Baku, Azerbaijan:

US climate envoy John Podesta on Monday urged governments to keep faith in the country’s promise to combat global warming, saying Donald Trump can slow, not stop, the transition from fossil fuels when he returns to office in January.

The annual UN climate summit began on Monday in Baku, Azerbaijan, with many country delegations concerned Trump’s victory in the US presidential election on Nov. 5 would hinder progress to limit planetary warming.

Trump has promised to again remove the United States, the world’s biggest historic greenhouse gas emitter, from international climate cooperation and maximise the country’s already record-high fossil fuel production.

“For those of us dedicated to climate action, last week’s outcome in the United States is obviously bitterly disappointing,” Podesta said at the summit.

“But what I want to tell you today is that while the United States federal government, under Donald Trump, may put climate action on the back burner, the work to contain climate change is going to continue in the United States.”

He said the Inflation Reduction Act (IRA), President Joe Biden’s landmark climate legislation providing billions of dollars in subsidies for clean energy, would continue to drive investments in solar, wind and other technologies, and that U.S. state governments would also push emissions cuts through regulation.

“I don’t think that any of that is reversible. Can it be slowed down? Maybe. But the direction is clear,” he said.

Although Trump has promised to rescind the IRA, to do so would require an act of Congress – and that could be elusive due to support from some Republican lawmakers whose districts benefit from IRA-linked investments.

AGENDA WRANGLING

As well as the U.S. election, the talks in Baku are vying for attention with economic concerns and wars in Ukraine and Gaza.

That complicates the summit’s ambition to resolve the priority agenda item – a deal for up to $1 trillion in annual climate finance for developing countries, replacing a target of $100 billion.

U.N. climate chief Simon Stiell sought to whip up momentum.

“Let’s dispense with the idea that climate finance is charity,” he said at the Baku stadium. “An ambitious new climate finance goal is entirely in the self-interest of every nation, including the largest and wealthiest.”

This year is on track to be the hottest on record. Rich and poor countries alike have been challenged by extreme weather events, including flooding disasters in Africa, coastal Spain and the U.S. state of North Carolina, and drought gripping South America, Mexico and the U.S. West.

But even agreeing one of COP29’s first tasks proved a challenge: the agenda for negotiations was delayed by more than five hours before being approved.

Four sources with knowledge of the closed-door discussions, asking to remain anonymous, said the European Union and small island countries had demanded nations discuss how to build on last year’s deal to transition away from fossil fuels.

Fossil fuel-producing Gulf states wanted to limit discussions to the elements of last year’s COP28 deal related to finance, the sources said.

In the end, countries agreed they would discuss the COP28 agreement, but left open where these talks would focus.

They also endorsed a set of carbon credit quality standards seen as critical to launching a U.N.-backed global carbon market to fund projects that reduce greenhouse gas emissions.

And countries sidestepped a spat over trade tensions, after China had asked to include concerns about some countries’ trade policies on the COP29 agenda. Beijing withdrew its proposal, settling instead for informal talks on the issue with Azerbaijan’s COP29 presidency.

Trade has gained importance as an issue for China, already facing EU tariffs, because of Trump’s campaign promise to impose 20% tariffs on all foreign goods, and 60% on Chinese goods.

Many also worry U.S. disengagement could lead other countries to backpedal on existing climate pledges or scale back future ambitions.

“People will be saying, well, the U.S. is the second biggest emitter. It’s the biggest economy in the world … If they don’t set themselves an ambitious target, why would we?” Marc Vanheukelen, the EU’s climate ambassador from 2019 to 2023, told Reuters.

Podesta said China, currently the world’s biggest emitter, has an obligation to step up, in part by developing a plan to cut emissions that is aligned with the 2015 Paris Agreement goal to limit planetary warming to 1.5 degrees Celsius above pre-industrial levels.

“They have an important role to play and I hope they play it,” Podesta said.

Host Azerbaijan has lobbied governments to accelerate their move to clean energy while touting gas as a transition fuel. Its oil and gas revenues accounted for 35% of its economy in 2023, down from 50% two years earlier. The government says these revenues will decline to 22% by 2028.

President Ilham Aliyev has called Azerbaijan’s fossil-fuel bounty “a gift of God,” and Baku has proposed creating a Climate Finance Action Fund to collect voluntarily up to $1 billion from extractive companies across 10 countries including Azerbaijan.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Baku, Azerbaijan:

Countries at the United Nations COP29 climate summit in Azerbaijan will attempt to agree rules for a global system for trading carbon offset credits.

Here’s what you should know:

WHAT ARE CARBON OFFSETS?

Some governments and companies may struggle to reduce their planet-warming greenhouse gas emissions to meet their climate targets. Supporters of carbon offsets see them as a key means to help meet these goals.

These offsets allow one nation or company to offset some of their emissions by paying for actions to cut emissions elsewhere. These actions might include rural solar panel installations or converting a fleet of petrol buses to electric.

WHAT IS ARTICLE 6?

Article 6 of the Paris Agreement helps countries work together to reduce their carbon emissions. It sets out two options for countries and companies to trade offsets, helping them meet the goals they set to reduce planetary-warming gases in their climate action plans, known as nationally determined contributions (NDCs).

One allows two countries to set their own terms for a bilateral carbon trading agreement, this is known as Article 6.2. The second aims to create a central, UN-managed system for countries and companies to begin offsetting their carbon emissions and trading those offsets, known as Article 6.4.

Article 6 is seen an important mechanism for delivering climate finance to developing countries, and a Paris Agreement carbon market, if launched, could continue operating even if the United States under Donald Trump withdraws support for the Paris Agreement.

WHAT’S BEEN DECIDED SO FAR?

At the COP26 climate summit in Glasgow, negotiators reached a breakthrough agreement that established a broad rulebook to regulate trading of carbon credits.

But after two weeks of talks at COP28 in Dubai, countries failed to seal a deal on necessary details to operationalise a central carbon trading system or to clarify rules for nations wanting to make bilateral arrangements.

Some countries like Japan and Indonesia have decided to press ahead with bilateral agreements without those clarifications and are already preparing to trade carbon credits, known as “internationally transferable mitigation outcomes” (ITMOs). The UN says 91 agreements had been made between 56 countries as of October this year. Thailand and Switzerland completed the first sale in January, and the market for bilateral trade agreements is still quite small.

Some buyers are worried there are not adequate rules to stop countries changing the terms of the agreements, or revoking them, and that there is not a robust system to ensure that credits bought and sold are not being counted by both the buying and selling countries.

WHAT WILL BE DECIDED AT COP29?

Officials are keen to secure an early “win” on Article 6 at this year’s climate conference.

Market watchers are hopeful an agreement can be reached to set guardrails for the bilateral agreements and to operationalise the UN-backed centralised marketplace.

Guardrails include checks and balances to provide assurance countries are buying and selling actual emissions reductions. Some countries for example want methods nations use to generate credits to be checked internationally.

Countries will also negotiate whether the UN’s central registry can itself house credits that can be transacted and retired or whether it should operate just for accounting purposes.

An expert group elected under United Nations rules has already hammered out a framework for the multilateral trading system to ensure credits meet basic quality standards. But countries at COP29 can decide to either sign off on this standard, open up further discussions, or reject it.

After COP29, the technical expert group will meet again to agree which methodologies for generating carbon credits through cookstoves projects or reforestation for example can issue credits into the new Paris Aligned system.

If the key points are resolved this year, the system could launch as soon as 2025.

WHAT DOES THIS MEAN FOR THE VOLUNTARY CARBON MARKET?

Some companies that are under no legal obligation to cut their emissions have set voluntary targets, which they can meet partially through buying credits on a voluntary carbon market. In 2022, the voluntary market was valued at about $2 billion worldwide. But the market value plummeted to $723 million last year after being shaken by repeated scandals.

Linking up carbon projects currently in the voluntary market with the Paris Agreement system could boost confidence.

Developers of projects like mangrove restoration to regenerative agriculture can apply to have their credits sold under the UN system, meaning that if approved, they could sell in either that system or on the voluntary market. Experts expect UN-approved credits to carry a higher price tag.
 

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)