ForTheDoers Blog

COP29 must keep the climate action momentum going

Kari Kankaanpää 05 November 2024, 12:30 EET

It’s that time of year again. In the coming two weeks, delegates from world’s 200 nations will gather in COP29 in Azerbaijan to debate climate change. In times of rising geopolitical tensions, record-breaking temperatures and unprecedented natural disasters, the urgency of sustaining and accelerating climate action is more evident than ever. Although, for example, in Europe, the political focus has shifted towards industrial competitiveness, climate action must be seen as strengthening competitiveness. The cost of inaction is higher than the cost of taking action. 

In this blog, I explore three key areas that we believe can drive global climate efforts forward: maintaining momentum from COP28 to provide businesses with the predictability they need, expanding effective carbon pricing mechanisms, and increasing private finance with support for a broad array of net-zero technologies. 

Building on COP28 for greater business stability and climate progress 

COP28 in Dubai last year increased predictability of global policy, resulted in decisions on energy transition and sent a positive signal to investors. Countries agreed to transition away from fossil fuels in the energy system and pledged to triple the use of renewables and to double energy-efficiency levels. We need to keep this momentum going at COP29 and beyond. Hopefully, Baku does not become an “intermediate” event but continues the drive and lays the foundation for ambitious new commitments by countries during 2025 ahead of COP30 in Brazil. 

We at Fortum stand firmly behind the goals of the Paris Agreement. Business participation is important in ensuring the green transition in the long term. To play our part, companies require predictability and outlook on the global policy framework and global rules for the coming decades.  

Carbon pricing is key – Article 6 should be put into full operation 

Carbon pricing will play an indispensable role in the energy transition, as it offers a straightforward, cost-effective and technology-neutral solution for climate change mitigation. In addition to emission reductions, carbon pricing attracts new low-carbon investments; and by using carbon pricing revenues, it is possible to accelerate innovations and to support economic growth. 

Article 6 of the Paris Agreement to regulate carbon trading has been in the making for a long time. Operationalising Article 6 at COP29 could unlock a global carbon market that drives the energy transition and supports decarbonisation on an international scale. Currently about 23% of global greenhouse gas emissions are subject to a direct carbon price. Additional regions need to apply carbon pricing in order to have a more level playing field; this is also important from the European competitiveness point of view.   

Private finance is crucial for the green transition – all net-zero technologies should be eligible 

COP summits do not curb climate change. The practical mitigation actions take place through companies planning their investments, investor decisions, and consumer choices. It is imperative that climate goals look credible in the eyes of companies and investors and that climate finance criteria are not too restrictive. Only then will private investments be triggered.  

COP29 has been branded the “Finance COP” and is expected to result in a New Collective Quantitative Goal on financing for the post-2025 period. Public funding for climate action is inadequate, so the private sector’s involvement in this needs to be ramped up. The International Energy Agency (IEA) has estimated that 75% of investments should come from the private sector. 

The financing of mitigation measures should be based on technology neutrality and diversity and on project excellence. This applies both to international finance and for example upcoming negotiations on the EU multiannual finance framework (MFF). All relevant net-zero mitigation technologies, including nuclear and carbon capture, utilisation and storage (CCUS), should be utilised in the mitigation efforts and they should have fair access to financing. 

Setting the stage for future climate action

While Fortum won’t be on-site at COP29, we remain actively engaged through partnerships with industry associations and coalitions (e.g. Eurelectric and Climate Leadership Coalition) who are present in Baku. We look forward to following the outcomes closely, as they set the stage for future climate action that aligns with our commitment to a sustainable and resilient economy. 

What is COP? 

The United Nations (UN) Annual Climate Change Conference, known as COP, gathers global leaders and stakeholders to negotiate climate action. The negotiating parties include governments that have signed the UN Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and/​or the Paris Agreement. COP29 in Azerbaijan, from November 11-22, will convene government officials, civil society, private sectors, and media representatives to shape a unified approach toward tackling climate challenges. 

 Kari Kankaanpää in Dubai's COP28 summit in 2023.

 

Kari Kankaanpää

Director, Public Affairs and Climate Policy
Tel: +358 50 453 2330
kari [dot] t [dot] kankaanpaa [at] fortum [dot] com

Blog

ForTheDoers

Back to blogs frontpage