COP29’s trillion-dollar net zero battle: Needs, wants, and reality of global energy scene run by oil & gas

November 18, 2024, by Melisa Čavčić

Many proponents of taking a stronger stance on global climate action are hoping for a pivotal shift in the final text of the 29th Conference of the Parties (COP29), which will turn the tide once and for all in favor of renewables by unlocking trillions required to pay the net zero bill while pulling the plug on coal, oil, and gas growth by embarking on massive scale fossil fuels phase-out. Will climate activists or Big Oil win this year’s round of high-stakes energy game?

Key takeaways:

Stronger focus on climate finance
Bridging funding gaps and tackling money troubles
$1.3 trillion required annually by 2035 for Paris Agreement goals
Undercover ops: COPs and ‘sinister’ petrostate playbook

After the two weeks of intensive talks at the COP28 climate summit in Dubai, UAE ended, last year’s event set the bar high as the first-ever COP to mention transitioning away from all fossil fuels. Aside from tripling renewable energy capacity and doubling the rate of energy efficiency improvements by 2030, the final text brought into play the importance of tackling methane emissions and other non-CO2 emissions in this decade along with the need to do much more to meet the goals of the Paris Agreement.

Based on the final text and the reactions it provoked, the outcome of COP28 could be described as a mixed bag of actions and steps that enabled all participants to celebrate certain wins while frowning upon and resigning themselves to the losses concerning concessions needed to secure those wins. Closer scrutiny of the outcome sparked concerns that it left the doors wide open for more natural gas and LNG.

This left some wondering whether this was a climate win or a backdoor to more gas and LNG. Despite the criticism it faced for not taking a harsher stance against new fossil fuel developments, taking into account all the positive signals, options, and actions COP28 put on the table, it was deemed to be one of the most significant UN climate talks since 2015, when the Paris Agreement was agreed. Can COP29 surpass this?

Another year brings new attempts to up the climate action ante at the United Nations (UN) negotiations, as COP29 gathers pace, hurtling toward the finish line and the big finale expected to come on Friday, November 22, unless further extensions and overruns occur, as they tend to at this annual climate event.

Since a shift to renewable energy and green technologies is seen as essential to achieving global climate goals, foreign direct investment (FDI) and official lending are deemed crucial for developing economies that face challenges with securing funding.

According to the UN, 2024 broke extreme heat records and led to climate-driven chaos, thus, COP29’s main goal is a major ramp-up in financial commitments to assist vulnerable countries in mitigating and adapting to climate impacts. Whether countries will agree on a new climate finance target remains to be seen.

The UN’s main climate science body, the Intergovernmental Panel on Climate Change (IPCC), issued increasingly dire warnings about the accelerating pace of global warming, highlighting the need for investments in clean energy technologies, infrastructure, and adaption measures to limit temperature rise to 1.5°C above pre-industrial levels.

The UN is adamant that developing countries require significant financial support to build resilience, transition to low-carbon economies, and compensate for loss and damage. While negotiations between 198 participants in Baku are reportedly moving slowly regarding money, delegates from developing nations are calling for more and faster progress on new funding for loss and damage and accelerated clean energy goals. The midway point at COP29 comes as leaders head to Brazil for the G20 summit.

Simon Stiell, Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), which convenes the annual COP meetings, highlighted: “Climate finance progress outside of [the UNFCCC process] is equally crucial, and the G20’s role is mission-critical […] the global climate crisis should be order of business Number One, in Rio. […]

“The [G20] Summit must send crystal clear global signals. That more grant and concessional finance will be available; that further reform of multilateral development banks is a top priority, and G20 governments – as their shareholders and taskmasters – will keep pushing for more reforms.”

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The negotiators at COP29 aim to set a new, more ambitious target for climate finance, as developing countries push for a significantly higher figure, potentially reaching trillions of dollars per year. Even though discussions on the exact amount and the modalities for delivering the funds remain contentious, the opening day of COP29 last Monday was said to have brought a significant breakthrough with the adoption of Article 6 of the Paris Agreement.

This is anticipated to pave the way for a UN-backed global carbon market to facilitate the trading of carbon credits, incentivizing countries to reduce emissions and invest in climate-friendly projects. Given the results of the recent presidential elections in the United States, the impact of a new U.S. administration on global climate action seems to be weighing heavily on those interested in accelerating the transition to a clean energy future.

According to President Hilda Heine of the Marshall Islands and Ireland’s Environment Minister Eamon Ryan, the battle against climate change is a global effort that requires worldwide cooperation towards a better economy for all despite worries about a U.S. withdrawal from the Paris Agreement once the former and incoming president, Donald Trump, returns to the White House next year.

Bridging funding gaps and tackling money troubles

António Guterres, UN Secretary-General, who described 2024 as “a masterclass in climate destruction,” highlighted the critical role of climate finance in addressing the crisis and pointed out: “The world must pay up, or humanity will pay the price…climate finance is not charity, it’s an investment. Climate action is not optional, it’s an imperative.”

Since minerals, such as copper, lithium, nickel, cobalt, and rare earth elements, have been labeled as crucial to transition away from fossil fuels, demand is expected to triple by 2030. The UN claims that many of these minerals are found in Africa, which could benefit financially from their exploitation.

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While noting the concern about a “resource curse,” where countries in which these resources are located do not benefit, Guterres emphasized the need to manage demand without triggering a “stampede of greed” that exploits and crushes the poor.

“The decisions made in Baku will have far-reaching consequences for generations to come. It is imperative that negotiators reach an ambitious agreement that delivers the finance needed to build a resilient and low-carbon future for all,” emphasized the UN.

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While the overall atmosphere during the COP29’s first week may not have been the fast-paced reform-driven affair some are after, there have been significant signs of progress thanks to statements of solidarity and commitment from global leaders and even new nationally determined contributions (NDCs) from the UK, Brazil, and UAE.

Celeste Saulo, the Secretary-General of the UN World Meteorological Organization (WMO), pinpointed: “Climate is transversal to almost everything—from trade to migration, health, communication, disaster risk management, agriculture, productivity, and fisheries. Everything is impacted by climate.”

A prevailing belief in the need to reach an agreement on climate finance during COP29 is another highlight alongside discussions focused on global solidarity levies and forms of gathering the much-needed $1.3 trillion per year by 2035, which is estimated to be required for emerging markets and developing countries to achieve the goals of the Paris Agreement.

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Doreen Bogdan-Martin, Secretary-General of the International Telecommunication Union, noted: “There will be no green without digital and so we need to join forces, and every digital action has to have green at the core.”

The second week has brought the resumption of talks, with the spotlight firmly placed on the Global Stocktake encompassing emissions cuts and fossil fuel phase-out efforts, Article 6 of the Paris Agreement, and climate finance, which is one of the priorities of this year’s COP.

The $1.3 trillion a year requirement seems to be a tough nut to crack given the ongoing high prices, especially since it was suggested that half of the bill needs to be footed from public sources as grants. However, climate activists do not see this as a problem, since they point out that in 2022, at the height of the energy crisis and inflation, $7 trillion was committed to fossil fuel subsidies.

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Stiell urged: “Entering the second week of this COP, it’s a mixed picture. It’s been encouraging to see the significant strides forward, notably on carbon markets, making progress that previous COPs could not achieve. There’s more work to do of course, and I am certainly not complacent, there are still challenges ahead there.

“The bottom line is we are a long way from halving global emissions this decade. So progress at COP29 is absolutely essential. And We must help countries pick up the pace over this final week. We’ve also seen strong signals from two G20 economies already – UK and Brazil – that have just submitted their NDCs. They plan to ramp up climate action. And they are clear – they are doing so, because it’s 100% in their economic interest to do so.”

Many do not share the activists’ enthusiasm for curtailment and phase-out of fossil fuels, as illustrated by the African Energy Chamber, which recently urged: “We must make Africa’s unique needs and circumstances clear and explain the critical role that oil and gas will play in helping Africa achieve net-zero emissions in coming decades.

“I would encourage African leaders to talk about the need for financing, as well, to make it possible for us to adopt renewable energy sources and set up the necessary infrastructure. Africa will need global financial systems, including multilateral development banks, to play a significant role in financing our energy growth which must include fossil fuels.”

This makes it clear any African energy policy at COP29 or elsewhere “must have oil and gas at its core.” The opinion is shared by many other organizations and representatives across the globe, making it more difficult to reach an agreement on more ambitious action that would spell the end of the fossil fuels era.

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In light of the recent release of UNEP’s ‘An Eye on Methane 2024’ report, according to which human-caused methane emissions are responsible for roughly one-third of the planet’s current warming, Inger Anderson, UNEP Executive Director, said: “Governments and oil and gas companies must stop paying lip-service to this challenge when answers are staring them in the face.”

The ongoing concerns over energy security make it even less likely that this year’s COP will tighten the screws on further oil and gas developments. Bearing in mind all the intricacies at play, the UN Secretary-General recently reiterated the top priorities for immediate action, including making emergency emissions reductions, increasing efforts for adaptation and closing the finance gap, and agreeing on a new finance goal.

In his remarks to the World Leaders Climate Action Summit at COP29, Guterres stated: “The sound you hear is the ticking clock. We are in the final countdown to limit global temperature rise to 1.5 degrees Celsius. And time is not on our side.”

Stiell concluded: “There is still a ton of work to do, to ensure COP29 delivers. Parties need to be moving much faster towards landing zones. This applies to the negotiations on the NQCG in particular. I’ve been very blunt: climate finance is not charity; it is 100% in every nation’s interest, to protect their economies and people from rampant climate impacts.

“Parties must wrap up less contentious issues early in the week, so there is enough time for the major political decisions. We’ve worked closely with the Presidency, who have just laid out a clear approach to getting us to the finish line. Ministers who have just arrived need to roll up their sleeves and dive into the hardest issues. The package is starting to take shape, with the NCQG as the key pillar.”

COPs and ‘sinister’ petrostate playbook

Meanwhile, Global Witness, an international non-government organization (NGO) went on an undercover mission to see what was happening at COP29, as the climate negotiations are being hosted by a ‘petrostate’ for another year in a row. The organization provided a recording of a meeting with Elnur Soltanov, Chief Executive Officer of COP29, who was appointed Azerbaijan’s Deputy Minister of Energy in 2018.

This meeting was held between Soltanov and climate activists pretending to be EC Capital, an oil and gas investor, “specialising in global investments in the oil and gas industry,” as well as being “very interested in investing in the oil and the gas industry in Azerbaijan.”

The NGO explained its reasoning by saying: “Fossil fuel powers like Azerbaijan have long known that the UN’s efforts to limit climate change, known as the UN Framework Convention on Climate Change (UNFCCC), could become existential if followed to their logical conclusion. Reducing the demand for fossil fuels, and increasing the supply of clean energy, is anathema to their perceived national interest. So they got stuck in, right from the very beginning.

“A coalition led by Saudi Arabia made sure at COP1 in Berlin in 1995 that petrostates and fossil fuel producers could never be forced into climate action, pushing through a rule requiring unanimity for every decision. That meant COPs operate on absolute consensus, allowing any one state veto power.”

While explaining that the UN climate talks are “a huge opportunity” for the transformation required to slow and stop the climate crisis, the NGO’s Lucia Skelton claims that COP28 seems to have provided other petrostates with “a sinister playbook” to copy from.

The NGO further pointed out: “The oil industry’s game plan at COP has matured since those early, heady COPs when outright climate denial was mainstream enough to tout. These days, oil companies talk a good game, setting out net-zero plans and releasing green ads touting their renewable investments. They push unproven techno-fixes like carbon capture and storage (CCS), central to their net-zero promises. And they promote accounting tricks like carbon credits, which they use to ‘offset’ their emissions.

“Shell has even boasted that its lobbying helped enshrine these tricks in the Paris Agreement, which identified carbon markets as a tool for oil companies to offset rather than reduce their emissions. This lobbying operation was in full force in Dubai. A record 2,400 industry representatives showed up, and they were hard at work. For the first time, evidence suggested that the hosts were using their position at the apex of global climate diplomacy to strike new oil and gas deals.”

According to Global Witness, its investigation findings from last year indicated the UAE was using its position as a host to get fossil fuel deals through, thus, the NGO’s members posed as oil investors looking to fund Azerbaijan’s state-owned oil company, SOCAR, to see if the same pattern was being implemented in 2024.

Skelton underlines that this year’s findings indicate COP29 officials facilitated talks about fossil fuel deals as part of a package to ‘sponsor COP’ with Azerbaijan’s Deputy Energy Minister and CEO of the talks describing an energy future, which includes fossil fuels – ‘’perhaps forever.’’

The NGO does not consider this to be a very fitting behavior for a leader of the climate talks and adds that climate conference officials also sought to announce the “fake” investor as an official COP29 sponsor with no requirement to make sustainability or climate commitments, despite this being a supposed requirement of sponsorship.

Global Witness warned: “Doublethink is a feature throughout the meeting. Soltanov references COP29’s climate goals, arguing that ‘we should be transitioning away from hydrocarbons in a just, orderly and equitable manner’ and that ‘COP is not about oil and gas’ – instead ‘it’s about the climate crisis and how we can tackle [it].’

“But his other statements contradict those lofty ideals. He repeatedly tells EC Capital that while oil production has been declining, Azerbaijan plans to increase its fossil gas production, emphasising its role as what he calls a ‘transitional fuel.’ In Soltanov’s net-zero world, ‘we will have a certain amount of oil and natural gas being produced, perhaps forever.'”

While noting that one could understand why a prospective investor like EC Capital would be reassured by the bullish outlook for oil and gas, the NGO is adamant that such a view flies in the face of advice from the International Energy Agency (IEA), which says that new fossil fuel projects, including gas, are incompatible with keeping global temperature rises to 1.5°C above pre-industrial averages, which nations agreed to do in the Paris Agreement in 2015.

“No country should be able to use the world’s most important climate summit to gain profit, least of all profit gained by accelerating the climate crisis. It’s high time climate summits stopped being hijacked for the interests of big polluters and their profits,” Skelton underscored.