As we look toward COP29, happening from November 11-22, 2024, in Baku, Azerbaijan, the stakes are higher than last year’s COP28. This year, nations and businesses worldwide will come together to address climate challenges, guided by the theme of Enhancing Ambition and Enabling Action. COP29 will challenge both governments and the private sector to accelerate progress and meet global climate commitments.
Nigar Arpadarai, UN Climate Change High-Level Champion for COP29, has emphasized the essential role of the private sector in climate action alongside government initiatives. As the private sector becomes more involved in delivering large-scale climate solutions, here are the key themes expected to dominate the agenda at COP29 and their implications for businesses.
1. Climate Finance and the New Collective Quantified Goal (NCQG)
COP29 is being called the “Finance COP” as negotiations for a new climate finance goal will dominate the agenda. The new global climate finance target will build on the outcomes of the Global Stocktake, agreed by Parties at COP28. The COP29 Presidency’s top priority is to agree on a fair and ambitious New Collective Quantified Goal (NCQG), replacing the previous $100 billion per year commitment, which was set in 2009 and only recently met. Discussions suggest the new target could exceed $500 billion per year.
Key points
- The negotiations this year are expected to address both the quantity and quality of financial support needed.
- The European Union, currently the largest contributor, seeks to expand the contributor base by involving recently wealthier countries.
- The NCQG aims to enhance funding accessibility for developing nations and align contributions with their urgent needs.
What it means for the private sector
- Businesses should prepare to adjust their strategies to capitalize on new opportunities in climate finance and clean energy investments.
- The operationalization of the Loss and Damage Fund may also be part of the NCQG discussions, further increasing the importance of private sector involvement in funding climate resilience.
2. Investing in new technologies and clean energy connectivity
Accelerating the transition to renewable energy sources is crucial to achieving net-zero emissions by 2050. Discussions at COP29 will focus on eliminating fossil fuel subsidies, redirecting investments towards clean energy, and advancing zero-emission technologies such as clean hydrogen.
Key Points
- Zero-emission technologies, like clean hydrogen, will play a significant role in these discussions.
- Cross-country green infrastructure development will also be explored, promoting resilient and sustainable energy systems.
What It Means for Businesses
- Companies that invest early in green energy initiatives, like hydrogen, will gain a competitive advantage in securing funding and capturing market share in a rapidly evolving energy landscape.
- COP29 offers an important platform for energy producers and investors to collaborate across sectors and geographies, creating new business models and market opportunities for clean energy solutions.
3. Mitigation
COP29 will put the spotlight on the need for all Parties to integrate non-carbon dioxide (non-CO2) emissions into their Nationally Determined Contributions (NDCs), which are due to be updated shortly after the conference. Key sectors such as agriculture, waste management, and methane reduction will take center stage, as countries collaborate to address other non-CO2 greenhouse gases alongside CO2 emissions.
Key points
- Countries are expected to update and strengthen their NDCs, to align with the 1.5ºC target.
- COP29 will host a Methane and Non-CO2 Greenhouse Gases Summit, co-organized by the U.S. and China. This summit will push nations to commit to reducing methane and other non-CO2 emissions.
What it means for businesses
- The NDC updates will likely include sector-specific targets for industries like energy and transportation, putting a spotlight on emissions reduction in these areas.
- Agriculture, waste management, and energy sectors will face increased scrutiny regarding their non-CO2 emissions, particularly methane, prompting companies in these industries to adopt innovative solutions to reduce their emissions and remain competitive.
4. Adaptation Strategies
As countries are facing more severe climate impacts, adaptation is a central topic at COP29. The conference will prioritize National Adaptation Plans (NAPs) and push for greater financial support to help vulnerable nations prepare for the adverse effects of climate change.
Key points
- COP29 will emphasize the need to double adaptation finance by 2025 to ensure vulnerable countries have the resources to implement climate resilience measures.
- This push for greater adaptation finance reflects the increasing urgency to balance funding between adaptation and mitigation efforts.
What it means for the private sector
- The focus on adaptation creates new business opportunities in sectors such as infrastructure, construction, and climate resilience projects.
5. Nature-Based Solutions
Integrating nature into climate action is another key theme at COP29. Nature-based solutions (NbS) are gaining recognition for their ability to mitigate climate change while promoting biodiversity and enhancing resilience as part of broader climate strategies.
Key Points
- NbS incorporate the protection and restoration of ecosystems into climate action to address both carbon reduction and climate resilience.
- These solutions will leverage natural systems, such as forests, wetlands, and mangroves, to capture carbon, safeguard biodiversity, and reduce the impact of climate-related risks.
What It Means for Businesses
- Corporations that integrate NbS into their sustainability plans, aligning their environmental goals with global efforts to protect and restore ecosystems, can support climate action while fostering biodiversity conservation.
- Businesses that adopt NbS can contribute to long-term environmental resilience and position themselves as leaders in corporate responsibility.
6. Focus on Small Businesses
There is a growing recognition of the role small businesses play in climate action, as small businesses represent 90% of all businesses in the world and generate 70% of global jobs.
Key Points:
- Initiatives at COP29 will aim to increase access to resources and tools for small enterprises, empowering them to adopt sustainable practices and integrate climate resilience into their business models.
What It Means for Businesses:
- Large corporations have the opportunity to partner with small businesses, helping them implement sustainable practices and achieve climate goals across supply chains.
Conclusion
The overarching goal of COP conferences remains to strengthen global cooperation in tackling climate change while pushing the public and private sectors to increase their commitments under the Paris Agreement. At COP29, countries will be expected to show greater responsibility and accountability, with a renewed focus on sector-specific strategies and the inclusion of small businesses in climate action.
For the public sector, COP represents an increasingly pivotal moment to upgrade their climate policies. Countries on track with ambitious climate goals for 2030 or 2040 will reinforce their strategy at COP29, whilethe less advanced countries can take advantage of COP29 to upgrade their climate policies and make more decisive progress. Azerbaijan, for example, wishes to lead by example and has launched the green energy transition initiatives. These initiatives want to increase renewable power capacity to 30% by 2030 and diversify its existing energy system with the aim to become a leader in green energy.
For the private sector seeking to thrive in a low-carbon economy, engaging with these developments is crucial. The private sector must demonstrate leadership by ensuring transparency in how they allocate capital and align investment decisions with global climate goals.
Join our Takeaways Webinar
COP29 will take place from November 11 to November 22, 2024. To help businesses understand the outcomes and potential impact of the conference, STRIVE by STX will host an informative session on Wednesday, November 27. In this session, we will dive into the key takeaways from COP29 and discuss what they mean for corporates worldwide.
Can't attend? Don't worry! We will also publish a COP29 Key Takeaways report.
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