop28 (UAE), Cop29 (Azerbaijan) and Cop30 (Brazil) has tasked itself with building momentum and prompting countries to get moving.

On the eve of the Danish summit, the Cop presidencies sent a letter to all parties calling for “early submissions of high ambition NDCs that decisively take forward the UAE Consensus [the agreement struck in Dubai]”.

UN’s climate body faces “severe financial challenges” which put work at risk

The Troika “will aim to raise and reframe ambition for the development process” of the national climate action blueprints, pushing for more support, resources and finance, it added.

But the missive did not go down well with developed countries – and, above all, with the United States.

Its deputy special envoy for climate Sue Biniaz said she was “quite surprised” at the Troika’s suggestion that this year’s “focus on NDCs should be all about support” and that the Cop hosts defined a “high ambition NDC” for developed countries as one that includes finance for developing countries. Using that kind of wording could be “highly prejudicial” to climate finance negotiations, she warned.

Do as I say, not as I do

In the letter, the Cop host governments also pledged to demonstrate their own commitment by submitting NDCs that are aligned with the Paris Agreement goal of limiting global warming to 1.5C.

That announcement raised some eyebrows. The UAE and Brazil have some of the world’s biggest plans to expand fossil fuel production between now and 2050, while Azerbaijan’s economy primarily relies on fossil fuel extraction and it is poised to hike gas exports.

African dismay at decision to host loss and damage advice hub in Geneva

Those intentions clash with what the International Energy Agency (IEA) says is required to remain on a 1.5C trajectory: fossil fuel demand needs to fall 80% by 2050, meaning no new upstream oil and gas projects are needed, as of now.

Harjeet Singh of the Fossil Fuel Non-Proliferation Treaty Initiative said that discrepancy “raises serious questions about the alignment between [the Troika’s] words and their actions”.

“These countries must disentangle themselves from fossil fuel interests and lead climate action by example, pressuring wealthier nations that continue to shirk their historic and moral responsibilities,” he added.

Fossil fuel reality check

The rhetoric coming from the fossil fuel industry assembled at Houston’s CERAWeek suggests strong pressure will be needed.

Saudi Aramco CEO Nasser called for more, not less, investment in oil and gas, as he claimed that the current energy transition strategy is “visibly failing on most fronts”.

President and CEO, Amin Nasser, asserts at #CERAWeek 2024 that energy consumers around the world need lower-carbon energy with minimal disruptions to their daily lives and calls for a new, multi-source, multi-speed, and multi-dimensional road to a realistic transition#aramco pic.twitter.com/OEkQvuK9HD

— aramco (@aramco) March 19, 2024

Meg O’Neill, chief executive of Australian oil and gas firm Woodside Energy, said the shift to clean energy cannot “happen at an unrealistic pace”. The bosses of oil giants Shell, ExxonMobil and Petrobras echoed similar views.

One fossil fuel executive who is equally at home in industry talking shops and climate diplomacy circles is Cop28 president Sultan Al Jaber.

On Tuesday, he told attendees at the oil and gas conference in the US that “there is just no avoiding that the energy transition will take time”.

Two days later, over in Denmark, he emphasised that “governments and all relevant parties” have to be honest about what moving away from fossil fuels will involve.

“We can’t misguide or mislead anyone anymore,” he said, sending out a message that could apply on both sides of the Helsingør-Houston divide. “We must confront the facts very early. Those who are in this room. It is our job, our duty to do that.”

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The UNFCCC executive director Simon Stiell made an urgent plea for more funding to over 40 ministers and negotiators gathered on Thursday in Helsingør, Denmark, for the first major climate summit of the year. 

“Our organization, the UNFCCC, now faces severe financial challenges,” he said. “We are attempting to meet an ever-growing mandate. Our job is to make your job easier. To carry out the tasks you have all agreed we should do, but we can only do this if we have the funding support.”

Stiell highlighted that the organisation’s budget “is currently less than half funded”. 

Budget headache

The UNFCCC estimated it needed around €152m ($165m) in the 2024-2025 period to carry out an ever-growing number of  activities that countries ask the climate body to be in charge of.

But, in Bonn last June, countries agreed only to a core budget of €74m ($80.4m) with compulsory contributions provided by governments based on their wealth. This was a 19% increase on the previous two years’ budget, ignoring inflation.

That left the climate body with a hole of €78m ($85m) that would need to be filled with voluntary donations from governments and private entities.

This money is needed to arrange dozens of meetings across the world on key negotiating strands like the new climate finance goal – to be agreed at COP29 – the global goal on adaptation and a new carbon market under Article 6 of the Paris Agreement.

Voluntary donations missing

But, so far this year, the UNFCCC has managed to raise less than $9m in voluntary donations. The United Kingdom has given the largest sum – $2.1m – followed by the Open Society Foundations ($1.5m), the Rockefeller Foundation ($1.3m) and Germany ($0.9m).

The climate body is also scrambling to collect millions of dollars in compulsory contributions that countries failed to fork out in previous years.

African dismay at decision to host loss and damage advice hub in Geneva

The funding shortfall is fuelling a sense of angst among UNFCCC staff, who are forced to constantly find new ways to shuffle money around in emergency mode without any long-term certainty, according to a source with knowledge of the UNFCCC’s operations.

The UNFCCC has repeatedly warned governments of the risk of leaving them at the mercy of voluntary donations.

During discussions over the size of its budget last year, it wrote that “prohibitive dependence on supplementary funding” would result in “jeopardizing the sustainability of the UNFCCC secretariat and limiting support to critical recurring and long-term activities”.

Urgent pleas

At Cop28, soon after the gavel came down in Dubai, Simon Stiell urged governments to stump up more cash for unfunded operations.

But his plea went unheeded, prompting Stiell to issue a new request for funding in a letter to all countries last week. He then used his speech at the Danish climate summit to bring his argument out in the open.

“This is me once again ringing that alarm bell,” he said. “I urge you to respond as soon as possible, to ensure you get the support you need and have requested from us.”

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A two-year drought – its worst in decades – was followed last November by devastating floods. The double crisis is estimated to have killed tens of thousands of people, displaced millions more, destroyed livelihoods, and exacerbated severe hunger and water scarcity.

For the East African nation, this was not just a one-off, freak event. Cycles of drought and flooding are becoming more frequent, intense and unpredictable as civilians also come under attack by militants waging an ongoing civil war.

Channeling donor cash to help fragile countries cope with the growing impacts of climate change should be the core mission of the Green Climate Fund (GCF). But, since its creation nearly 14 years ago, barely a single dollar from the UN’s flagship fund has reached Somalia.

Its new head wants to change that. Mafalda Duarte marked her first semester as the fund’s executive director with a visit to Somalia where she promised a different approach to get more money to the world’s poorest.

“We have to be deliberate, be more proactive,” she told Climate Home in an exclusive interview. “We cannot operate like in other countries where we might just sit and wait for them to bring proposals to us. Because of low capacity [in vulnerable countries], we have to work hand in hand with government to put forward a plan.”

Current mandate “not enough”

The Green Climate Fund, which has received pledges of $12.8 billion for the next four years, finances 253 projects in 129 developing countries. It has a mandate to split its resources equally between emissions-cutting and adaptation activities – and to allocate at least half of the latter to the most vulnerable countries.

But Duarte told Climate Home that “those parameters are not enough” anymore. “Even though we are compliant, it is still not enough to get this to support countries like Somalia,” she said.

A Somali herder tries to keep his cows alive amid a devastating drought. Photo: UNICEF Ethiopia/2022/Mulugeta Ayene

Having listened to the priorities of ministers, business leaders and civil society in Mogadishu, the Green Climate Fund is now preparing to invest more than $100 million in Somalia over the next 12 months.

A first project – already in the pipeline before this month’s visit – should give isolated communities access to off-grid solar energy, as part of a broader pan-African effort covering 70 million people. Funding proposals to boost the climate resilience of Somalia’s agricultural sector and improve food security could be put in front of the fund’s board for approval as early as July.

Building resilience

The Portuguese executive director, who took the fund’s helm last August, said this new targeted approach would not be limited to Somalia. “You will see us do more,” she said. “We will look at the list of the most vulnerable countries, where we are doing almost nothing at the moment, and we will endeavour to do something similar.”

Welcoming the direction charted by Duarte, Liane Schalatek, associate director of the Heinrich Böll Foundation, said “pushing” the fund’s biggest partners, like the World Bank and UN agencies, to use its money for more work in vulnerable countries will be key to its success.

“A country like Somalia will depend on international access entities that often want to do the easier rather than the harder stuff, so it’s important to overcome their reluctance,” added the experienced GCF watcher.

UN climate fund axes Nicaragua forest project over human rights concerns

Duarte believes that UN agencies and multilateral development banks need to coordinate their efforts to limit the damage from future climate disasters. “We cannot keep being reactive and provide humanitarian assistance when the next mega-drought or flood hits,” she said. “We have to work collectively and build the resilience of the communities.”

The GCF’s head wants to shake up how the fund operates more widely. Setting out simpler rules and processes is the next item on her reform agenda, with the goal of moving away from “a one-size-fits-all approach”.

Poorer countries with less administrative capacity have long complained about the difficulty and time it takes to access the fund’s resources, despite a dedicated programme to help them do that.

“Whether it is a country like Somalia, or one like Brazil or India, it doesn’t matter – it is all the same [now],” Duarte said. “That, of course, does not work. We are not operating in the same environment, with the same capacity. We cannot be this onerous and demanding.”

Overcoming local challenges

Translating ambition into real dollars on the ground will not necessarily be easy, given the barriers that have traditionally kept investors away from the most fragile nations.

Conflict, weak institutions and poor governance raise the possibility of projects not achieving their objectives or, worse, seeing their precious resources squandered. For many, the risk is too much to stomach.

Is water provision in drought-hit Zambia climate ‘loss and damage’ or adaptation?

The Green Climate Fund finds itself walking a tightrope. On the one hand, it has faced criticism over the years for being too cautious. But, on the other, it recently pulled out of a forest protection project in Nicaragua over human rights concerns after a three-year complaints process.

A GCF spokesperson said the fund is now “working to better understand what the real risk is and mitigate that”. In Somalia, for example, that means learning from the World Bank which has worked extensively with local financial institutions, they added.

For Schalatek, the GCF should not be afraid of providing money to what she describes as “climate finance orphans” that have historically been ignored, working more closely in such countries with informal networks of NGOs centred on community interests.

“[The GCF] is a dedicated UN fund and not a bank,” she said, “so it needs to have the appetite to go where no one else is going.”

* This article was amended after publication to attribute the comments in paragraph 21 to a GCF spokesperson.

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But oil, gas and coal producers are still closing their ears. In 2023, they continued spewing near record-high amounts of methane into the atmosphere, according to the latest assessment by the International Energy Agency (IEA) released on Wednesday. That is despite a raft of promises to stop doing so.

Now, however, analysts believe the tide may finally be turning. The introduction of stronger regulations in key fossil fuel-producing and consuming countries, coupled with better monitoring and transparency of harmful leaks, gives them cause for optimism.

“While emissions are still very high, 2024 is going to be a watershed moment on action and transparency on methane,” said Christophe McGlade, head of the IEA’s energy supply unit.

Methane role in 1.5C goal

Methane is a major contributor to global warming. Although it remains in the atmosphere for a much shorter time than carbon dioxide, it is 84 times more potent over a 20-year time horizon.

The energy sector represents the second-largest source of methane emissions linked to human activity, after agriculture, and has the biggest potential for reduction, according to analysts.

“If we can’t make real progress in cutting down methane, it is going to be impossible to limit warming to 1.5C,” said McGlade, referring to the most ambitious warming goal in the Paris Agreement.

The IEA estimates that the fossil fuel industry needs to reduce methane emissions 75% by 2030 for the world to reach net-zero greenhouse gas emissions in 2050.

But last year methane emissions from fossil fuels remained near a record high first reached in 2019, rising slightly from 2022 to 120 million tonnes, according to the watchdog. The United States and China are by far the largest emitters of the powerful gas from oil and gas operations and the coal sector respectively.

Leaks from old or poorly maintained infrastructure and the practice of flaring – burning of excess gas – at oil and gas wells are the main energy-sector culprits for putting methane in the atmosphere.

Easy-fix

Reining in those emissions does not require rocket science. The IEA says well-known technologies and measures, such as upgraded equipment and more efficient practices, can cut the bulk of methane generated from fossil fuels in a fast and cheap way.

Just less than half of last year’s emissions could have been avoided at no net cost to the producers, with measures paying for themselves thanks to revenues from the additional gas captured. “It was a massive missed opportunity,” McGlade said.

Fossil fuel firms seek UN carbon market cash for old gas plants

If this is such a win-win, it begs the question of why fossil fuel producers are not stepping up to the plate. Lack of awareness over the scale of emissions and longer return on investment from plugging leaks are cited in the report as extenuating circumstances.

For Mark Brownstein, methane expert at the Environmental Defense Fund, up until very recently methane had simply been ignored by the global community as a serious threat.

“Aggressive action on methane is long overdue, but we are unfortunately still at a relatively early stage,” he told Climate Home. “Only now we’re starting to see some coordinated action from companies and countries to address this pollutant.”

Raft of pledges

More than 150 countries have signed up to a commitment first announced at the Cop26 climate summit in Glasgow to reduce global methane emissions by at least 30% from 2020 levels by the end of this decade.

Last year’s Cop28 in Dubai produced a host of new promises. The Global Stocktake assessment of national climate plans called for countries to substantially cut methane emissions. Meanwhile, more than 50 oil and gas companies pledged to speed up emission reduction efforts.

But for Romain Ioualalen from campaign group Oil Change International, the industry’s words only go so far. “The climate arsonists fuelling climate chaos cannot be trusted to put out the fire,” he said. “Government must take action to force the industry to clean up its mess on its way out the door.”

New regulations are now in the pipeline and provide experts with the biggest hope that things will finally move in the right direction.

Rules and satellites

In December 2023, the United States finalised new rules aimed at cracking down on U.S. oil and gas industry releases of methane. These include measures to eliminate routine flaring and force producers to better monitor leaks from equipment. Neighbouring Canada has also announced a new proposal for beefed-up methane-cutting standards.

Across the ocean, the European Union agreed at the end of last year on a new law that will require companies to report emissions, monitor and fix leaks, and limit flaring. Crucially, the rules will also apply to imports of oil, gas and coal into the bloc, effectively forcing overseas producers to improve their standards.

Despite Putin promises, Russia’s emissions keep rising

Alongside policy developments, the ability to track methane emissions is continuously improving – mainly thanks to satellite technologies – leaving polluters with less room to hide.

Advances on this front are expected to continue in 2024. MethaneSAT, a new satellite developed by EDF, was launched into space in early March and will soon provide free, near-real-time access to methane emissions data from wide areas that have so far been overlooked.

“This data will not only assist in the implementation of regulatory requirements, but it will also underpin the commitments made by fossil fuel companies at Cop28,” said Brownstein. “All of this is finally pointing us in the right direction.”

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It is the first such decision the Green Climate Fund (GCF) has taken since its creation in 2010.

The GCF said on Thursday it had terminated its agreement with project developers after their failure to comply with its rules on environmental and social safeguards resulted in “legal breaches”.

In 2020, the fund committed $64 million to the programme run by the Nicaraguan government and the Central American Bank for Economic Integration (CABEI), which aimed to reduce deforestation in the UNESCO-designated Bosawás and Rio San Juan biosphere reserves.

The GCF said it had not paid out any funds before terminating its support for the project and no activities had yet taken place.

Community groups warned that the project was going to be carried out in reserves being deforested by a massive invasion of settlers that use violence against Indigenous people with impunity due to weak law enforcement action. They worried that the programme – which was to be overseen by state authorities – would worsen those conflicts and fail to protect the rights of Indigenous communities.

Amaru Ruiz, director of the Nicaraguan organisation Fundación del Río, which supported the affected communities, welcomed the decision by the GCF.

“This sets a precedent globally for the functioning of the fund,” he said. “It is also a recognition of the struggle and resistance of the Indigenous people and Afro-descendant communities of Nicaragua, and it shows that there is a window of opportunity to insist on the fact that climate projects must not violate human rights.”

Fuelling conflicts

The decision concludes a grievance process that has lasted nearly three years since a coalition of local and international NGOs filed a complaint with the GCF. They accused the project of fuelling a violent conflict between Indigenous communities and settlers who were grabbing land to farm cattle and exploit resources, as well as failing to consult local people.

The Bosawas Reserve in Nicaragua has been hit by illegal mining and logging despite protected status. Photo: Rebecca Ore

Independent legal observers have documented repeated attacks against Indigenous people in the area with dozens murdered, kidnapped or raped over the last few years.

An investigation by the GCF’s independent complaint mechanism deemed their concerns justified. It found a series of failures with the project that could “cause or exacerbate” violent conflict. The probe also highlighted a lack of due diligence on conflict risks and human rights violations and the absence of free and informed consultations with Indigenous communities before the project’s approval.

The GCF said it was unaware that the project was not in compliance with its policies at the time of its approval and that new evidence had subsequently been brought to light.

Late-stage consultation

Following the internal investigation, the GCF board agreed last July to suspend the project until it addressed local concerns and fully respected the fund’s policies and procedures. It effectively gave the project developers one last chance to fix the problems.

In an attempt to remedy the issues, CABEI carried out a consultation and engagement process with local communities between August and September. The project developer said a total of 5,550 people participated in 69 events across the region.

Fossil fuel firms seek UN carbon market cash for old gas plants

But NGOs criticised it as a “sham”, saying participants were only provided with a brochure in Spanish – a foreign language for many Indigenous people – and were given limited freedom to debate the proposal.

“There’s been an increase in militarisation in the territory,” said Ruiz. “At least eight Indigenous community forest guards were detained after they had denounced the situation of encroachment on their territory”.

China steps away from 2025 energy efficiency goal

Since 2007, Nicaragua has been ruled by an authoritarian regime led by President Daniel Ortega. His administration has been responsible for “widespread and systematic human rights violations that amount to crimes against humanity”, according to the United Nations Group of Human Rights Experts on Nicaragua.

CABEI detailed in a report sent to the GCF in October the steps that had been taken to make the project compliant with its rules. But the fund’s secretariat, its administrative arm, found the issues were not addressed to its satisfaction and decided to terminate its participation in the programme.

It communicated the decision to its board members at a meeting in Kigali, Rwanda, this week.

Lesson for the future

The GCF secretariat says it is now committed to working collaboratively with CABEI and the Nicaraguan government to “develop a clear strategy to conclude the project in an orderly and responsible manner”. That will include informing people on the ground and “managing the expectations” of the potential beneficiaries.

CABEI did not immediately respond to a request for comment.

Florencia Ortúzar, a lawyer at the Interamerican Association for Environmental Defense (AIDA), said she hoped the GCF would learn a lesson from this case.

“It is a reminder of the importance of including local communities from the very beginning of project design,” she told Climate Home. “The GCF policies and safeguards exist to prevent those regrettable situations and must be implemented rigorously and consistently.”

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Beijing is aiming to reduce its energy intensity –  the amount of energy consumed per unit of its gross domestic product – by 2.5% in 2024, according to a government policy work plan published on Tuesday at the opening of the annual National People’s Congress.

The target falls short of the rate of reduction needed to hit a goal of slashing energy intensity by 13.5% in the five years to 2025, energy analysts noted.

China is already lagging way behind that goal. Energy intensity fell by only 2% between 2020 and 2023 as the country powered its economic growth with carbon-intensive sources like coal, recent analysis by the Helsinki-based Centre for Research on Energy and Clean Air (CREA) found.

‘Admitting defeat’

“China is effectively admitting its failure to fulfill the five-year target,” Li Shuo, director of the China Climate Hub at the Asia Society think-tank, told Climate Home. “This year’s target is even more modest than the average rate of reduction needed, while they should be playing catch up.”

Lauri Myllyvirta, a senior fellow at the Asia Society and co-founder of CREA, said that China is “basically admitting defeat” with this “very important metric”.

“The [2.5%] target is completely inadequate to get China back on track towards its 2025 goals,” he added. “It is very alarming that the government is not articulating a plan on how they are going to hit an internationally-pledged target.”

How to hold shipping financially accountable for its climate impacts

The energy intensity goal is one of the main climate commitments made by the Chinese government in its current five-year plan and is also referenced in the country’s nationally determined contribution (NDC), submitted to the UN under the Paris Agreement.

China set the target in 2021, but a year later it watered down the rules when it stopped counting energy consumption from renewable sources. “It’s essentially a fossil-fuel intensity target now,” said Myllyvirta.

A similar goal of reducing China’s carbon intensity – CO2 emissions per unit of economic output – by 18% is also at serious risk of being missed unless emissions fall dramatically over the next two years.

Emission cuts vs growth

China is the world’s biggest carbon emitter and juggles its emissions-cutting targets with Beijing’s desire to boost economic growth and maintain energy security.

The Asia Society’s Li said this year’s government work plan “does not really prioritise climate and environmental issues in light of the difficult domestic economic conditions”.

Germany uses funding to pressure climate groups on Israel-Gaza war

It does, however, indicate strong support for clean energy, saying the government will “further advance the energy revolution” and “strengthen the construction of large-scale wind power and photovoltaic bases”.

But it also says the government will continue to recognise the role of coal power in its energy system and “increase the exploration and development of oil and gas”, suggesting China is not yet planning to start transitioning away from fossil fuels, as countries agreed to do at Cop28 in December. 

Renewables and coal leader

The country is already both a global leader in renewable energy and a primary backer of coal power.

In 2023 it doubled its solar capacity after installing as many solar panels as the whole world had done in the previous year, according to the International Energy Agency. Wind power capacity also rose by 66% last year.

But it also has more than half of the coal-fired generating capacity operating globally. That is likely to increase as China has more coal power capacity under construction than the rest of the world combined, according to an analysis by the Global Energy Monitor.

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With fewer than nine months to go until the UN climate summit in Baku, negotiators are currently staring at a long list of options and no agreed details for the goal that is due to kick in from 2025.

They still need to work out everything from how large the overall sum should be, to what it needs to pay for, over how many years, and the best way to monitor the money.

But nations are at odds over what upcoming negotiations should prioritise.

Most developing countries want to talk about numbers and commit rich nations to stump up the highest amount of cash possible with the fewest strings attached. Meanwhile, developed countries argue it shouldn’t be just them paying and want the focus to be first on broadening the list of contributors.

Moving past contentious $100bn target

Experts say acrimony over the existing $100-billion annual target – which the new goal is set to replace – makes finding common ground more difficult.

Developed countries failed to provide that promised yearly sum to developing nations by the initial 2020 deadline and, again, in 2021. They now “look likely” to have met the goal in 2022, according to an assessment by the Organisation for Economic Co-operation and Development (OECD) based on preliminary data that is not publicly available.

Comment: Loss and damage must be a focus of IPCC’s next reports

The new collective quantified goal (NCQG) is due to be agreed at this year’s climate summit. The decision will be especially important for vulnerable countries that want to know how much money they are likely to receive as they draft their new climate plans due in 2025.

Two things are certain: It needs to be more than $100 billion a year and take into account the priorities of developing countries. Everything else is still to play for.

After several meetings in the last two years, negotiators produced dozens of options across the main issues at stake. They now need to narrow those down to hand politicians a draft text with the most contentious issues to be fought over in Baku in November.

New submissions made by countries this month give an insight into how they think those discussions should play out.

How big should the goal be?

Determining the exact size of the new goal is one of the thorniest elements to untangle.

The final figure will vary depending on the answers to a series of interconnected, and still unresolved, questions: What is the timeframe? Does it need to fund only emissions-cutting and adaptation measures, or loss and damage too? Will it include private finance?

“The $100 billion was just a political number, while the new goal needs to rely on science and an assessment of actual needs,” said Natalia Alayza, a climate finance expert at WRI, a US-based think-tank.

Switzerland proposes first UN expert group on solar geoengineering

The sources used to work that out will play a crucial role. One much-referenced document in negotiations so far is the needs determination report written by the UNFCCC’s standing committee on finance. Published in 2021, it tallied the money required by developing countries to fund actions listed in their climate plans. The report concluded a total of $5.8-5.9 trillion will be needed up to 2030.

India and the Arab group of countries, led by Saudi Arabia, argue this means rich nations have to provide at least $1 trillion a year under the new goal.

Experts say the chances of that are close to zero. “Developed countries would never be able to convince their parliaments to spend those sums,” said Michai Robertson, a research fellow at London-based think-tank ODI and adviser to the group of small island nations. “What’s likely to happen is that, once an overall technical figure is established, there will be a highly political discussion on a fractional amount to be used for the goal.”

Who should pay?

Developing countries lament that their wealthy counterparts have so far shied away from any talk of numbers in the negotiations. The latest submissions from the US, EU, UK, Japan and Australia do not mention figures or possible sources to determine them.

Alpha Kaloga, the lead negotiator for the African group, told Climate Home donor governments should stop coming to the table with “empty pockets”.

“If they are negotiating in good faith, they should say ‘this is the amount that we commit now, the signal we want to give’,” he added. “They should come with ambitious numbers and then push for other countries that are in a position to do so to pitch in.”

Negotiations over the new climate finance goal at Cop28. Photo: IISD/ENB | Mike Muzurakis

But developed countries are pressing for discussions to move in the opposite direction. Before agreeing to any dollar amounts, they want to settle the question of who is going to fill the money box. Spoiler: They think it shouldn’t be just them.

In its submission, the EU says the new goal should take into account “the evolving capacities of countries to contribute to the provision and mobilization of climate finance”. The US laments that options to determine the contributor base “have not been sufficiently discussed or identified” in technical meetings to date.

Japan is more explicit: “Emerging countries with a capacity to do so” should be added to the list of contributors, its submission says. “Now is the time to move away from the binary opposition between developed and developing countries,” it adds.

Legal arguments over contributors

Last year, similar rhetoric animated discussions over who should pay into the nascent loss and damage fund. Rich countries argued that high-emitting nations like China, South Korea, Russia and the Gulf petrostates should contribute. In the end, developing nations were only “encouraged” to do so “on a voluntary basis”. The United Arab Emirates, host of Cop28, pledged $100 million to the new fund.

Most developing countries still strongly oppose any changes to the contributor base. They argue that the 2015 Paris Agreement puts the responsibility of fulfilling the climate finance goal squarely on the shoulders of rich governments.

“It is clear that they are attempting to shift the burden,” said Kaloga.

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But developed countries point the finger at another section of the landmark Paris text. Article 2.1 calls for “making financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”. They claim this provides cover for their argument that everyone should pay for climate action.

ODI’s Robertson doesn’t see any realistic legal avenue to compel additional countries to stump up the cash for the goal. “Either nations self-declare that they now consider themselves ‘developed’ or all 195 parties agree to amend the Paris Agreement and redefine, top-down, who is and isn’t a developed country,” he said. “Both options seem impossible.”

Tracking delivery of pledges

Heated negotiations are also expected over the transparency arrangements to monitor if and how the money is delivered.

The earlier $100-billion pledge came with no official rules on what activities could be counted. As Reuters discovered, Italy provided money to a retailer opening gelato stores across Asia and Japan financed a new coal plant in Bangladesh. Both projects were included in the countries’ contributions towards the $100-billion goal.

The fundamental issue is that there is no internationally agreed understanding of what climate finance means.

Most developing countries are pushing for a common definition to be included in the new goal to be set at Cop29, alongside strict rules that prevent any accounting tricks.

“Transparency is one of the biggest lessons to learn from the $100-billion goal. Not only we don’t know if it’s been met, but how it’s been met,” said WRI’s Alayza. “We need to ensure that data is comparable, accurate and consistent – and accurately reflects what has been provided.”

The post Countries draw battle lines for talks on new climate finance goal appeared first on Climate Home News.

It is proposing to create the first United Nations expert group to “examine risks and opportunities” of solar radiation management (SRM), a suite of largely untested technologies aimed at dimming the sun.

The panel would be made up of experts appointed by member states of the UN’s environment programme (Unep) and representatives of international scientific bodies, according to a draft resolution submitted by Switzerland and seen by Climate Home.

Governments will negotiate and vote on the proposal at Unep’s meeting due to start at the end of February in Nairobi, Kenya. It has been formally endorsed by Senegal, Georgia, Monaco and Guinea.

A Swiss government spokesperson told Climate Home that SRM is “a new topic on the political agenda” and Switzerland is “committed to ensuring that states are informed about these technologies, in particular about possible risks and cross-border effects”.

Split scientific opinions

Solar geoengineering is a deeply contested topic and scientists are divided over whether it should be explored at all as a potential solution.

Ines Camilloni, a climatology professor at the University of Buenos Aires, welcomed Switzerland’s proposal, saying the UN “is in a good position to facilitate equitable, transparent, and inclusive discussions”.

“There is an urgent need to continue researching the benefits and risks of SRM to guide decisions around research activities and deployment”, she told Climate Home.

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But Carl-Friedrich Schleussner, head of climate science at Climate Analytics, says he is concerned about that prospect.

“The risk of such an initiative is that it elevates SRM as a real solution and contributes to the normalisation of something that is still very premature and hypothetical from a scientific perspective”, he added. “You need to be careful about unintended consequences and consider the risks of opening a Pandora’s box”.

An open letter signed by more than 400 scientists in 2022 called for an international “non-use agreement” on solar geoengineering. It also said United Nations bodies, including Unep, “are all incapable of guaranteeing equitable and effective multilateral control over the deployment of solar geoengineering technologies at planetary scale”.

Poorly understood risks

Long touted as a futuristic climate hack, solar geoengineering has risen in prominence in recent years as the prospect  of curbing emissions enough to limit global warming to 1.5C has faded.

The technologies aim to reduce the amount of sunlight reaching the planet’s surface. This could be achieved by pumping aerosols into the high atmosphere or by whitening clouds.

Its supporters say it could be a relatively cheap and fast way to counter extreme heat. But it would only temporarily reduce the impact of rising emissions, without tackling the root causes.

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The regional effects of manipulating the weather are hard to predict and large uncertainties over wider climate, social and economic implications remain.

Solar geoengineering could “introduce a widespread range of new risks to people and ecosystems, which are not well-understood”, the IPCC’s scientists said in their latest assessment of climate science.

Its critics argue that putting the SRM option on the table undermines existing climate policies and relieves pressure on polluters to reduce emissions as quickly as possible. There are also questions about how long this technology would be needed and what happens after it is stopped.

Space for discussion

In its proposal to the Unep assembly, Switzerland acknowledges the “potential global risks and adverse impacts”.

The 25-people-strong group would first be tasked with writing a comprehensive scientific report on solar geoengineering.

But the main goal would be to establish “a space for an informed discussion” about research on the potential use of SRM, giving the possibility for future decisions on how that should be governed, according to an accompanying technical note seen by Climate Home.

It is not the first time Switzerland brings a resolution on solar geoengineering to the Unep summit. In 2019, its attempt to get countries to agree to the development of a governance framework failed as a result of opposition from Donald Trump’s USA and Saudi Arabia – who didn’t want restrictions on geoengineering.

Calls for more research

Last year, Unep produced an “independent expert review” of the subject, concluding that “far more research” is needed “before any consideration for potential deployment” of SRM.

A Unep spokesperson said the exact characteristics of the group proposed by Switzerland would need to be negotiated at the upcoming summit. But, if approved, it would differ from any previous panel “because it would have a clear mandate from member states” with experts directly appointed by them.

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Ines Camilloni was one of the authors of last year’s UNEP report. She says “managing the risks of climate change requires a portfolio of policy responses”, of which mitigation and adaptation would be the most important and urgent.

But she added that “SRM has been proposed as a complementary approach” and more research is needed to weigh its benefits and risks against the impact of adverse climate scenarios.

A panel of leaders called the Overshoot Commission also recommended last year that governments expand research into solar geoengineering while placing a moratorium on large-scale experiments outdoors. 

A rogue SRM experiment conducted by a US startup in Mexico led the Mexican government to announce a ban on solar geoengineering in January 2023.

‘Precautionary approach’

Mary Church, a campaigner at the CEnter for International Environmental Law, says “it’s hard to see what could be gained from establishing an expert group under Unep”.

“There’s a real risk that such a group could undermine the existing regulatory framework and inadvertently provide legitimacy for solar geoengineering technology development and experimentation”.

Countries should instead “take a precautionary approach, commit to non-use, and prioritise a fast, fair and funded phase out of fossil fuels”, she added.

The post Switzerland proposes first UN expert group on solar geoengineering appeared first on Climate Home News.

The US Export-Import Bank (Ex-Im) – a federal export credit agency – is pushing ahead with plans to back the drilling of more than 450 new oil and gas wells in one of the oldest extraction fields across the Middle East.

Ex-Im’s board voted on Thursday to notify US Congress about the potential investment, a required step for projects over $100 million. Observers told Climate Home the Bahrain financing is nearly certain to be secured as early as next month.

At Cop26, the US joined 33 other countries in pledging to end direct public finance for overseas fossil fuel projects by the end of 2022. While most other signatories respected the commitment, the US approved over $2 billion in international fossil-fuel finance last year, according to an analysis by Oil Change International. Exim has been responsible for just under half of it.

“The United States is stalling momentum to end international public finance for fossil fuels globally”, said Nina Pušić, export finance climate strategist at Oil Change International. While the country can help “lead a shift of billions of dollars” from fossil fuels to renewables, approvals like this one “are a huge step backward”, she added.

Oil and gas expansion

Ex-Im’s financing in Bahrain would go towards a $4.2 billion programme to boost production in a nine-decades-old field where new reserves were discovered in 2018.

State-owned company Tatweep Petroleum plans to drill up to 34 new gas wells and more than 420 new oil wells, in addition to the construction of processing facilities and transport networks.

The programme is expected to free up reserves containing 5.2 trillion cubic feet of gas – nearly six times the amount of gas the Kingdom currently produces every year, according to company filings. Oil production should see a more modest uplift.

No new oil and gas extraction project should go ahead if the world wants to keep global warming below 1.5C, according to the International Energy Agency (IEA).

Pumping oil and gas from the expanded Bahraini field is expected to spew over 1.4 million tonnes of CO2 a year in the atmosphere by 2026 – nearly double the emissions recorded there in 2022, according to an environmental assessment submitted by Tatweep.

That does not include emissions generated from end consumers burning the fuels (known as Scope 3), which generally account for up to 90% of the carbon footprint of fossil fuel companies.

Running tensions

Ex-Im’s continued support for fossil fuels overseas has been a source of ongoing tensions.

Two members of an advisory group set up by the Biden administration to bolster Ex-Im climate considerations resigned last week following discussions over the Bahrain project.

Last year former special envoy John Kerry reportedly phoned Ex-Im’s chair Reta Jo-Lewis urging her to delay a decision to fund a nearly $100 million oil refinery expansion in Indonesia, according to Politico. But the agency went ahead with the vote and greenlit the project.

As the US official export credit agency, Ex-Im is influential in directing investment towards specific sectors by offering exporters government-backed loans, guarantees or insurance. The agency acts independently, but its board members are appointed by the US president and confirmed by the Senate. Joe Biden picked the sitting chair Jo-Lewis.

No clear guidelines

When president Biden took office in January 2021, he issued an executive order calling on federal agencies, including Ex-Im, “to identify steps through which the United States can promote ending international financing of carbon-intensive fossil fuel-based energy”. Months later, the US government signed up for the UN pact in Glasgow.

However, the Biden administration stopped short of directly forcing Ex-Im to adopt a fossil fuel exclusion policy.

“A key issue is the lack of clear guidelines from the US government to Ex-Im and other US agencies to explicitly prohibit new public fossil fuel support”, said Sherri Ombuya, a researcher at Perspectives who wrote a report about Ex-Im policies.

In 2023, Ex-Im approved just under $1 billion worth of funding for projects including an oil refinery in Indonesia and a credit facility to help commodity trader Trafigura sell more US liquefied natural gas (LNG). Oil and gas investments account for nearly a quarter of the agency’s portfolio.

Ex-Im’s arguments

Ex-Im has repeatedly justified its fossil fuel financing by pointing to a “non-discrimination” clause in its charter. The provision prevents the agency from rejecting funding applications just because they concern specific industries, such as oil and gas.

But Ombuya said that “is not a fully valid argument”. She added that Ex-Im’s board could turn down applications “if they don’t align with the US climate commitments which would effectively lead to the rejection of oil and gas projects”.

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Campaigners also argue that the agency could expand the use of existing tools to screen projects against certain thresholds of greenhouse gas emissions without singling out specific sectors. Ex-Im already applies criteria to projects with “high carbon intensity”, effectively ruling out any funding for coal power plants.

Friends of the Earth filed last December a legal complaint against Ex-Im at the Organisation for Economic Co-operation and Development (OECD) arguing that the agency is breaching a requirement to draw up emission reduction plans and avoid causing environmental damage.

Win for American fossil fuel firms

Ex-Im says its mission is to support American jobs. It does so by helping US companies secure lucrative foreign contracts with its backing.

Last year Jo-Lewis met government officials and corporate executives in Bahrain to “expand ExIm’s footprint in the region and facilitate new opportunities for U.S. exporters in Bahrain.”

The Bahrain project will see the involvement of SLB (formerly known as Schlumberger), the world’s largest oilfield services provider.

The Houston-based company specializes in finding oil and gas deposits, drilling wells, and managing reservoirs to boost production. SLB was involved in the discovery of the new oil and gas reserves in central Bahrain and in March 2021 it won a $225 million contract for their development.

Ex-Im has been approached for comment.

The post US trade agency backs oil and gas drilling in Bahrain despite Biden pledge appeared first on Climate Home News.

Last month, Shell used rice farming carbon credits to offset a chunk of its annual emissions, claiming to reduce the “carbon intensity” of its fossil fuel products.

But experts have long argued that the sellers of these offsets are over-counting their emissions reductions and using accounting tricks to evade checks, as a Climate Home investigation showed last year.

These accusations led leading carbon standard Verra to suspend the projects early last year and launch an investigation. Shell took them off its website as a result.

But, although Verra’s review continues, on January 9 Shell quietly retired over a million credits produced by the suspended projects, meaning it counts the claimed emissions reductions towards its climate targets.

Rachel Rose Jackson, director of climate policy at Corporate Accountability, said Shell’s actions were “shameful, dubious and reckless against the backdrop of a deadly climate emergency”.

“To retire over one million offsets from projects actively under investigation reeks of bad faith and malintent”, she added.

Carbon Market Watch’s Jonathan Crook said Shell should have at least waited until Verra’s review had ended to see if there were problems with the offsets.

If the offsets do have problems then, he added, they “have no value from a climate perspective and using them towards net carbon intensity targets is totally inappropriate”.

Shell did not reply to detailed questions on these particular offsets. But a spokesperson said that the credits the company buys are “certified in accordance with independent standards and further screened through our due diligence process”.

Claiming to lower rice emissions

The idea behind the projects is that emitters like Shell pay for Chinese rice farmers to take measures to reduce their emissions that they wouldn’t otherwise be able to afford.

Rice is traditionally grown in flooded fields known as paddies. These have more bacteria than dry fields and the bacteria breaks down decaying plants, turning them into a potent greenhouse gas called methane.

To reduce the damage to the climate and save water, the project developers claimed they would pay farmers to periodically drain their fields. With less standing water, there are fewer bacteria and less methane.

A rice field irrigated with alternate wetting and drying methods

But opinions from experts and scientific literature suggest that lots of farmers already employ this technique across China, encouraged by the central government. So they do not need incentives from carbon credit to do so.

Carbon credit rating agency BeZero Carbon has given a Chinese rice cultivation project similar to Shell’s its lowest possible score. 

Its assessment says there is a “significant risk” that the emissions reduction measures are not additional to what would happen without the carbon credit money “due to the high level of government support for the project activities”.

A Climate Home investigation last year found that the project developers artificially divided up fields across several projects to pass them off as small-scale and avoid stricter checks.

Quality issues

These activities were initially given the green light by leading carbon standard Verra. But early last year, in response to concerns, it identified “quality issues”, launched a review and stopped the projects from producing any more credits.

But the suspension did not prevent offsets already in circulation from being sold or used to offset emissions.

When Climate Home approached Shell last year, the company said it was aware of Verra’s review and “would look carefully at the results when they are published”. 

The company took the offsets off a webpage dedicated to its portfolio of carbon credits offered to external clients, with a spokesperson saying this was “pending Verra’s review”.

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Nearly a year later, the results of the review have still not been published and the projects remain on hold. But Shell retired 1.23 million carbon credits issued by those projects, offsetting emissions equivalent to three gas-fired power plants running for a year.

A Shell spokesperson said the company had “recently retired a number of carbon credits as part of our net carbon intensity target”.

Finding a way out

Shell’s involvement in these projects is not just as a buyer. The schemes were originally set up by a Chinese firm but four years later Shell signed a series of agreements to become its exclusive agent.

The role granted Shell the right to either claim the credits against its emissions or sell them to other companies, potentially profiting from their sale.

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Before Verra suspended the projects, only a quarter of the credits issued by the projects had been used, primarily by Chinese state-owned oil company PetroChina. 

Shell retired the vast majority of the remaining credits on January 9. Carbon Market Watch’s Crook says it would appear Shell “had sunk money into the projects and had these credits sitting on their books”.

“Perhaps they have not been able to find any buyers since the projects were put on hold”, he added. “Or perhaps they are doubting that the review will be positive and it will be difficult to sell or trade any of these credits in the future. So they went ahead and used them themselves”.

Shell involved in rule-making

While Verra probes the credits, it has taken the rare step of banning any further use of the rice farming methodology under which the projects were developed.

The register is now working on a new rulebook for future rice farming offsets. It says it will allow project developers “to credibly achieve emission reductions and generate high-quality credits”.

To advise them on this, Verra has appointed an Indian company which is part of Shell, raising concerns about conflict of interests.

Crook described this as a “recurring issue” in the carbon credit world. He said: “You have actors who wear all these different hats. They can sometimes develop methodologies, transact carbon credits and/or use them towards their own targets, potentially based on rules they helped develop. It raises real questions around conflicts of interest and integrity.”

A Shell petrol station. Photo credit: Tomcat MTL/Flickr

A Verra spokesperson told Climate Home it “takes potential and actual conflicts of interest very seriously” and that methodologies “undergo an extensive review process before they are finalised” and at each stage “all stakeholders, including the public, have an opportunity to evaluate and comment”. 

They said: “This process is designed to promptly identify any issues with the methodology, including the opportunity to identify any perceived conflicts of interest”.

Investigation ongoing

The spokesperson said Verra does not comment on specific projects under review to avoid influencing the outcome of the investigation.

“The steps in a review, as well as the timeline for completing the review, depend on the underlying facts and circumstances, the complexity of the issues, the cooperation of third parties and other factors”, they said.

“A review may take several weeks or months to complete,” they added, “while every review is different, Verra aims to conduct an appropriately scoped review as expeditiously as possible.”

A spokesperson for Shell said: “We retire credits to compensate emissions, including those associated with the energy our customers use in transport, homes, producing goods and providing services. This approach complements our activities to avoid and reduce emissions from our own operations”.

The post “Shameful”: Shell uses carbon credits under investigation to meet climate targets appeared first on Climate Home News.

He replaces John Kerry who stepped down last month to campaign for Biden’s presidential bid.

The appointment received a mostly positive reaction from climate diplomats and campaigners, with praise for Podesta’s experience, contacts and knowledge. But some concerns were raised about him combining this new role with his domestically-focussed climate job.

Whereas Kerry was a climate envoy, Podesta will only be an adviser to the President. Unlike envoys, advisers do not have to be approved by the US Senate.

Podesta will oversee the US’s diplomacy up to and at Cop29 in Azerbaijan, which will start six days after the US election. His key task will be to negotiate a new long-term climate finance goal with developing countries.

Old hand

Seventy-five-year-old Podesta has been a high-profile figure in Washington DC for decades. He was president Bill Clinton’s chief of staff from 1998 to 2001 and acted as Barack Obama’s climate advisor in 2014-15, while the Paris Agreement was being negotiated.

In 2016, Podesta led Hillary Clinton’s unsuccessful presidential bid against Donald Trump. During the campaign, thousands of personal emails allegedly from Podesta were posted online after his account had been hacked.

Rich nations miss loss and damage fund deadline

In September 2022, Biden appointed him to oversee the rollout of the $369 billion green spending bill – the Inflation Reduction Act (IRA).

Podesta has been a strong defender of the IRA as it faced accusations of protectionism from Europe, the Far East and across the developing world. He told the Financial Times last year that the US makes “no apologies” for prioritising American jobs in its push for clean energy.

Steady pair of hands

Most big US green campaign groups like the National Resources Defence Council and Center for Climate and Energy Solutions welcomed his appointment.

E3G analyst Alden Meyer told Climate Home Podesta was “the ideal pick for this job” as “he has the experience, relationships and deep understanding of climate policy and politics needed to do an outstanding job”. “Most importantly”, he added, “he has the full confidence of president Biden”.

Abroad, Podesta’s announcement was broadly welcomed too although campaigners criticised the US’s climate record.

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As Brazil’s then environment minister, Izabella Teixeira worked with Podesta on the Paris Agreement. She told Climate Home he was a “good choice” and “a man that understands very well the power of the dialogue” and “a good player of the multilateral system”.

Peruvian diplomat Manuel Pulgar-Vidal worked with Podesta as president of Cop20 in Lima. Now with WWF, he told Climate Home he “warmly welcome[d]” the appointment”.

“His role in securing the Paris Agreement, and recently in implementing the IRA, is testament to his skill and dedication,” Pulgar-Vidal said.

Li Shuo, from the Asia Society, described him as a “steady pair of hands” who “has extensive experience working with China during the Obama years and knows his Chinese counterparts well”.

“I hope his appointment will ensure consistency as the US and China follow the engagement path outlined by the Sunnylands agreement reached last year”, Li added.

Skepticism

But Harjeet Singh, from the Fossil Fuel Non-Proliferation Treaty Initiative, said the appointment “casts a shadow of doubt over the US’s commitment to global climate leadership”.

He said that Podesta was likely to focus on domestic action and “tread even more cautiously on the international stage than Kerry did”, suggesting that “international negotiations will become a secondary priority”.

“It reflects a continuous disregard for the US’s historical duty to provide developing nations with financial and technological support,” he said, adding “the international community grows increasingly skeptical of the US’s readiness to fulfill its global responsibilities.”

For Cop29 to succeed, rich nations must get their parliaments to agree more finance now

Mohammed Adow, director of Power Shift Africa, told Climate Home he hoped Podesta could bring the “urgency and purpose” of the IRA to his international climate diplomacy.

But, he added, the US “remains the world’s ultimate petro-state” as it is the biggest producer of oil and gas and has the largest historic emissions.

“Pairing this with the US offering a paltry amount in climate finance at the recent Cop28 talks and it’s clear that Podesta has a big job on his hands to get the US to be part of the solution to the climate crisis, rather than being part of the problem”, he said.

The post John Podesta replaces Kerry as top US climate diplomat appeared first on Climate Home News.

At a summit in Rome with two dozen African and European leaders on Monday, Italian prime minister Giorgia Meloni unveiled a long-awaited initiative aimed at boosting economic ties and curbing migration.

The transformation of Italy into “an energy hub” that creates “a bridge between Europe and Africa” is a central plank of the ‘Mattei Plan’ – named after Enrico Mattei, founder of state oil and gas company Eni.

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Meloni said initial resources for the scheme would total 5.5 billion euros ($5.95 billion), including loans, guarantees and grants. Over half of the budget would come from a climate fund set up in 2022 to finance international projects in line with the Paris Agreement, she added.

Widespread concerns

Campaigners in Italy and across Africa have expressed concerns over the initiative.

Silvia Francescon, from Italian think tank Ecco, told Climate Home that the plan presents “enormous ambiguities” that leave the door open to fossil fuel investment.

A document released by the Italian government indicated the initiative would strengthen the use of renewables and  “accelerate the transition of electricity systems”, but did not explicitly rule out oil and gas projects.

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“There is no reference to the Paris Agreement or the Cop decisions. Based on what we currently know, there is undoubtedly a risk that funds meant for climate and international development could be used for projects managed by companies like Eni”, she added. “The ambiguity is very worrying”.

Eni’s long shadow

Eni has extensive oil and gas operations across a dozen African countries, including Nigeria, Mozambique, Ivory Coast and the Republic of Congo.

Its CEO Claudio Descalzi attended the launch of the Mattei Plan in the Italian Senate alongside executives of other state-controlled companies.

At a political event organised by Meloni’s right-wing populist party last December, he said Italy was “ready to invest in Africa both to get the energy needed for economic growth but also to tackle migration flows”.

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Concerns over Eni’s looming presence over the initiative have been widespread ever since Meloni named the plan after the company’s founder.

Enrico Mattei led the company’s quest in the mid-20th century to capture a significant share of the fast-expanding market.

His willingness to give oil-producing states a larger share of the profits than its American and British rivals is widely credited as a key reason behind Eni’s success at the time. Mattei died in 1962 in a plane crash caused by a suspected sabotage.

Mutual benefits

Meloni hailed Mattei as an inspiration for her plan that, she said, would be “a cooperation among equals” and “non-predatory”.

But African Union Commission Chairman Moussa Faki Mahamat told the summit that African countries would have liked to have been consulted beforehand.

“We need to pass from words to deeds,” he said, striking a cautious note. “You can understand that we cannot be happy with promises that often are not maintained.”

The Italian government has put energy at the centre of the partnership but details of which energy sources will be included have been very limited.

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Italy signed several gas deals with African countries over the last two years as it sought to replace Russian supplies. But gas was the “elephant in the room” at the summit, as Kenyan president William Ruto described it in his address.

Ruto said he believed “that no African country can be asked to halt the exploration of its natural resources, including fossil fuels”. But “that does not mean that it makes economic sense to build a dependency on fossil fuels in our economies”, he added, calling gas “a temporary solution, primarily for export”.

‘False solutions’

Among a limited number of “pilot projects” referenced in Meloni’s speech is a biofuel production operation launched by Eni in Kenya in 2021.

Supporters of biofuels see them as an important contributor to the energy transition away from fossil fuels. But critics argue they can do more harm than good by diverting land away from food production, destroying forests, worsening water scarcity and unleashing significant amounts of emissions across their supply chains.

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Dean Bhebhe, campaigns lead at Power Shift Africa, called Meloni’s focus “very problematic”. “Africa has an enormous amount of solar and wind – genuine renewable energy sources – and instead she chooses a false solution like biofuels”, he told Climate Home.

Concerns have also been raised over the lack of engagement with civil society representatives that were not invited to the summit. Ahead of the event, over 50 African groups wrote a letter to the Italian government asking for an “end of neo-colonial approaches” and “a more consultative approach”.

“Currently the Mattei plan does not offer Africa a path to escape the systematic traps that prevent its development”, said Bhebhe. “We need plans that rebalance Africa’s position globally in truly innovative ways, not convenings that keep it at the bottom of the food chain”.

The post Italy launches ‘ambiguous’ Africa plan fuelling fears over fossil fuels role appeared first on Climate Home News.

Announcing the move on Friday morning, President Joe Biden said the pause on all pending export permits for liquified natural gas (LNG) “sees the climate crisis for what it is: the existential threat of our time”.

The decision comes after Biden faced mounting pressure from environmentalists and climate activists to apply the brakes on the US build-up of fossil fuel capacity. The groups represent an important voter base for Biden as he seeks reelection in November.

The US is the world’s largest exporter of LNG and shipments are expected to keep soaring as a result of projects already approved and under construction.

But the review will put on hold the planned development of at least four more gas export terminals on the coast of the Gulf of Mexico.

That includes the Calcasieu Pass 2 (or CP2), a facility in Louisiana described by campaigners as a “carbon bomb”. If built, it could ship up to 24 million tonnes of gas every year.

New climate tests

Biden said his administration “will take a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment”.

A White House statement said the pause would allow the White House to integrate “critical considerations” that have emerged since the last analysis of gas export approvals was carried out five years ago.

That includes the impact of greenhouse gas emissions. Gas supporters have historically promoted it as a “cleaner” fossil fuel because of its reduced carbon dioxide emissions compared to coal.

But LNG is primarily made of methane, a much more potent earth-warming gas. While burning it turns it into carbon dioxide, methane leaks during transport can push its lifetime emissions higher than those of coal, according to a new study by methane expert Robert Howarth currently undergoing peer review.

Liquified natural gas (LNG) facilities in Texas. Photo: Tim Aubry / Greenpeace

Max Gruenig, senior policy advisor at E3G, said Biden’s decision is a “significant shift” because the Department of Energy, which is responsible for assessing the projects, has historically only taken economic benefits into account.

“They will have to come up with a new methodology to assess what is beneficial to the public that includes externalities like climate change”, he added. “But the problem is, of course, as soon as you publish the details of the methodology, you risk being litigated against and attacked in court. The pause allows the Biden administration to avoid this and buy itself more time until the election”.

Elections in sight

Campaigners hailed the White House announcement as a “bold step” and “a historic win”. Ben Jealous, executive director of the Sierra Club, said the decisions “makes it clear that the Biden administration is listening to the calls to break America’s reliance on dirty fossil fuels and secure a livable future for us all”.

Sixty percent of US voters surveyed in a poll by Data for Progress, a progressive think tank last November supported limiting gas exports.

Gruenig said that the Biden administration had been “growing more careful” about climate considerations in energy infrastructure after approving the Willow oil project in Alaska. “I don’t think the White House expected that would cause such a massive backlash from the climate community”, he added.

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Biden’s statement attempts to draw a dividing line with his likely opponent Donald Trump. He criticised “MAGA [Make America Great Again] Republicans” who “willfully deny the urgency of the climate crisis, condemning the American people to a dangerous future”.

Gruenig believes the LNG expansion freeze will bolster US credibility on the international climate stage, where many developing countries and campaigners regularly point fingers at American hypocrisy over fossil fuel investments.

Lobbyists fan energy security fears

Industry groups have condemned the pause as a “win for Russia” and “a loss for American allies”. As rumors of Biden’s plans swirled around in previous days, the prevailing narrative from pro-gas lobbyists has been that the approvals freeze would put Europe’s future energy security at risk.

Since Russia’s invasion of Ukraine forced the bloc to look for alternative gas sources, US LNG exports to Europe have increased rapidly.

But analysts believe this is going to change soon as a result of rapid renewables rollout and better energy efficiency. By 2026, the International Energy Agency (IEA) predicts European gas demand will be one-fifth below the pre-war level of 2021.

Cop29 host Azerbaijan launches green energy unit to sceptical response

Existing LNG installations should be able to satisfy that demand without any further expansion, according to IEEFA. Their analyst say that, just taking into account terminals already being built, US export capacity by the end of this decade will be three-quarters higher than European demand.

A group of 60 European lawmakers largely from Green parties made that point in a letter to the White House on Thursday, arguing that the fossil fuel industry is using Europe as “an excuse” to expand gas exports. “The demand for new gas from industry voices in Europe is a false one”, they said. 

While using pro-Europe rhetoric, gas producers could actually be looking to sell their products in other, more promising markets. Venture Global, the owner of the CP2 terminal in Lousiana, has signed purchase agreements with Japan and China, for example.

The post US government pauses new gas export terminals in ‘historic win’ for climate appeared first on Climate Home News.

The birthplace of crude refining, Azerbaijan has embedded fossil fuels in the fabric of its society for centuries. Oil, and more recently, gas have never stopped flowing from the vast reservoirs dotted around the Caspian basin.

Feeding energy-hungry consumers across Europe continues to bring immense wealth to the country and particularly its ruling elite. Fossil fuels make up over 90% of all exports and are by far the largest source of government revenue.

But as it gears up to host the Cop29 UN climate summit in November, Azerbaijan wants to show the world a different image. Burnishing its clean energy credentials through its state-owned oil and gas company, Socar, is part of the plan.

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At a board meeting at the end of December, just a few weeks after the country was appointed as Cop host, Socar announced the creation of a green energy division called Socar Green. It is promising investments in solar and wind projects, green hydrogen production, and carbon capture and storage (CCS).

It was a largely unexpected move for a company planning to expand its gas output and recently criticised for lacking any energy transition strategy. The timing sparked suspicions among international observers: are they serious about it or is this just greenwashing?

“A green division is meaningless for the climate without an accompanying plan to phase out oil and gas”, Myriam Douo, a senior campaigner with Oil Change International, told Climate Home. “The reality is that to avoid catastrophic climate breakdown more than half of fossil fuels in existing fields must stay in the ground”.

Oil and gas keep flowing

Despite being heavily reliant on oil and gas, in global terms Azerbaijan is not a major producer. It pumps less than 1% of the world’s oil and gas output.

Its oil is expected to run out in about 25 years and production is already going down slightly as reserves are depleted. But it has enough gas for nearly 100 years and is exploiting more and more of it each year. Industry analysts Rystad expect its gas production to rise by a third in the next ten years.

“The country will not be producing oil and gas forever”, said Gulmira Rzayeva, an Azerbaijani senior research fellow at the Oxford Institute for Energy Studies. “But consumers in Europe, Turkey, Georgia need these hydrocarbons now and, if Azerbaijan alone stops extracting oil and gas, it will absolutely not change anything for the energy transition of the world. If there are such plans, they need to involve all producers”.

Harjeet Singh, a campaigner at the Fossil Fuel Non-Proliferation Treaty Initiative, agreed that to move away from fossil fuels all nations need to “act in concert, each according to their fair share and historical responsibility”. But he added that”every fossil fuel producer, including Azerbaijan, must have a clear transition plan to phase out fossil fuels”.

No transition plans

Government-controlled Socar is at the heart of Azerbaijan’s money-spinning machine. It extracts, transports and refines fossil fuels, usually in partnership with private European companies like BP and Total or other state-run firms like UAE-based Adnoc.

It is also one of the most worst oil and gas companies in the world in terms of its climate credentials, according to the Oil and Gas Benchmark. Out of 99 firms, its researchers ranked Socar 91st.

Amir Sokolowski is global director of climate at CDP, the non-profit behind the benchmark. He says that, at the time of their analysis late last year, “there were no transition plans to speak of and these take a very, very long time to develop”.

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The firm has no emission reduction targets, no commitment to supporting human rights and no long-term transition plan although it does have a “low-carbon development strategy”.

Socar’s latest accounts dedicate pages and pages to oil and gas operations but only a very small paragraph to any form of green energy activities. Their use of wind and solar energy, the report indicated, was limited to powering measuring devices installed on oil and gas pipelines and to illuminating some office buildings.

“This would not seem to be a high priority on their agenda, but we can hope that with the spotlight of hosting Cop29 things may start to change”, Sokolowski added.

Renewables potential

Azerbaijan’s history with renewable energy is largely one of untapped potential and unmet expectations.

In 2020 Azerbaijan set a target of increasing the share of renewables in its electricity mix to 30% by 2030.

Since then, its barely changed, still standing at 6%, which is almost entirely hydropower rather than wind or solar.

The country has “abundant” wind and solar resources, according to a recent World Bank report, but while investment projects have been announced, “little progress” has been made on the ground.

The dominance of state-owned enterprises, like Socar, was cited by the World Bank as one of the biggest challenges to the energy transition.

The development of the only three major renewable projects (one wind and two solar) have so far rested in the hands of foreign companies.

At the end of last year, president Ilham Aliyev inaugurated the country’s first major solar power plant, which could supply up to 110,000 homes with clean energy. Its owner is the Emirati company Masdar, headed by Cop28 president Sultan Al-Jaber.

Now Socar wants its slice of the cake. It said in its initial phase the new green energy division will collaborate on these projects with a view to “expand partnership opportunities” and “incorporate international best practices”.

Plans split opinions

Gulmira Rzayeva thinks it is a strategic decision to make Socar’s green push coincide with the country’s Cop hosting. “Socar can play a decisive role”, she said. “It wants to invest in clean energy and it’s targeting production of green hydrogen not only for domestic use but for export.”

Azerbaijan, Georgia, Romania and Hungary announced last year they would set up a joint venture to lay an electricity cable under the Black Sea, bringing green electricity from Azerbaijan to Europe.

Sokolowski says it is hard to predict what Socar’s green proclamations will amount to.

“Will they be leaders on that front? I find it hard to believe”, he added. But “when it comes to renewable energy, having even just a small unit, something that would be considered greenwashing, actually has an impact. It is the beginning of every change”.

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