COP 29

The 29th Conference of the Parties (COP29) will take place in Azerbaijan next month, November 11th and 22nd 2024. For 2 weeks, delegates from nations across the globe will convene to discuss the next steps in the ongoing fight against  climate change and pretend that it is still possible to keep global warming under 1.5 degrees Celsius. It’s not. We are sitting on a melting ice cube.

Once more the climate three aims have officially been outlined as COP29’s ‘Framework for Action. These are:

• Reduce emissions to keep global warming under 1.5 degrees, while leaving no one behind.
• Inclusive process for inclusive outcomes.
• Enhance ambition and enable action.

Nice words, but in truth since the signing of the Paris Climate Accord, global greenhouse gas emissions have continued to rise. We are further from net zero emissions than we were in 2015.  ‘While leaving no one behind’ is a nice thought and signals an interest in ensuring that developing nations and vulnerable communities are included in the discussions and subsequent actions. This is the second aim, to ensure an inclusive process. Enhancing ambition and enabling action. Increasing the ambition is about increasing the pledges that the nations have made.

Under the Paris Agreement China has only agreed to stop growing their CO2 emissions by 2030, and India made no pledged reductions. At COP 26 in 2021 India signed an agreement to reduce coal and increase its renewable energy generating capacity to 500 gigawatts by 2030 with the goal of reaching net-zero CO2 equivalent emissions by 2070. However, In November 2023 India approved a plan that roughly doubled coal production, reaching 1.5 billion tons by 2030 and included more than quadrupling its underground coal production by 2030.  

Meanwhile the news from China is no better. In fall 2023 China announced that coal-fired power capacity would rise by more than 200 Gigawatts by 2030. That increase is equivalent to the entire energy production of Canada. Let’s be honest here despite promises made year after year the CO2 emissions of the planet have grown at a compounded annual rate of 1.8% per year since 1990. Our situation is worse not better, yet, the growth in fossil fuel emissions may be slowing.

Ahead of the meeting Azerbaijan announced the Climate Finance Action Fund (CFAF) to invest in climate action in the developing world. I believe that is what enabling action is about providing money.  CFAF will be capitalized with contributions from fossil fuel producing countries and companies across oil, gas and coal, and Azerbaijan will be a founding contributor. Members will commit to transfer annual contributions as a fixed-sum or based on volume of production.

The United States is an oil and gas producing country. However, we may also be moving towards financial disaster. This month it was reported that the federal budget deficit for fiscal 2024 came in at $1.83 trillion that will have to be funded by selling treasury bonds. That’s 13% larger than the year before adjusting for timing shifts in outlays. It also comes despite an 11%, or $479 billion, increase in receipts for the fiscal year that ended September 30, 2024. Total government revenue was $4.92 trillion, individual income taxes rose 11% or $249 billion. Corporate income taxes rose 26% or $109 billion.

The deficit ought to decline when revenues rise significantly, but the problem is that spending also rose 11% by $699 billion to $6.75 trillion. Social Security rose 8% and Medicare rose 9%. Interest payments on the national debt are now larger at $950 billion than the entire defense budget of $826 billion or Medicare $869 billion. Interest payments accounted for 14% of the budget. The total national debt is 97% of GDP. 

The fiscal path of the Unite States is unsustainable and limits our nation’s ability to maintain a world leadership position (which ensures our ability to sell bonds). Worse than that, it limits our ability to finance climate adaptation in our own country, continue paying full social security benefits and providing health benefits through Medicare without rationing care and contribute to CFAF funding. In August, Fitch downgraded the U.S. government debt, citing "steady deterioration in standards of governance" on "fiscal and debt matters." 

The COP29 leadership states that they are working with a ‘broad range of international stakeholders’ to ensure that all perspectives are considered and that the outcomes of the conference are based on ‘shared solutions.’  I have no idea if this means that there will be renewed effort to move the needle or that world events and the forming of global axis will overshadow these urgent goals. We are sitting on a melting ice cube and we just keep talking..