COP29 and the state of climate finance
- Date: 12 November 2024
This week marks the start of the annual UN climate conference, known as COP29, in Baku, Azerbaijan. COP29 is being dubbed the “finance COP” because one of the main focuses of this year’s conference will be to set a new goal for global climate finance and to lay out a plan for achieving it. The last time countries set a climate finance goal was 2009, at COP15 in Copenhagen, where wealthy nations committed to provide $100 billion annually to help developing nations deal with climate change.
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15 years after the $100 billion target was established, we now know a lot more about the effects of climate change and how much it costs to address. Estimates vary on how much funding is now needed, but suffice to say that it’s a lot higher than we thought it was back in 2009. So, where will this funding come from? And what’s a reasonable new goal for countries to work toward in the years ahead? Joining me today to talk through these and other questions is Tim Juliani, WWF’s director of US corporate climate engagement. Tim is a veteran of previous climate COPs and he’ll tell us what he’s keeping an eye on heading into Baku.
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TRANSCRIPT:
Seth Larson: Hey folks, just a quick note at the top of this episode. You are about to hear a conversation about this week's UN climate conference, and what is on the agenda there in terms of climate finance and other topics. The conversation was recorded prior to the recent US election. But most of what we talked about still holds true.
You will hear all about the major topics that countries will be addressing at the conference. And of course, the fundamentals of climate change remain. Greenhouse gas emissions are driving warmer temperatures and more extreme weather everywhere on Earth, and we need to come together as a global society to act.
But for this podcast, I also wanted to just acknowledge that the role the US government plays in these climate conferences, and in implementing the underlying Paris agreement, is likely to change in the coming months with the new administration moving into the White House. We will see what exactly that change looks like in due time.
And we will spend a future episode looking at the policy landscape for climate and nature given the new reality in the US. For now, we just wanted to acknowledge this context upfront. I think you will still find this to be a really helpful episode for understanding the stakes at COP29. I hope you enjoy it. And thanks for listening.
Seth Larson: Welcome to Nature Breaking a World Wildlife Fund podcast focused on the news and trends affecting our natural world and the people and species who call it home. I am Seth Larson. And coming off the heels of the UN Biodiversity Conference, which was known as COP 16, we are now diving headfirst into the UN climate conference known as COP29.
COP29 just kicked off yesterday on November 11th in Baku, Azerbaijan, and it's being dubbed the "finance COP" because one of the main focuses of this year's conference will be to set a new goal for global climate finance and to lay out a plan for achieving it. Now, as background, the last time countries set a climate finance goal was back in 2009 at COP15 in Copenhagen, where wealthy nations committed to provide $100 billion annually to help developing nations deal with climate change.
Now, those wealthy nations, including the US, were supposed to deliver on that commitment by 2020, but did not actually do so until 2022. And of course, 15 years after the $100 billion target was established, we now know a lot more about the effects of climate change and how much it costs to address.
Estimates vary on how much funding is now needed, but suffice to say, it is a lot higher than we thought it was back in 2009. So, where will this funding come from? And what is a reasonable new goal for countries to work towards in the years ahead? Joining me today to talk through these and other questions is Tim Juliani, WWF's director of US corporate climate engagement. Tim is a veteran of previous climate COPs, and he will tell us what he is keeping an eye on heading into Baku. As always, please take a moment to subscribe to Nature Breaking on YouTube, Apple Podcasts, Spotify, or wherever you get your podcasts. And now, here is my conversation with Tim...
Hey, Tim, welcome to Nature Breaking.
Tim Juliani: Great to be here. thanks for inviting me.
Seth Larson: Yes. Excited to talk about COP29 with you and before we dive into the agenda for the conference, I wanted to just take a second to orient ourselves a little bit around this issue. And I just wanted to start by taking it out to the big picture. You know, these climate COPs, they happen every year and I have heard it said that there are big COPs where huge agreements like the Paris Agreement are struck or where major new goals are set. And then there are implementation COPs, which focus more on the nuts and bolts of achieving those big goals. And there tend to be, I think, five-year cycles between a big COP and the implementation COPs. How would you characterize COP29 within that framework?
Tim Juliani: Yes, it is, it is a really interesting question, and I think it’s; it's evolved a bit over time. If you will allow me to give a short history lesson. You know, we first created the UN Framework Convention on Climate Change, back in 1992 at the Rio Earth Summit. And then it was ratified just two years later in 1994, and the very first COP happened in Berlin in '95, right?
So, you know, I was just out of college at that point and then they got to work negotiating what was known as the Kyoto Protocol, that was sort of the big first phase of the, the negotiated commitments and they set up targets and timetables and for developing for developed countries, excuse me. And while that was negotiated in '97, it took until 2005 for that to be ratified, right? So, you went from the framework convention, which was ratified in two years because did not really hold anybody to do anything. Kyoto, which required something took, you know, a good eight years. And then you had COP15 in 2009, and that was my first COP, first of 13 COPs.
Seth Larson: That was in Copenhagen, right?
Tim Juliani: That was in Copenhagen, which was incredibly Christmassy. I mean, it was beautiful, it was snowing, it was, you know. But as ideal as the setting was, you could not be farther from that in terms of negotiations, which sort of famously collapsed. And that kind of set us on to the, this... this, schedule that you are talking about, right? So, in 2009, negotiations for a post Kyoto agreement collapsed. The idea that we would have targets, timetables, cap, and trade going on, ad infinitum. And that led us to, of course, the Paris Agreement in 2015, COP21. And it totally reconstructed the paradigm of how we engage in climate internationally. So, instead of those targets and timetables, you had a very, you know, instead of top down, now it is bottom up and with nationally determined contributions and, a cycle... actually, it is kind of like two five-year cycles. So, you know, the nationally determined contributions or NDCs are on five-year cycles; so, it is 2015, 2020-21, because of the pandemic, and now 2025. But one more thing is you also have these global stock takes, which is looking at how we are doing. Those happen on five-year cycles as well, but on off years, right?
So, we just had a global stock take last year. And all of this is to say is, that is good because we cannot take climate change seriously only every five years.
Seth Larson: Yes, that is a great point. And you just threw a few big terms at us. You defined them a little bit, but just too, since we will be talking about these as we go on: nationally determined contributions, NDCs. Those are the country-by-country plans or roadmaps for how each country is going to meet its goals under the Paris Agreement. Looks different for every country, but cumulative, cumulatively, they're supposed to add up to, helping us achieve the Paris Agreement's goal of limiting global warming to 1.5 degrees and the global stock take, you just said is basically the process by which we take stock of how far we are in progressing toward that goal.so I said in my intro that some people are calling COP29, this year's COP, the finance COP. And I wanted to ask you to talk a little bit about why that is and what is on the agenda this year in terms of finance.
Tim Juliani: Yes, so I mean, look, with the unbelievable amount of finance that we need to, to transition the, the global economy, really every COP is a finance COP or should be a finance COP.
Seth Larson: Right. Right. You know, you mentioned in the intro the, a hundred billion dollars, annual, pledge that actually came out of Copenhagen. That was one, one thing out of Copenhagen. And you know, we just by hook or crook made that goal in 2022.and so really this, you know, one of the reasons this is going to be, hopefully the finance COP is we are going to negotiate a new target for, for climate finance. And the question is, of course, what will that be?
Tim Juliani: So, the, they are calling it the new Collective Quantified Goal for Carbon Financing, because we cannot help ourselves really, you know.
Seth Larson: I hope that by the end of the COP, someone produces a better term or an easier acronym to go by because that one does not flow easily.
Tim Juliani: I, you know, I would not count on it. You know, we, we have Beyond Value Chain Mitigation, of course, in our world, BVCM, lots of bad, you cannot even call them acronyms because they do not spell...
Seth Larson: Yes.
Tim Juliani: They are abbreviations. So it is, you know, up for debate. And you know, when you think that developing countries will need anywhere between $1 and $3 trillion, annually to, to hit the goals of the, the Paris Agreement, you know, that's, um, obviously a staggering amount and I think it's hard to say where the, the negotiations will end. I mean, we, we are at $100 billion now. The top end is $3 trillion.
I am going to go out on a limb and say, it is probably going to be somewhere between $100 billion and $3 trillion.
Seth Larson: Well, that is a bold suggestion, Tim. I appreciate you being so specific to us. Let us talk about that a little more. We just came out of COP16, CBD COP16, which is the biodiversity COP, a separate work stream from the climate COP, but all under the auspices of the UN. Finance was a big stumbling block at the CBD COP in Columbia.
And in fact, that conference ended without an agreement being put in place on how we are going to finance the, the work that needs to happen to protect biodiversity around the world. But the, the big estimate there is we need about $700 billion dollars annually for biodiversity. And for climate, it is $1 to $3 trillion. Where do those estimates come from? And what are the kind of conversations that countries are going to be having around COP, twenty-nine in Baku, too, to figure out the best path forward?
Tim Juliani: I mean, so it is a range of estimates, both from, you know, private sector groups, reports from, you know, BCG and McKinsey and others. You see academic reports, UN, you know, World Economic Forum. I mean, everybody has sort of an estimate, right? And they are all at the sort of monopoly money level, right?
Just how are we, you know, how can we do this? Now, the global economy is around $105 trillion, right? So, in that context, suddenly, $1 to $3 trillion does not look quite as much. A trillion is not what it used to be, right?
Seth Larson: Well, yes, I, I pointed out in our last, a couple of episodes ago, the annual US budget for the US government is over $6 trillion annually. And so, when you are talking about a global figure for every country to pool their money together to tackle something like climate change, well, maybe $1 to $3 trillion it makes more sense in that context.
Tim Juliani: And, you know, you also must look at the, the net present value of that in terms of avoided costs for, sea level rise and, and other types of impacts. I mean, when I first, my first job as it were around climate change was, I was a junior in high school working for a professor at Wesleyan University who was doing a study on the economic costs of sea level rise.
Um, now this was 1987, right? So, I’d never heard of climate change before, but sea level rise at that point, had been about three inches since the beginning of the industrial era.in the three decades since it's been another four inches and by 2050 could be one and a half feet or more, right? So, we look at the impacts of what happened with the last couple of hurricanes in Florida and imagine the storm surge from a 1.5-foot higher baseline, right? And the warmer atmosphere, we know, holds more moisture and so we get more floods, and these are, you know, incredible costs. So, you know, we must always be thinking about both sides of the ledger. It is not just a cost, it is a savings and there is an opportunity too in a lot of those investments, right, that also create health benefits. They create, you know, community benefits, biodiversity benefits. If we just sit around thinking about $3 trillion, I cannot believe it, our heads will explode. But, uh.
Seth Larson: Well, so let us dive into this a little bit more. And I want to bifurcate our conversation now into two tracks. And that is what governments are going to be asked to do and what the private sector might be asked to do. And just to lead with the government side, because that at the end of the day, this is a, this is a UN Conference. Then, the parties to the climate change convention are governments. These are, it's governments that make these agreements and, and, and actually execute on them.so that $100 billion goal that was set back in 2009 in Copenhagen, that was a promise from wealthy countries like the US to contribute into a fund to help developing nations pay for the cost of climate change. The idea being that the US and other global north countries have contributed the most greenhouse gas emissions over the decades, which have caused this problem of climate change. And so, they are going to put into this fund to help these developing countries that have put far fewer emissions into the atmosphere to pay for the effects of what is happening as a result.
Tim Juliani: And so, I am curious, is the, is there going to be an effort to basically just re up that or refresh that promise from wealthy nations toward developing nations and just come up with a new number that makes sense in the current context? Or is there going to be a reframing around them, the thinking of how that is all constructed? Well, you know, I think the, the, the restating is that, that NGQC, um, NCQG that I talked about earlier, right? And, you know, can, how close can we get to a trillion dollars? And the, the WWF International every year puts out a expectations paper, and a policy paper around COP. You can find those on the, the WWF website. WWF is calling for it to be, a trillion-dollar goal. And that it should be trillion dollars that is equivalent to grants, not just sort of cobbled together by a lot of things that sort of already exist and repackaged.
Seth Larson: This is, this was a big focus of the biodiversity conference also that we don't want to, create more of a debt burden by, funneling too much nature finance or biodiversity finance, as it were there, through the form of loans, because then you're just saddling developing countries with more debt that they have to pay off down the road. So, moving towards more of a grant-based framework is important for those countries.
Tim Juliani: 100 percent and, you know, and you asked, about, well, I do not know if you want to get into the corporate side of this quite yet...
Seth Larson: Yes, actually, I mean, we can, we can, we can do that now, I think, because that's maybe the other, the other side of this equation that's really important to talk about. So, you know, we have been talking about governments. I will just acknowledge that a big elephant in the room, going into the, into COP29 is the US election. You and I are recording this on Monday, November 4th. So, we have no idea what the outcome of the US presidential election is going to be. And WWF being a nonpartisan organization, I don't necessarily want to go too far down that path, in our discussion here, but suffice to say there will be radically different expectations for what the US government might be contributing on climate finance in the next few years, depending on which party gains control of the White House.
But whether we're talking about, maybe making up for a shortfall there on the US side, or just globally, overcoming any funding gap that might exist between what governments are willing to commit to and what's actually needed, based on science, there's another funding source that could play a role there. And that is, that is the private sector. What role will companies play in meeting climate finance goals at COP29? And what are you looking to see from that side of the ledger?
Tim Juliani: Yes, it is a great question. And so, we, you know, work with the private sector, obviously, across WWF, but my team engages a couple of dozen Fortune 500 companies in our climate business network. and they are all working towards some level of target. Most of them have science-based targets, and we are working with the others to set them with the science-based targets initiative...
Seth Larson: And science based targets, we should say, are, basically a framework for companies to set, it's not necessarily a finance target specifically, but for companies to solidify a plan for how they're going to reduce their own emissions or the emissions of their value chains, and all of the, the products they source, to reduce emissions as much as possible in line with what's called for in the Paris Agreement, right?
Tim Juliani: Correct, well, and, and it is not, they are not finance agreements per se, but, or commitments per se. But obviously to get to the kinds of reductions you need; to achieve a science-based target, it takes finance. You know, both internal and, um, and it will take the globe decarbonizing, right?
I mean, supply chains, the whole nature of scope 3, if you, you know, in the greenhouse gas accounting world, scope 1 are all the emissions that you put out yourself. So what's coming out of smokestacks, the energy burned, process emissions, et cetera. Scope 2 is from electricity, purchased electricity, and then scope three is everything else, right?
So upstream, downstream, use of sole products, et cetera. And for a lot of the companies that we work with, many of the companies, in the economy, scope three is ninety plus percent of their emissions, right? And so, it is extremely important. But it is going to take a combination of finance from the companies and global commitment to get there, right?
Because scope three is sort of a reflection of the global carbon economy, right, in in your supply chain. All that to say that the corporate commitment to this is obviously incredibly important, too and there should be, ideally, a virtuous cycle, you know, between corporate commitments and government commitments, right? Corporates show that it can be done. They give, countries, both through their NDCs and collectively the confidence that these kinds of transformations can happen in the economy. It is not like corporations show up at COP and say collectively we are going to do X. Right, that that does not happen.
Um, but, you know, companies will certainly be there. Mars, for instance, um, has put out a climate transition plan, and they have said that to get to where they need to before 1.5 by 2050, net zero by 2050, will take 1 percent about, of their revenue over that period. Right? So that's sort of an implicit finance contribution, right? And most other companies who have SBTs are also thinking along similar lines in terms of the, the amount of money that, that it will take. Not everybody is putting in or considering 1%, but we do feel like companies should be pricing their emissions, and then taking that commitment, maybe at the social cost of carbon and saying, this is the amount of money that we should put towards both our own operational reductions and then financing in and beyond the value chain.
Seth Larson: Yes. And just to put a finer point on it, is there any thought that companies might go as far as pledging into a fund to finance, on the groundwork happening in developing countries to help those countries deal with climate change? Or is that kind of, are these just different parallel complementary, but different work streams that will be happening within the framework of the climate COP?
Tim Juliani: I am not the right person to ask on the, the, Thing, and the, the corporate funding into that. What I will say is, is that a huge proportion of global value chains are in developing countries, right. So, a lot of the finance that will flow from companies, into their value chains is going from the, you know, or will go from the global north to the global south. The question is, how do we incentivize that to the degree that we, that we need to? And at, you know, WWF and SBTI have been thinking about that in terms of, sort of new paradigms around being able to, to claim interventions on scope 3, we put out a paper in July, that talked about some approaches that, WWF is looking at. You know, we will have the new SBTI, net zero draft, criteria out at the beginning of the year. And of course, there is also the greenhouse gas protocol that is, is working on this. And I will be on the, or I am on the actions and market instruments working group of the new GHGP process. This whole ecosystem of, as it were, of net zero is trying to, to figure out how do we best incentivize, that flow into, into value chains, and into the global south.
Seth Larson: Yes, no, that is a great point. I mean, so many of, of the products we buy and the food, the food we purchase, the clothes we wear, a lot of the raw materials that go into that come from places like the Amazon rain forest or, or, or Southeast Asia. And so, when you are talking about companies getting involved in putting money behind initiatives, a lot of that money will logically flow to the places on the ground where that work's happening. So, thanks for, thanks for pointing that out.
So, I will move us beyond finance now. I appreciate you diving into that and explaining something, explaining all that for us. But finance isn't going to be the only thing on the agenda at COP29. Earlier, you referenced the nationally determined contributions or the NDCs and all the parties of the Paris Agreement are on the hook to deliver updated NDCs in early 2025, which is just a few months away. Right now, we know the previous round of NDCs left countries far short of what is needed to really meet that goal of limiting global warming to one and a half degrees. And I wanted to ask what we expect to see on the NDC front at COP29. Are we thinking that countries will be announcing new NDCs during the conference? Will there be an effort to put pressure on countries to do that? What are you expecting there?
Tim Juliani: I feel like NDCs are always in some process of, you know, coming out or being renewed. It feels like every year there is, you know, and yes, we are on this five-year cycle, but they never seem to come in quite when they are supposed to. And, um. And, you know, so this, this next round, like you say, due next year, would take us to 2035 in terms of the goal year or 10-year, time. And yes, we are, we are, we are not on track, right. Every year like clockwork, the UN publishes its emissions gap report, which is a treatise on, on global collective failure when it comes to emissions reductions. And, you know, the last I think this year, the title is "no more hot air". Last year was "broken record", which was a play on the fact that this happens every year, but also that record temperatures, you know, were set last year. The year before was "closing window". The year before it was a "heat is on", right? Like, so, coming, having to produce a new title every year is probably, getting pretty tough.
But the, the reality is, is that, you know, the US NDC right now is for a,50 to 52% reduction by 2030.the Rhodium Group, which is a group that does a lot of great research on this said, I think it was about back in July that we're on track for about 32 to 43 percent by 2030 right now.
That is about ten percentage points better than before the IRA, Inflation Reduction Act, and all of its incentives came out, but it's still not where we need to be, right? And the globe is the same, right? We are, we are trying to get to 1.5, and we are somewhere between 2.5 and 3.1 degrees, if, if we go as we are now.
Seth Larson: Tim, I, I do not want to keep you for too long. I have just one last question for you before I let you go. I want you to imagine that, um, the, this, conversation we're recording now is going to be broadcast on the big screen in the, the, the, the room at COP29, where all the negotiators are meeting and you have one minute to tell all the decision makers in the room what you're looking for them to do at COP29.
Tim Juliani: What is your message to them? That is a tough one. I mean, it is pretty simple, right? Look at yourselves. We all have things that we know are shortcomings and that we are not doing to, to, to address climate change. And we all must look at those and say, over the next couple of years, you know, how do we get over that? And how do we get over ourselves, collectively? And do the things that we need to do, right? You cannot look at the Living Planet Report, you know, crashing biodiversity. I cannot go scuba diving and not see dead coral reefs. And we are, we are, each one of those leaders is looking at, at floods and hurricanes and fires, on their own territory. And we will not be able to look at ourselves in 20 years if we do not look back and say that we did something.
Seth Larson: Yes. Well said. All right, Tim, thank you so much for your time today and we will see how it goes.
Thanks again to Tim for joining the show today. These big UN Conferences are always defined by lofty goals and promises. So, I really appreciate him taking us further into the details of what all that means and what we are really hoping to see at COP29.
As he said, all of us can increasingly see the effects of climate change all around us. So, hopefully we see meaningful progress on the ground in Baku. Thanks for listening and together let us keep building a more sustainable future.