All eyes were on the G20 governments meeting in Rio this week. Many wanted a strong signal from G20 governments to provide a much needed boost to discussions in Baku. The lack of high-level leadership at COP29, the dispiriting slow pace of progress on addressing the big issues such as climate finance and an inert COP29 Presidency has been nothing short of exhausting.
It is fair to say, it is a mixed bag. On the one hand, it is positive to have the official communique affirm and reinforce the importance of the UAE consensus and Global Stock Take, which assesses progress on climate action and highlights what more needs to be done. The Leaders Declaration reinforces several important outcomes from the GST – such as the need to triple renewables, double energy efficiency and tackling deforestation, which is all welcome.
BUT there is one glaring exception - there is not one mention of transitioning away from fossil fuels. Reportedly, this is down to Saudi Arabia’s efforts to delete key paragraphs explicitly referencing fossil fuels phase out. The GST is very clear that the world must move away from fossil fuels. That any country can act as a spoiler on what has already been agreed undermines ambition and sends the wrong signal. With a new incoming Trump Presidency, we are likely to see further efforts to undermine the Global Stocktake. If there was ever a time to send a strong message that the world needs to phaseout from fossil fuels, it is now.
Yet, the only reference to fossil fuels was in relation to moving away from ‘inefficient’ fossil fuel subsidies. And as this is not defined, it leaves the door wide open for governments to continue investing in fossil fuels under the aegis that they are not ‘inefficient.’ It's semantic nonsense because the level of subsidies dwarfs what is invested in renewables - we need to switch that investment to more sustainable forms of energy. We know from recent research by ONE that countries spent US $2.7tn on domestic fossil fuel subsidies between 2010 and 2022, six times more than they committed for international climate finance. These subsidies, if redirected, could supercharge the unleashing of renewables and unlock millions in private investment.
The Leaders Declaration also failed to give a clear steer on what is needed to agree the New Collective Quantified Goal, which sets out the financing needed from developed countries to support developing countries. Discussions in Baku have been deadlocked on how much financing is required, who should pay who, who can access the funds and on what terms. A strong signal from the G20 countries could have reinforced the need to resolve these issues.
However, other than a platitudinous statement that the G20 looks forward to a successful outcome and their support to the COP29 presidency, there is no reference to the importance of reaching consensus on the big questions still outstanding. Developing countries are on the frontlines of climate impacts. The lack of movement on these issues could severely undermine trust between Global North and South on how these countries can be supported.
It is not all gloom and doom. It is positive to see that subnational development banks (SDB) were highlighted as part of a range of multilateral development banks that have an important role to play in mobilising revenues to meet climate and development goals. When so much of international public climate finance is restricted to the nation state, these banks are critical to ensure cities, states and regions– which is where most of climate implementation actually happens – are financed. For example, the Development Bank of Minas Gerais in Brazil was the first Brazilian public bank to issue sustainable bonds and has a framework for financing environmental or social projects.
Cities, states and regions will become more important than ever in keeping the spirit of the Paris Agreement alive. When President Trump first withdrew from the Paris Agreement, it was cities and states that kept pushing for higher climate ambition and action. States, such as California, Washington State and Maryland continued to meet their climate plans. This will be just as true, the second time around. Where national governments are falling backwards, local governments continue to showcase high ambition and climate leadership. Yet this level of government is not formally part of the discussions – this needs to change.
It is over to Baku now to resolve the big issues with the urgency they deserve. But it is difficult to be optimistic. With an incoming President Trump, and incumbents such as Argentinian President Milei this task will just get harder. But there is hope as cities, states and regions will continue the climate fight. On the frontlines of climate impact, and often the first responders, the spirit of Paris will continue through them.