COP29 – a conference of unity or divide?

Introduction

Every year, a COP (Conference of Parties) gathering sets out the global stance on climate change. The Parties’ environmental progress is reviewed and examined. However, COP29 threatens the stability of this annual occurrence.

COP29 was hosted in Azerbaijan, and officially concluded on the 22nd of November 2024[1]. One of the main objectives was to promote and support the green energy transition. Indeed, there were successful steps taken to achieve this. Notably, the UK, Colombia and New Zealand joining COFFIS (Coalition on Phasing Out Fossil Fuel Incentives)[2]. However, these accomplishments were largely overshadowed by the accompanying walkouts, protests and controversy. A rising theme seemed to emerge of division and disagreement. Such tension is illustrated on the issues of a voluntary carbon market, and the NCQG.

The issues

A voluntary carbon market

The creation of a global carbon market was quickly agreed to[3]. Carbon credits can now be traded internationally; each credit granted when one tonne of carbon has been removed from the atmosphere[4]. Yet, the decision was deceptively simple. Non-profits criticised its due process[5]. The supervisory body prepared guidelines before COP29, in preparation for the introduction of Article 6.2 and 6.4[6]. Ordinarily, this would have been presented at COP. Instead, it was directly adopted. The main issue is that this method has potentially produced guidelines that are not strict enough to hold Parties to high standards[7]. One can speculate that such a result may lead to a lack of regulation of the new carbon market, and could even undermine the legitimacy of COP29 overall.

The legitimacy argument becomes even more plausible when looking at the feasibility of a carbon market. COP leaders view the method as the most effective means to reduce global greenhouse emissions[8]. Yet, this is brought into question when the fact that ‘less than 16% of carbon credits issued represent real emissions reductions’[9] is considered. How, then, can the new market be effective if its origin is so unstable? Unfortunately, only time will tell. Even more significant is what these uncertainties show about the growing questions over COP, and the effectivity of its methods at uniting countries on climate change.

The New Collective Quantified Goal (NCQG)

A more controversial topic of COP29 is the NCQG. The goal determines the scope of funding available for developing countries to use towards developing a sustainable economy[10]. The cost falls upon developed countries, and is based on the idea that developing countries should not suffer the impacts of accelerated climate change caused by developed countries.

The NCQG issue loomed over the entirety of the conference. On the final day, an annual $300 billion was announced[11]. A disappointing conclusion indeed. Widely, $1.3 trillion was considered a sufficient balance[12]. Perhaps the quota was an attempt to appear unified – a strategy that has proven counterproductive so far.

The UK context

Despite the growing contention amongst Parties, the UK has evidently positioned itself as a driving force in the global fight against climate change. One of the UK’s defining moments at COP29 was Starmer’s announcement of a commitment to cut carbon emissions by 81% by 2035[13]. Consider this alongside the Energy Secretary’s confirmation of Labour spending £11.6 billion on climate finance[14], as well as the government’s ‘Principles for voluntary carbon and nature market integrity’ that ranges from a focus on Greenwashing, to the use of high integrity carbon credits[15].

Collectively, these developments signal an increasing government pressure for sustainable practice. Considering that the UK met the carbon emission reduction goal set out in the Paris Agreement at COP21[16], it is reasonable to predict that they will push to meet the COP29 targets. Therefore, contrary to other Parties questioning the legitimacy of COP, the UK remain committed to COP goals.

The impact on businesses

How will companies operating in the EU and UK be affected? Across Europe, governments are increasingly using legislation as a means to achieve their climate goals. The EU Regulation (EU/2024/1787)[17], for example, has recently been introduced to reduce methane emissions in the energy sector.

For UK companies operating across Europe, they will face the additional challenge of having to comply with two sets of regulations. Law firms will, therefore, need to remain vigilant and aware of relevant regulations. ESG and Energy specialists will, consequently, prove essential. Commentators have also predicted that national ambitions are likely to drive the creation of new markets and business opportunities. For example, the UK has reaffirmed its £21.7 billion commitment to carbon capture and storage projects[18]. Therefore, the UK’s ESG landscape will be subject to an onslaught of change.

Conclusion

The tensions raised in COP29, although significant, should not overshadow the climate goals that have been set. Although Donald Trump poses a risk[19], there is a general governmental push by governments to reduce their negative environmental impact. COP29 strengthens this movement; the impacts already being felt by businesses globally.

[1] ‘What is COP29?’ <https://cop29.az/en/conference/what-is-cop29> accessed 30 November 2024.

[2] P. Jordan and J. Bransgrove, ‘What were the outcomes at COP29?’ Charles Stanley (26 November 2024).

[3] P. Greenfield, ‘COP29’s new carbon market rules offer hope after scandal and deadlock’ The Guardian (24 November 2024).

[4] ibid.

[5] S. Mundy, ‘COP29’s carbon trading deal: quick win or damaging precedent?’ Financial Times (13 November 2024).

[6] ibid.

[7] ibid.

[8] ‘COP29: What’s happened so far?’ Travers Smith (19 November 2024).

[9] P. Greenfield, ‘COP29’s new carbon market rules offer hope after scandal and deadlock’ The Guardian (24 November 2024).

[10] S. Goldberg, J. Bille and M. Azhar, ‘Inside COP29: Key themes from week one’ Herbert Smith Freehills (18 November 2024).

[11] V. Seabrook, ‘COP29 strikes last ditch deal on funding for climate measures in vulnerable countries’ Sky News (24 November 2024).

[12] ibid.

[13] R. Patel, ‘COP29: What can we expect?’ BCLP (07 November 2024).

[14] ibid.

[15] Department for Energy Security & Net Zero, Principles for voluntary carbon and nature market integrity (15 November 2024).

[16] M. Lucibella, ‘Most countries struggle to meet climate pledges from 2009’ UCL (16 April 2024) <https://www.ucl.ac.uk/news/2024/apr/most-countries-struggle-meet-climate-pledges-2009> accessed 30 November 2024.

[17] Council Regulation (EU) 2024/1787 of 13 June 2024 on the reduction of methane emissions in the energy sector [2024] OJ L2024/1787.

[18] ‘UK Commits £21.7 Billion to Carbon Capture Despite Project Delays and Rising Costs’ ESG News (07 October 2024).

[19] B. Eichengreen, ‘Trump would pull out of Paris climate treaty again – and Harris faces tough choices’ The Guardian (13 August 2024).