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PTInterview: climate finance and COP29
Starting on November 11, COP29 ended in the early hours of Sunday, the 24th, exceeding the official deadline for the event, which was scheduled for Friday (22). The delay was mainly due to discussions on the New Collective Quantified Goal (NCQG), which increased from US$ 100 to US$ 300 billion per year by 2035, for actions to mitigate climate change in developing countries.
“The amount committed is still far from what is needed to address the effects of climate change, especially in more vulnerable countries, whether mitigation or adaptation demands. However, the increase in the target agreed upon at COP29 is still a recognition by the international community of the relevance of the topic and the need for more resources.” This is the view of Bruna Araújo, Sustainable Finance Manager at WayCarbon.
Araújo followed the negotiations and main topics involving climate finance at COP29 from Brazil and gave her assessment in this exclusive interview. The conversation included the main points that companies and governments should observe between the decisions announced at the event and the expectations for COP30, which will take place next year in Belém. Check it out:
1. Can we say that we made progress on the topic of climate finance at COP29? If so, what would be the most significant in your opinion?
B: There was a lot of expectation surrounding the discussion on climate finance at COP29, as it was one of the main topics on the agenda, following the growing prominence of finance in discussions on climate change. At this year’s meeting, we made important progress, such as the commitment of developed countries to increase the amount of resources allocated to this cause. For the first time, China joined this group of countries and the Collective Quantified Goal went from US$ 100 to US$ 300 billion annually by 2035. Another highlight was the approval of new rules for carbon markets, with the advancement of definitions on Article 6 of the Paris Agreement, bringing more incentives for the private sector to participate in this type of mechanism. The challenges remain substantial, but it is still worth celebrating the achievements of COP 29.
2. At the end of the event, a New Collective Quantified Goal was announced, which increased from US$100 to US$300 billion per year by 2035 for actions to mitigate climate change in developing countries. What is your analysis of this amount?
The amount committed is still far from what is needed to address the effects of climate change, especially in more vulnerable countries, whether mitigation or adaptation demands. However, the increase in the target agreed upon at COP 29 is still an acknowledgement by the international community of the relevance of the issue and the need for more resources. An important reflection is not only on the value of the target, but also on how these resources will reach those who need them most. What are the implementation mechanisms? Who will be the beneficiaries? When what we have available is less than what is needed, this type of decision becomes even more relevant so that the goal’s resources make an effective contribution.
3. There is much talk about the impasse in financial flows to address the climate agenda: including which countries should foot the bill, which countries will receive resources, and how this will be implemented. Could you clarify how this global flow of financing for climate action would work in practice?
This is a complex arrangement, which involves a combination of resources from various origins: public sources, contributions from developed countries, for instance (such as the NQCG), and private sources, through the operation of carbon markets and investment in green projects. Once the origin of the resource is understood, we move on to the vehicle that makes the flow of this financing possible. We have multilateral financial institutions, such as the IDB, the World Bank, among others; and climate funds, such as the Green Climate Fund, receiving and distributing these resources to public sector entities, such as a city in a developing country or via direct allocation to sustainable projects that meet the criteria for accessing this type of resource. Therefore, given the multiplicity of actors, origin of resources, and rules for application, it is essential that the different links in the chain are well coordinated so that resources actually reach those who need them.
4. Which COP29 decisions should companies and governments keep an eye on?
In the case of governments, the NCQG provides an opportunity for a greater volume of resources to reach countries, states, and cities. In this regard, investing in climate governance, defining targets, priority projects, etc. is important for more effective action by public entities in attracting these resources. For companies, it makes sense to monitor progress in the regulation of Article 6, which establishes rules for the functioning of carbon markets, especially considering the evolution of climate commitments, whether voluntary or the result of a regulatory movement, which are associated with offsetting emissions and making investments in technologies that reduce carbon emissions. Furthermore, it is worth keeping up to date regarding new demands for climate transparency.
5. Now that the 2024 edition is over, what are the expectations for the COP in Belém next year?
There is much anticipation for the “forest COP”, as the Brazilian government has been announcing the COP that will be held in Belém do Pará next year. It is expected that we will have more clarity on how the “Baku to Belém Roadmap” will be implemented, an initiative that aims to make it possible to mobilize more than 1 trillion dollars per year to combat climate change. With the meeting being held in Brazil, other topics should gain prominence, such as the role of nature-based solutions, the adaptation agenda and the strengthening of the Loss and Damage Fund. Financing will certainly continue to be one of the main themes of the COP, although it will have to share its prominence with themes that are closer to the reality of Brazil and the Amazon rainforest, such as those mentioned above.
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