Important decisions face Australia’s government, opposition and political participants at the conclusion of the 29th conference of the parties (COP) to the UN Framework Convention on Climate Change in Baku (Azerbaijan) on Sunday said the Carbon Market Institute (CMI) today.
“COP29 was imperfect but remarkably, given the global political context, managed achievements including to lay out goals for decarbonisation and resilience investments in developing nations. Notably, after almost 10 years of negotiations, parties delivered Article 6 resolution, agreeing mechanisms for international cooperation through country to country carbon credit trading, new UN backed international carbon market and non-market initiatives,“ said John Connor, CMI CEO.
“To avoid spiralling climate costs companies and countries like Australia now can and must scale up policies and investments in climate solutions through these international carbon market frameworks both globally and at home. When operationalised, these carbon markets can help countries implementation of climate plans (NDCs) faster, and cheaper, driving down emissions”
“There are now important decisions to be made on how Australia, one of the countries most exposed to costly climate extremes, will leverage these frameworks and show leadership in emission reduction ambition, climate investments and carbon markets,” said Connor.
Countries were once again reminded, this time by COP30 hosts Brazil, that new 2035 targets should be shared by February next year. The UK joined Brazil and others in sharing its target of 81% reduction off 1990 levels, or 78% reduction off 2005 levels, the baseline Australia uses.
“CMI supports a 2035 target of at least 70% reduction for Australia which will require the broadening and deepening of policy including the Safeguard Mechanism. However, business face some investment uncertainty with the Coalition yet to clarify their approach to this policy, the second biggest driver of reductions after renewable energy targets.”
“Australia will also need to decide whether it will engage in or cede influence in international cooperation through carbon markets just as interest and investment steps up in Asia and the Pacific.”
“Australia played a lead role in negotiations supporting transparency and accountability in the UN crediting frameworks but now lacks a clear strategy of engagement. At COP29 Australia announced it was repurposing $50m of funds from the previous government’s Indo Pacific Carbon Offsetting Scheme towards Pacific renewable energy and policy coordination.
Countries like Singapore and Japan are stepping up their engagement in international carbon markets supporting investment in the Pacific and elsewhere. Asian carbon compliance frameworks are growing, ASEAN nations seeking an Common Carbon Framework and Pacific countries are seeking to maximise benefits and manage risks from these markets. Fiji launched its Carbon Market Strategy Roadmap at COP29.
“Coherent climate policies with conviction need to have clarity on, and funding for, the role carbon markets can funnel investment at scale into climate solutions here and internationally, with suggestions set out in our Carbon Market Strategy Policy Brief,” said Connor.
How Australia and other countries scale up international financing and investment in developing nations will be crucial after agreement at COP29 on a “New Collective Quantifiable Goal (NCQG)” on finance even though many found the target inadequate. This was the main task for COP29 and Minister Bowen co-chaired the finance talks. It was agreed that developed countries will at least triple fund mobilisation from a wide variety of public and private sources to $300 billion per year by 2035 and for “all actors” to scale up funds from “all public and private sources” to $1.3 trillion a year.
“COP29 failed to land other decisions on issues such as how to carry forward COP28 global stocktake agreements to transition away from fossil fuels and on hosting COP31 (which Australia and the Pacific are seeking to co-host).”
“COP29 was carried out in the shadow of the election of President Trump and, while imperfect, was productive in key areas. It now puts the spotlight on some key decisions to be made in Australia and elsewhere which will need great clarity and conviction.”
“Climate COPs are the Olympics of diplomacy where one of 196 nations can block progress. While many are keen to assign the COP and other multilateral processes to irrelevance, they, like the Olympics, remain an important moment for countries to gather for strong individual and team performances.”
“Team Australia, whatever its political makeup after coming elections, will need to lift its climate policy and investment game if we are to help in global efforts to minimise the climbing costs of climate change through urgent industrial decarbonisation and scaling up other solutions in energy, transport and land sectors,” concluded Connor
CMI will be hosting a special COP29 Symposium in Sydney on 5 December 2024. CMI’s next International Update will detail progress made at COP29 and other advances in international voluntary carbon markets and corporate disclosure standards.
