What happened at COP30? The key points on cutting emissions, adapting to a warming world, and raising the finance to pay for it

24:48Amy Myers Jaffe:Is it actually becoming more appealing for the private sector to invest in low carbon energy in lower income countries around the world? I think what they need as a foundation is just basic fundamentals to protect their investments. So they need regulatory legal certainty. They need known and trusted partners. They need to cut down risk. So I think the appetite is there. It's just they need, where you're going to see investment is where you have all that full package together. And what's happening much more now than, say, 10 years ago is all the parties and the investment community are looking to fill those risk gaps.

25:34And that is what is exciting. So I think the next several years will be telling. But I think that message is also much clearer now. And I think the role of the Paris Agreement and the nationally determined contributions, those are three words nobody like outside the climate world would even pay attention to. But basically like national climate plans that have been proposed and reproposed, that drives this conversation about what are the enabling environments for investment. I can tell you like my first 15 years in the process, that's what the business community was talking about. And they weren't as willing to kind of be creative and think outside their comfort zone.

26:14But countries, all countries were kind of, well, you should just come and meet us where we are. And now there's much more of a convergence of the two worlds. So I think what's going to make it more accelerated in developing countries is going to be the recognition of what it takes to attract investment in a sustained manner. I think one big elephant in the room in this component is China. And China is fast moving to deploy. It's been doing this for decades, but deploying is clean energy around the world. We're seeing it even more. I think Pakistan is a great example of where solar energy is growing because it's getting solar panels from China extremely cheap.

26:55And, you know, this opens up a whole new conversation of how does the world decide about how much it wants to depend on China versus moving fast on clean energy? And, you know, we did see China step somewhat into the void of the U.S. at this COP. I would love to hear more from Simon and Lisa on that. But, you know, we also heard from some China officials there that they were disappointed that the US has stepped back. So it's not like China is trying to, you know, take over everything the US was doing in terms of global leadership. But they've, you know, so that's one big trend that I'm seeing.

27:32And then, you know, with the US being the world's biggest producer of oil and gas, you know, there's really a stark choice right there.

27:38Amy Myers Jaffe:Yeah, great point. So what is your sense of it, Simon? How did you see the role of China at COP30? Yeah, it's really fascinating. So my colleague, Annika Patel, our China analyst, basically spent the first week in Belém camped out in the China pavilion. I mean, not literally, but more or less. And she was really just like really closely watching for the signals, you know, how are they talking about this? There were, you know, there were so many newspaper articles in the run up to COP about, you know, is China going to step into a leadership role now the US is stepping back um you know is is it going to be about china cooperating with the global south and i mean it's quite fascinating in a way because you know that sort of climate finance conversation you know mitigation finance particularly i think people say that and then you immediately think oh well this is about the west you know giving money to poor countries to invest in renewables or whatever and and sure you know like actually to the point about is this a trade-off with adaptation finance, EU Climate Commissioner Hoekstra said very explicitly after the summit, sure, we're going to raise adaptation finance, but that's not going to be a bigger bill for EU taxpayers.

28:46We're just going to basically put money that was going towards other things, towards adaptation instead. But then, you know, so there's that going on and, you know, this sort of, you know, lack of sufficient climate finance from developed countries. But then on the other hand, And you've got this, as Amy says, this huge kind of surge of clean energy exports from China. We published some really fascinating analysis earlier in the year looking at exactly where those exports are going. And I can tell you it's literally all around the world, but particularly big, big developing countries, Brazil, Malaysia, Pakistan, you mentioned already.

29:23Saudi Arabia is a fascinating one, not just solar panels, but huge investments by Chinese firms in solar panel factories. because Saudi Arabia burns tons of oil to generate electricity and they've worked out that solar is so cheap they might as well generate solar power and then they can sell more of the oil overseas, right? So, I mean, you know, that is like such a, you know, so sort of regardless of what China is actually saying at the COP, you know, how much of a leadership role, you know. So to be clear, Annika said she was watching very carefully and they deliberately avoided saying anything about leadership.

29:57The people talking about Chinese leadership in the China Pavilion were not Chinese. There were other people like Selwyn Hart, one of the kind of UN climate people, talking about Chinese leadership. The Chinese themselves didn't want to talk about that. But then what they're doing on the ground, you know, no matter what they're doing in the negotiating halls, what they're doing on the ground is actually making already a really big difference to emissions around the world.

30:18Amy Myers Jaffe:Yeah, that is really fascinating. And actually, as you say, Saudi Arabia, really fascinating example. I watched on YouTube recently, a speech that was by Saudi Arabia's energy minister at their future investment forum in Riyadh two or three weeks ago. And the whole subject that he wanted to talk about was power, and in particular how Saudi Arabia had this incredible low-cost power generation. And he highlighted low-cost wind and low-cost solar as two of the prime examples of that. So as you say, it's really interesting the way that the transition to lower carbon energy is cropping up in perhaps some unexpected parts of the world.

30:54Amy Myers Jaffe:I mean, to your point about China and talking about Chinese leadership, I mean, you were saying that China didn't talk about being a leader. China almost talked in the opposite. I saw a statement from someone saying China does not want to be a leader, doesn't want to go ahead of everybody else in cutting emissions. And of course, anytime anyone talks about Chinese climate leadership, you always get the pushback in terms of, well, look how much new coal-fired generation capacity they're building. Was it 48 gigawatts? I think they added last year and so on. So put it this way, it's a mixed picture, is it not, that in some respects, China is advancing a transition to a low carbon future.

31:35Amy Myers Jaffe:In some respects, it absolutely isn't. I don't know. Lisa, what do you think? Well, I just keep looking at the data year after year, see that the United States is number two to China in global energy transition investment. And then you look at the list and see who's next. So they are leaders depending on the metrics. But I agree, it's a very complex situation. And I still hold hope, you know, especially driven by the subnational leaders that represent, you know, much more than half of the U.S. GDP and more than half of the U.S. population. You know, they were there as well, representing what they're doing on the ground in their states and jurisdictions.

32:15You know, we're not out of it. You know, the U.S. is in the game.

32:18Amy Myers Jaffe:So, Simon, I want to go back to something else you were talking about. You talked about the language around fossil fuels and transitioning away from fossil fuels. This clearly was a very contentious issue. As you were saying, Lisa, in that last week of the talks in particular, there was a big push from a large number of countries. I think it was more than 80 countries that wanted a commitment to saying something about transitioning away from fossil fuels in the final statement. In the end, that didn't appear there after the strong resistance from a number of other countries to putting that in.

32:51Amy Myers Jaffe:Does this whole debate matter at all, do you think? I mean, I think the fact that there was no language on transitioning away from fossil fuels was taken by some people to be evidence of another failure at COP30. Simon, what do you think? Well, so very quickly to recap for your listeners, in case they're not up on where this strange phrase transitioning away from fossil fuels actually came from. Lisa, you mentioned earlier on about the global stock take. This is under the Paris Agreement that every five years, we collectively have a moment to reflect and see how we're doing. And that concluded in Dubai at COP28 two years ago.

33:27One of the things that they agreed coming out of that stock take was this phrase that everyone was meant to contribute to a global transition away from fossil fuels amongst a list of other things like tripling renewables and so on. And that in itself had been like hard fought over because lots of countries wanted, you know, phase out of fossil fuels. Then other people said, how about phase down? And then they, you know, they went off into a back room somewhere and someone smart came up with a slightly different word that everyone could agree to. So that's where transition away came from. And everyone agreed to it, right?

34:00It was in Dubai, it was in the UAE, it's a petro state, people didn't necessarily expect that to happen. So that was seen as quite a big moment, a big breakthrough. And then since then, we've had these kind of repeated flare ups of, can we agree to say again what we said back then two years ago? And so to your question, does that matter? I mean, I guess people see the fact that countries that signed up to that two years ago are no longer willing to say it again. And they say, well, that's backsliding. What's changed? Is it the geopolitics? Is it the state of the energy transition? What is it that's meaning that they're no longer willing to restate that?

34:37But this wasn't something that was meant to be on the agenda, this COP. It was just, as I mentioned, I said, lots of countries saying, guys, we really need to get with the programme. This is way off track. And hello, fossil fuels are by far the biggest source of emissions. So we really ought to talk about it again. I mean, it doesn't matter. it. You know, I guess it comes back to that thing about you can't negotiate in the blue zone at the COP. You can't negotiate away coal-fired power stations in China. You can't negotiate away, you know, petrol cars in the States. So I don't know whether it really matters.

35:14I guess what we will be watching over the next, you know, the months ahead is what happens now, because, you know, there wasn't an agreement to have that as part of the formal legal text that came out of the COP. But the Brazilian COP presidency did say that they would launch some sort of process, some sort of way to develop a roadmap away from fossil fuels with, I guess, a coalition of the willing. What exactly that looks like, what it amounts to, I don't know, but we will find out soon, I suppose. Yeah, I think it matters a lot, actually, just to provide a different opinion. I think it matters what the words that they include and whether or not they include fossil fuels, I think it was very significant two years ago.

35:54I remember talking with you about this two years ago, Ed, and I thought it was a big deal then. And what I'm about to say is weird at a very high level, but followers of the climate process will understand it. At least there wasn't a successful attempt to add some sort of acknowledging the role of fossil fuels into the future. Things could have been worse, I guess is what I'm saying. And the fact that it wasn't included, you know, obviously isn't what a lot of people wanted. But the fact that there wasn't some additional language that really tried to reverse what was agreed to in Dubai, I think is a success insofar as finishing the race is a success to go back to that metaphor.

36:32I think in the world we're living in, it is not outside the realm of possibility that some actors, whether it's the Saudis or, you know, if the Trump administration were to have been there, I would have guessed would have definitely tried to insert some line about how fossil fuels are important to humanity going forward. That's what they tried to do the first time around with the panel discussion they held about the importance of coal. So I think that's a success insofar as it wasn't something positive about fossil fuels wasn't included. And I think that's significant.

37:05Amy Myers Jaffe:Right. So another issue that could be read in a couple of different ways, I think, is this question of the NDCs that Lisa mentioned. So these new nationally determined contributions, the commitments from different countries to cut their emissions, that was meant to be originally the key focus for this COP was an update of every country's NDC, making it more ambitious to put the world on track for an emissions pathway that would lead to achieving the Paris Goals for Limiting Global Warming. When you look at what actually came out, both in reviews of existing NDCs and the new commitments that were made, there were quite a lot of new commitments.

37:50Amy Myers Jaffe:I think there were 86 new NDCs were out there, weren't there? No, we're up to something more like 120 something by now. I think a lot came in really late. Oh, wow. Okay, right, right. Okay, so a lot more NDCs were out there. But it is the case, I think I'm right in saying this, not like that, there is not a single major economy that is on course to meet its goals under its NDC for reducing emissions by 2030. And even if you take all these NDCs, and I think this probably includes all the new ones you're talking about, Simon, there is still a trajectory for global emissions that is not on track to meet the goals of the Paris Agreement, even after all these new ndc's have been published is that right yeah that's 100 right is i don't know if it's exactly 15 but it's of that order i mean i guess what i would say is that during the the cop the the un climate body published an update on their assessment of where these new pledges gets us and they published a really great graph with that i think i'd encourage your listeners to find it um it was shared on social media by simon steel and it basically shows you know because sure like only cutting emissions 15 % by 2035 or 12%, whatever it is.

39:05That sounds pretty bad. You know, we're still pretty much on track for about two and a half degrees of warming, give or take, depending on who you ask. But the reason this graph was, I think, really good was that it showed where we were headed 10 years ago. And effectively, you know, you weren't able to see this if you're just listening, but we had this graph going way up into the sky and it was heading for like four degrees, three and a half, four degrees. and now we've got this graph which is like sure flattening off starting to go down a bit now not going down nearly as steep as we would need to if we wanted to you know get back to one and a half degrees of warming by the end of the century but significant progress nonetheless and i would say i mean of course not all of those policies will be enacted but there'll be new things that we can't think about you know and if we really were to scale enough to reduce our emissions globally by 10 to 15 percent in the next decade, we would have dynamic impacts that we can't forecast now.

40:00So that assumes a very static snapshot in time view. And I think the key thing is that we keep moving forward. And as you've said repeatedly, Ed, these technologies in many cases are less expensive than they were five or 10 years ago. They're much more readily available and they are deployable and understood by the marketplace. And so we're in a much different position than we were 10 years ago. And I can't rattle off necessarily all the stats that I heard over the two weeks, but that's certainly one that Simon talked about. In 10 years, we did make a difference. And it wasn't an insignificant difference.

40:39It was a big difference. But then there are many other metrics we can look at. And it's because we are driving in this direction. We have an annual accountability in a range of forums, but in particular at the COP where people come and say, this is where I'm at and this is where my problems are and this is where I need help. And, you know, we need that transparency over time. So I think that's what's important about this. And it's not just large emitters. It is potentially any country that wants to have a voice. And we don't have another setting where that can occur.

41:11Amy Myers Jaffe:Right. So we've talked about adaptation. We've talked about climate finance. We've talked about the NDCs, about their statement on fossil fuels. Interested in kind of final thoughts, how did this leave you feeling about the effort on climate change overall and the world's ability to address this? We're going to be back here again, I'm sure it'd be great to talk to all of you again a year from now after COP31, which is going to be in Turkey. How hopeful are you that the world is actually making any real progress on this issue? Amy, what are your thoughts? I am going back to the running metaphor and Lisa's comment that this is a marathon.

41:52You know, when you run a marathon, it's not like you run every single mile at the exact same pace. So I don't know where we're at in the marathon, but we're not done. And, you know, we finished this tough round. And I think it's an important realignment and readjustment to the political realities. And I like to think in stark terms. So on a scale of one to 10, how hopeful am I? I'm not six or seven, maybe five or six, somewhere between five and seven. That's where I would put my final answer.

42:21Amy Myers Jaffe:Yeah, that's pretty good. That's, you know, I think greater than 50%. I don't hate those odds. Simon, what do you think? What's your score? I mean, I think I'm in quite a similar place to Amy. I mean, listen, we should be really clear about this. Two and a half degrees of warming is really, really bad, right? We're already seeing pretty disastrous impacts around the world in terms of extreme weather events and so on at nearly one and a half degrees. So we're not heading to a good place, but we're, you know, genuinely we're doing a lot better than we could have been. And there's always the potential to keep going further, right?

42:55It's not over. We're not doomed to two and a half degrees. We can keep making progress. I think next year is going to be fascinating because there's this very complicated arrangement between Turkey and Australia, who both wanted to host the COP. It's going to be in Turkey, but Australia is going to be president of negotiations. Although technically, I believe Turkey is still going to be sort of holding the gavel, you know, the literal gavel that they bring down at the end of the summit. It'll be fascinating to watch. Also really interesting is that Australia was one of the countries pushing for a roadblock away from fossil fuels.

43:29And I understand this is, you know, this isn't completely confirmed, but I'm pretty sure that Turkey was on a list that hasn't yet been made public of countries that were opposing a roadmap away from fossil fuels. So just right there off the bat, you can see that there's potential for complexity next year. But you know, this is messy, as Lisa said, it's not linear. So yeah, it's always fascinating. And I guess that's, you know, why it's a great area to be working and writing about. Well, I would just say, I mean, the gravity of the situation definitely weighs on me. I just got back today. So the day that we're recording this, so it's still very much front of mind, but the process showed persistence and resiliency.

44:08And it's an institution, right? It's not the goal in and of itself. It's a facilitating process to help governments and people tackle an extremely complex set of challenges. So I think I'm glad, as Amy said, we didn't see any significant backsliding and we're just going to have to keep focused on driving ahead.

44:30Amy Myers Jaffe:Yeah, and certainly it's going to be great to keep talking to all and to see how much progress, what progress is made when we come to the next COP and beyond. Many thanks, Amy. You're very welcome. Thanks again for having me on. Many thanks, Lisa. Thank you. Many thanks, Simon. Thanks. Great to talk to you all. Yeah, it's been great talking to you all. So we were talking in that conversation about climate finance and the need to mobilize capital to pay for climate adaptation and emissions reduction in low and middle income countries. To dig into that subject in more detail, I talked to Jan Piero Natchi, who is the Managing Director for Climate Strategy and Delivery at the European Bank for Reconstruction and Development, the EBRD.

45:14Amy Myers Jaffe:Hello, Jan Piero. Welcome to the show. Good afternoon. How are you? Yeah, very good. Thanks. Very good. Great to see you. So you've just been at COP30. Do you want to just tell us a little bit about your general impressions of the conference? I've seen contrasting views about COP30. I saw Simon Steele, the executive secretary of the UNFCCC, saying that climate cooperation is alive and kicking, keeping humanity in the fight for a livable planet. That was his quote. But I've also seen people describe the talks as a complete failure that didn't really make any real progress on all the big issues relating to climate change that they were supposed to be tackling.

45:52Amy Myers Jaffe:What's your sense of it? Well, I would distinguish, I would say, from the negotiations, the formal negotiations and the rest of the event. Maybe let me start from the latter component, because, you know, it was a very well attended COP with many people from the financial sector, from, of course, the country representation, country delegates, but also civil society. You know, I haven't seen a COP so well contributed and participated as this one. The demonstration, for example, outside were very welcomed by the participants because they brought a positive energy and also managed to bring to the attention of the participants what the real issues are.

46:34Amy Myers Jaffe:and verified to be in Belém. I guess everybody, again, we're looking into Belém with a mix of curiosity and perhaps also trying to understand what the city would look like and how the whole setting would look like. And okay, despite some bit of troubles at the beginning, and we know about the fire, but I must say that first of all, the city itself was very well prepared, very welcoming. It was a very positive environment within and outside the COP. So that part, I think, was very positive. A lot of people, a lot of interactions at all levels. When it comes to the negotiations, I think both sides have a point, because I believe Simon is right.

47:13Amy Myers Jaffe:Ultimately, an outcome has been delivered. Certainly a few important topics were high in the agenda. Of course, the launch of the Tropical Forever Forestry Fund, which is, I think, an important precedent in terms of rewarding environmental services. Equally, the final outcome, while perhaps a bit below expectation, particularly when it comes to fossil fuel exit, but at the same time clearly advanced the awareness and the importance of looking at pathways for exiting fossil fuel. So the fact that many, many countries ultimately pushed in this direction I think was a positive signal and to an extent unprecedented.

47:54Amy Myers Jaffe:It's not the first time that it's been talked about, but the first time there was such a coalition of countries from advanced countries, from developing countries. So that coalition, in my view, is a positive signal, but also would represent the core of interactions and convergence, which, in my view, provides a lot of hopes for the forthcoming COP, but also between now and COP31. The other positive signal, I believe, was a strong emphasis on adaptation. This was a topic that was discussed across multiple conversations, multiple events. And clearly, this aim to increase substantial adaptation finance was very central in many conversations.

48:33Amy Myers Jaffe:And I can tell you that was also the pressure that SMDBs were being exposed to, because clearly, there is a significant ask for MDBs to step up on adaptation finance. Yeah, so MDBs, for people who might not know, multilateral development banks, so that is including the EBRD. Yeah, let's talk a little bit about that adaptation finance then. So you had a statement on that. As you say, it does seem to be an area where a lot of people are calling for these multilateral development banks to do more, not least because adaptation finance is, according to people I talk to in the private sector, very often something the private sector finds really difficult to do.

49:13Amy Myers Jaffe:it's hard to design and develop projects that have an obvious commercial return to them which is the kind of thing obviously that a private sector bank likes to finance is that right do you think is that why there is a particular role for these mdbs in that area of adaptation i think there is and i think we've been quite clear both in terms of activity and outcomes but also in terms of signals that we provided you know before and during the cop in terms of the concrete outcomes. You may have seen that the MDB, the Multilateral Development Banks, we issued a statement on the Monday, on the 10th of November, where we ultimately reiterated our commitments to do more adaptation.

49:56Amy Myers Jaffe:We shared some of the climate finance results of 2024. We showed that strong progress in the provision of adaptation finance, particularly towards low and middle income countries. But it's true that while the economic case for adaptation investment is increasingly clear, the commercial case is more difficult to make. So that's an area where we need to work more substantially. And how do you interpret this increased focus on adaptation then? Does it reflect a recognition that the goals of the Paris Agreement are not going to be met, that actually global warming is going to exceed 2 degrees C? The goal of the Paris Agreement was to limit it to well below two degrees.

50:38Amy Myers Jaffe:And so if that is the case, if we are on course for significant warming still to come, we are just going to have to adapt to that. And that's why, let's say, there is this increased demand for adaptation finance. Well, I would not put necessarily the question in this way, because it is not a zero-sum game. At the end of the day, we need to do as much as we can to limit the emissions of greenhouse gases, at the same time, indeed, invest in preparing the cities, the businesses, the infrastructure we have to deal with global warming. So the way I see it, first of all, yes, there is an issue in terms of maintaining the temperature goal well below 2 degrees.

51:25Amy Myers Jaffe:We know that much more needs to be done. There are some positive signs. For example, the very substantial growing of renewable energy capacity that's been installed in the last few years, last year in particular. And that trend is not stopping. So that's a positive sign. It's true that, you know, clearly the emissions are not declining to the extent that we want, but we should continue to work in that direction. And as I said before, the signal about, you know, the fossil fuel pathway, in my view, is a positive one that, you know, will probably continue to coalesce interests from many, many countries.

52:02Amy Myers Jaffe:Now, what I would like also to reflect, because, you know, clearly Paris Agreement has some objectives, but as a framework, you know, continues to represent a valid operational and policy framework, because ultimately push the responsibility on countries, but also provide the mechanisms for trying to support, you know, international cooperation, for example, including in terms of the development of the carbon markets. So the Paris Agreement per se, I think, has still the structure and the type of component that can deliver. Clearly, it's about the willingness of individual countries and alliance of countries to ultimately act upon it.

52:43Amy Myers Jaffe:And when it comes to adaptation finance, certainly the need to invest more is just not a matter of finance. It's also a matter of regulation. It's a matter of planning. but there's also an element of, A, improved risk assessment tools and models that are recognized by the market so that the whole financial sector can recalibrate its risk analysis to reflect physical chemistry. But there's also an element of improving the way regulation works, standards and planning. So it's not only a matter of investment, it's also a matter of an entire system, which is still behind. Because if we look at adaptation, it's probably where mitigation was, I don't know, 10 years ago, right, in terms of the understanding of the implications and how ultimately policy, regulation and market mechanisms can play a role in shifting the direction of travel.

53:36Amy Myers Jaffe:Yeah, no, that's a really interesting point. So you mentioned COP31 earlier. When we look ahead to COP31 a year from now, what do you think are going to be the crucial items on the agenda then? And what do you think is going to be important for the global effort on climate change to address between now and then? So three main output of COP30, you know, the report of the Circle of Finance Minister, the report of the High Level Expert Group on Climate Finance and the Baku to Belém roadmap. All these three reports, they do three things. You know, first of all, they define the direction of travel in terms of climate finance in a much more rigorous ways than in the past.

54:22Amy Myers Jaffe:Second, they give clear signals where the money needs to be deployed. And third, they speak to the private sector. Not only, they speak to the, of course, the policy makers, but they also speak to the private sector. And this particular last point is particularly important in my view because we see an appetite for private investors to have a clear direction of travel and the clear identification of which investments are needed and when. The role that these three reports together will play, in my view, is going to be quite substantial and we'll see things happening in the next year. So I really hope that the Turkish and Australian authorities are going to really build on these three reports and focus on the implementation.

55:06Amy Myers Jaffe:And the second reason of mild optimism is also indeed goes into the quite unusual process that is going to happen in COP31 because it's hosted by Turkey, but at the same time the negotiation is going to be led by Australia. And the combined convening power of Turkey and Australia, in my view, can be extremely powerful. You have a country that speaks to the emerging economies that is integrated with many processes. Then you have Australia, which is, of course, an advanced economy, but also with a strong exposure, direct or indirect, to the effect of climate change. So I hope that the combination of the leadership of, you know, Australian authorities, Turkish authorities will ultimately create that momentum to address some of the elements that have emerged at COP30 in Belém, but haven't been fully materialized.

56:01Amy Myers Jaffe:Yes, that's a great point. It certainly is going to be interesting to see how that unusual structure plays out a year from now. And I hope you'll come back on the Energy Gang to talk to us about it then and talk about what progress has been made in climate finance. For now, though, Jean-Pierre Nardy, thanks very much indeed. Great talking to you. Thank you very much. All the best.

56:23Amy Myers Jaffe:And we're going to leave it there. Thanks again to Amy Harder, Simon Evans and Lisa Jacobson. Thanks to our producers, Stuart Duffy, Toby Biggins-Gilchrist and Dan Cottrell. And above all, many thanks to all of you for listening. We really do value your feedback, so please keep that coming. And we'll be back soon with all the latest news and views on the future of energy. Until then, goodbye. you