· 6 min read
Dr. Alessandra Lehmen is an outstanding Environmental and Climate lawyer qualified in the US and Brazil. She has an LL.M. degree in Environmental Law and Policy from Stanford, a Ph.D. in International Law from UFRGS and an MBA from FGV. Alessandra is a Postdoctoral Laureate at the Make Our Planet Great Again Program of the Presidency of France.
Alessandra was at the COP29 as Climate Law and litigation expert.
PG: Climate Finance/New Collective Quantified Goal (NCQG) first. Your take please?
AL: Developed nations have agreed to “take the lead” to channel “at least” $300 billion a year into developing countries by 2035. These flows of capital are vital to developing countries and to keep the 1.5-degree goal alive, and, without accounting for inflation, this is three times the Copenhagen 100 bn, set to expire in 2025. However, the new NCQG number if still largely insufficient to address mitigation, adaptation, and L&D financing needs. Amidst intense debate as to whether a bad deal was better than no deal, the new goal was objected by countries like India and Nigeria (but the text was adopted anyway), and was met with disappointment by many developing nations.
Beyond the numbers, there are noteworthy changes in wording as to sources (calling on “all actors” to scale up funds from “all public and private sources”, including MDBs, to “at least $1.3tn” by 2035) and contributor base (encouraging developing countries to contribute to climate finance “on a voluntary basis”). With an aim to close the finance gap, the “Baku to Belém roadmap to $1.3tn”, a last-minute addition to the text, is now tasked with producing a report on how to scale up finance at COP30 in Brazil.
The good news is that, according to the IPCC AR6, “There is sufficient global capital to close the global investment gaps.” The bad news is that there are barriers to redirect capital to climate action.
PG: May I ask what next?
AL: There is much finance work ahead.
First, we need a clear understanding of what actually counts as climate finance, as it can be assessed through several criteria – for instance, by type of finance instruments (e.g., development aid, equity, or debt); whether it is provided at market or concessional rates; by origin (from public, private, or blended instruments; whether it stems from national or subnational governments, development financial institutions (DFIs), private financial institutions or multilateral funds; by direction of finance flows (domestic, bilateral, or multilateral); whether a project is considered only for the elements that genuinely have a climate component, and so on. Another source of uncertainty is the assessment of whether climate finance is ‘new and additional’ under Copenhagen as this is a concept that lacks formal definition and is therefore subject to interpretation. Also, data regarding climate finance flows are gathered through various methodologies, each with its own interpretations, so we need better metrics.
Second, we need to develop models that don’t drive countries further into debt. De-risking is necessary, but non-concessional models that tie developing countries repayment of high amounts of debt service do more harm than good.
Third, at the risk of stating the obvious, we need to review subsidies: according to the IMF, fossil-fuel subsidies surged to a record $7tn in 2022.
Fourth, and perhaps more importantly, to redirect the global flow of capital, economy-wide, to the climate transition, per Article 2.1(c) of the Paris Agreement. Despite efforts by the United Nations to create universal categories that promote transparency and accountability, there is still no consensus on what counts as climate finance, and these ambiguities make it harder to assess the amount of resources that have actually been mobilized, and, most importantly, still need to be mobilized for climate projects. The good news is that, according to the IPCC AR6, “There is sufficient global capital to close the global investment gaps.” The bad news is that there are barriers to redirect capital to climate action.
The report adds that “Barriers include institutional, regulatory and market access barriers bridge the investment gap required for climate action”. So I think securing additional funds for mitigation and adaptation is of course important, but perhaps the primary challenge is to redirect the money pipeline in order to align global capital towards climate.
As imperfect as climate multilateralism is, we’re worse off without it. Either way, in the lead-up to COP30, in my home country of Brazil and where a new set of NDCs is due, we’ll need to ramp up not only ambition, but, crucially, implementation.
PG: Carbon markets – a breakthrough?
AL: COP29 broke a decade-long stalemate and delivered on both Article 6.2 (country-to-country trading) where high-level decisions with regard to authorizations, registries, and integrity/a process to identify and correct inconsistencies were reached; and Article 6.4 (Paris Agreement Crediting Mechanism), with the establishment of a mandate to Subsidiary Bodies to ramp up implementation, mandatory human rights checks, and alignment with the “best available science”. Carbon market discussions are highly technical and complex, and therefore slow, but with the consensus reached at COP29 markets can now finally become operational.
PG: Any progress on Energy transition?
AL: COP28 agreed on much-celebrated “transitioning away from fossil fuels” language, but at COP29 there was no decision on how to implement this transition, and no mention of fossil fuels in the outcome documents.
PG: Any progress on Global Stocktake (GST)?
AL: There was no agreement on how last year’s global stocktake/UAE Dialogue should move forward. Developed and developing countries demanded stronger commitments, but Saudi Arabia opposed the inclusion of specific fossil fuel language. As a consequence, the UAE dialogue was postponed until next year.
PG: Thoughts on geopolitics/governance?
AL: Negotiations were overshadowed by the likelihood of the US pulling out of the Paris Agreement/the Convention, criticism of the Azerbaijani COP presidency, Argentina recalling its delegates, and accounts of Saudi Arabia changing a text under negotiation. There were calls, including by former UNSG Ban Ki-moon, for reform of the COP process.
COP29 delivered a mixed bag of incremental progress and challenges. 2024 is likely to be the hottest year on record, and, according to the ICC, extreme climate events have cost over US$2 trillion in the last decade, a context that make COP29 results look paltry.
PG: Was this COP a flop show?
AL: I won’t join the “Flop29”, chorus: by delivering deals on key agenda items, COP29 is still a step forward, and has the merit of reaffirming the role of climate cooperation in a world fraught with geopolitical and economic tension. By avoiding a deadlock, COP29 prevented a COP29-bis led by Azerbaijan, the no-deal outcome of CBD COP16, and Rule 16 to kick in and postpone the NCQG decision to next year. As imperfect as climate multilateralism is, we’re worse off without it. Either way, in the lead-up to COP30, in my home country of Brazil and where a new set of NDCs is due, we’ll need to ramp up not only ambition, but, crucially, implementation.
PG: Many thanks Alessandra for this perspective. Brazil next! The world would be watching – after all the challenges petrostates as hosts tend to throw up. So hopefully the much desired great leap forward then.
This article is also published on the author's blog. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
