NOVEMBER 13, 2024

Hello!

The United Nations’ climate summit is underway in Baku, Azerbaijan just a week after the elections in the United States. We’ll be watching to see if countries make a deal on climate finance.

In this week’s edition:

• Cat Clifford shares the connection between energy access and economic prosperity.
• Anca Gurzu, who is on the ground in Baku, has five things to know about COP29.
• In our latest Data Dive, Cat sizes up the growing cleantech market. 

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Source: Energy Institute Statistical Review of World Energy, World Bank data • GDP per capita data from the World Bank (2023 and 2022). Energy use per capita data from the World Energy Institute. GDP = gross domestic product. Commonwealth of Independent States is a group of sovereign states formed by Russia and 11 other former Soviet Union countries.

How to improve life for humanity — and not worsen global warming

BY: CAT CLIFFORD

Access to reliable energy dramatically improves the quality of people’s lives. And the world needs a lot more energy to bring billions of people out of poverty.

“Abundant and affordable energy — and particularly access to electricity — is what makes possible modern shelter, transportation, abundant food, physical comfort, health systems and increased longevity. This is a good thing,” Armond Cohen, executive director of the Clean Air Task Force (CATF), told Cipher.

Wealthy countries, like the United States, built their economies in large part with fossil fuel energy. Now, just as lower income countries in Africa, Asia and Latin America look to similarly develop their economic fortunes, many world leaders are trying to transition away from fossil fuels toward energy sources that do not release greenhouse gas emissions.

But embracing clean energy takes innovation, which requires money that low-income nations typically do not have.

This conflict is a central focus of the United Nations climate summit, the 29th Conference of the Parties, or COP29, underway in Baku, Azerbaijan.

“Instead of focusing on reducing energy use, we need to do much more to mobilize capital to dramatically scale deployment of clean energy in emerging and developing economies,” Jason Bordoff, the founding director of the Center on Global Energy Policy at Columbia University, told Cipher.

As the global energy transition matures, it will allow further increases in GDP without contributing to global warming, because new energy technologies use “dramatically less energy than their fossil fuel counterparts,” Robbie Orvis, senior director of modeling and analysis at the non-partisan energy and climate policy think tank Energy Innovation, told Cipher.

Clean energy technologies are more energy efficient, meaning they use less energy to do the same job and, if they are powered by renewables, more of the electricity generated is actually used rather than wasted as heat, as in the fossil-fuel combustion process.

Even as efficiency improves, global energy demand is still likely to grow because many low-income countries have so much development in front of them. Moreover, for many low-income nations, meeting the basic humanitarian needs of their people is urgent.

This year’s COP will be successful if wealthy countries commit to providing much more money each year to lower-income nations so they can adopt clean energy and adapt to climate change, said Bordoff.

As important is helping low-income nations improve their general economic wellbeing so they have a better chance of getting financing on their own, Brian Mukhaya, a manager of CATF’s Energy and Climate Innovation Africa program, told Cipher.

Read the full article on Cipher’s website.

Lunchtime Reads and Hot Takes

COP29 Negotiators Agree on Global Carbon Market Mechanism — Bloomberg
Anca’s take: The rules, dubbed “Article 6.4,” stipulate how countries should trade carbon credits. Climate groups called it a backdoor deal for how they were approved, but industry applauded the development.

COP29 host Azerbaijan hits out at West in defense of oil and gas industry — Reuters

Anca’s take: The comments by Azerbaijan’s President Ilham Aliyev came moments before United Nations Secretary-General António Guterres said doubling down on fossil fuels was an absurd strategy, highlighting the tensions at the summit.

‘Science is still science’: US still committed to climate fight despite Trump’s win, Podesta says at COP29 — E&E News (subscription)

Cat’s take: Top U.S. climate diplomat John Podesta is working to convince global climate leaders in Azerbaijan the U.S. will remain committed to climate efforts despite a second Trump presidency. A hard spot to be in — and a tough road ahead.

COP 29: UK’s Starmer sets out new 2035 climate goal — Reuters

Anca’s take: The United Kingdom is one of the major industrialized emitters and the new target puts it on the path to net-zero. The key, of course, is to see more such ambition that also turns into action.

Trump taps former New York congressman Lee Zeldin as EPA chief — The Washington Post

Amena’s take: Zeldin tweeted he would restore energy dominance, revitalize the auto industry and make the U.S. global leader of artificial intelligence, while protecting the nation's air and water. He didn’t comment on climate.

Chinese solar firms go where US tariffs don’t reach — Reuters

Bill’s take: This sort of whack-a-mole is inevitable, though President-elect Trump has said some things indicating he’d be more open to Chinese companies avoiding tariffs by opening their factories in the U.S.

Musk Believes in Global Warming. Trump Doesn’t. Will That Change? — The New York Times

Amena’s take: A fascinating read, highlighting that Trump did soften his rhetoric against electric vehicles. The question is whether Elon Musk will be able to soften the president's stance on other clean technologies.

More of what we're reading:

• Development bank financing pledge gives COP29 summit early boost — Reuters
• 10 reasons why US president-elect Donald Trump can’t derail global climate action — The Conversation
• COP29 chief exec filmed promoting fossil fuel deals — BBC
• World on track to exceed warming of 1.5C this year, EU agency says — Financial Times (subscription)
• Exxon Says Trump Should Keep U.S. in Paris Climate Pact — The Wall Street Journal
• US Unveils Plan to Triple Nuclear Power by 2050 as Demand Soars — Bloomberg

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Five things to know as COP29 kicks off in Azerbaijan

Illustration by Nadya Nickels.

BY: ANCA GURZU

BAKU, Azerbaijan — Conversations about money are never easy, and they will be especially difficult at this year’s United Nations climate gathering.

Negotiators from around the world kicked off the two-week, high-level summit in Baku, Azerbaijan, known as COP29, earlier this week with one key goal: agree on how much rich countries should pay poorer countries to fight climate change.

Failure to come to an agreement risks fracturing an already tenuous sense of unity among nations and could hamper global efforts for more ambitious emissions-cutting plans.

Here are five things to know:

Show us the money

The success of this year’s COP hinges on whether countries can agree on a new financial assistance goal.

The current goal of $100 billion per year — which countries met in 2022 two years late — is set to expire in 2025, setting the stage for a new target.

Expectations are hovering in the trillions of dollars, a huge jump from the previous deal, reflecting both the increasing costs of the energy transition in some regions of the world and the worsening effects of climate change.

Numbers only tell part of the story

Besides the topline climate finance target, experts say it’s crucial to look at how the money gets distributed. In other words, “how much” should not overshadow the “how.”

Most of the funds awarded under the expiring goal came in the form of loans. Going forward, developing countries want more funding in the form of grants, which experts say could reassure poorer countries they can see their climate ambitions through.

What about China?

With pressure to contribute more money, rich countries want to see the financial burden spread more widely. Enter China.

China is not keen on contributing to the collective cash pot, preferring instead to give money on its own. Expect pressure on China to be a crucial backroom negotiating topic in Baku.

United States shake-up

COP29 began just days after Donald Trump won the U.S. presidential election. Trump previously pulled the U.S. out of the 2015 Paris Climate Agreement and during his campaign he vowed to do so again.

Trump’s victory is already reverberating into the dynamics of the COP negotiations.

Reality check

Even though global clean energy use and investments are surging, only a fraction of that growth is happening in developing countries. And with electricity demand also rising quickly, fossil fuels are expected to remain dominant for years.

Read the full article on Cipher’s website.

Global cleantech market to top $2 trillion by 2035 – IEA

Source: International Energy Agency, Energy Technology Perspectives 2024 report • Data for 2035 is a projection based on current policy conditions.

BY: CAT CLIFFORD

The global clean technology market has more than tripled in the last eight years and, under current policies, is expected to nearly triple again by 2035 to surpass $2 trillion.

That’s according to a new report published by the International Energy Agency looking at six top clean energy technologies — solar photovoltaic cells, wind energy, electric cars, electrolyzers (the machines used to produce hydrogen from water), batteries and heat pumps.

The report focuses on the major economies in the clean technology marketplace — China, the United States, Europe and India. It also analyzes the potential for emerging and developing economies to become more engaged in the cleantech market based on 60 parameters, including a country’s resources, energy infrastructure, grids, pipelines and ports.

“It is very easy here to get lost in the billions and trillions, but I think the main message you need to retain here is that clean technologies are no longer a niche market, nor just a climate story. They now constitute a sizable market and are an important industrial opportunity,” said Timur Gül, head of the Energy Technology Policy Division at IEA, on a conference call with reporters.

At $2 trillion, the clean energy technology market in 2035 will be “more or less equal” to the global crude oil market today, said Fatih Birol, executive director of the IEA.

It’s hard to overstate what a big role China plays here: China controls an average of 70% of the clean technology manufacturing in the world, Birol said.

China is currently building what will be its largest solar panel manufacturing facility in the Shanxi province. That one manufacturing facility would be able to meet all the European Union’s demand for solar cells, Birol said.

The U.S. has made “major steps forward” in the global clean technology marketplace, specifically “getting a big boost from the Inflation Reduction Act,” Birol said. With Republican Donald Trump winning last week’s election, however, the pace of climate technology progress in coming years in the U.S. is uncertain.

Globally, trade in clean energy is expected to keep growing, with China set to dominate cleantech trade routes for the next ten years.

AND FINALLY...
Windy fields

Cipher reader and project director at TRC Environmental Corporation Dan Grabowski took this photo while heading to a client meeting in central Illinois of wind turbines spinning as far as the eye could see.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.