BRUSSELS — Rahman Mustafayev, the soft-spoken, Moscow-educated ambassador from Azerbaijan to the Netherlands, sat in a hotel restaurant near the European Parliament recently and shared his thoughts about the United Nation's climate summit in November, called COP29, which will be hosted by his home country.
He discussed not only how to boost climate funding for developing countries — the theme of the summit — but also how to make the cash more accessible.
“[Financing] is insufficient, but the issue is also how to get access” to it, he said, pointing to the high interest rates poorer countries receive. "Azerbaijan will raise the issue of ... more suitable and accessible funding mechanisms for developing countries."
Azerbaijan is a country of 10 million inhabitants straddling Eastern Europe and West Asia that increased its standard of living in recent decades due to its vast fossil fuel reserves, which Mustafayev described as a “blessing.” He pitched the country as a well-placed negotiator for the summit because “we're in between the East and West, North and South.”
The stakes of the summmit are mounting, as wealthy countries are under pressure to significantly boost the amount of money they’ve pledged to help developing countries fight global warming. But the challenge is more complex than just agreeing on a final number and access to financing, Mustafayev told me. It’s also about transparency.
Yes, international banks and donors need to give low- and middle-income countries better conditions to use the cash and draw in more private investment. But, in turn, developing countries need to be more transparent in how they use the money, Mustafayev said.
Mustafayev was keen to talk about Azerbaijan’s renewable energy ambitions as well, but also defended the country’s fossil fuel legacy.
The former Soviet republic, bounded by the Caspian Sea and the Caucasus Mountains, unveiled last year the country’s first large-scale solar plant expected to power 110,000 homes.
Meanwhile, Azerbaijan is a critical piece of Europe’s energy infrastructure; it is one of the bloc’s main natural gas exporters and plans to increase its gas production further. Azerbaijani President Aliyev said recently that the country “will defend the right of [fossil fuel] countries to continue investments and to continue production.”
But is that in line with the COP28 agreement for the world to transition away from fossil fuels? Mustafayev argues the stance aligns with present-day economic reality.
“This, in fact, gave us the opportunity to develop our industry, to provide European energy security, to establish connections, to build pipelines,” he explained. “This was the source which we have used in full to start now the process of the green energy transition.”
Read the full story from Anca’s chat with the ambassador here.
Lunchtime Reads and Hot Takes
Manchin, Barrasso announce long-elusive energy permitting deal — POLITICO Pro (subscription) Amena’s take: A year in the making, this deal will enable transmission lines to be built, renewables to be installed, oil, gas and coal to be tapped on public lands and lawsuits to be thwarted.
Pentagon to Bolster Response to China, Russia in Arctic — Bloomberg Cat’s take: Melting polar ice caps are opening up new transport and shipping lanes of interest to China and Russia, a defense leader says. Big picture: Global warming is a matter of national security.
How fracking could unlock a clean energy future — The Washington Post Amy’s take: I learned a lot reading this, but it should have addressed concerns about fracking (clearly on readers’ minds, judging by the comments section).
A cautionary tale from South Africa’s ‘just energy transition’ — Financial Times (subscription) Bill’s take: South Africa was the first country to get special support for phasing out coal, but the so-called “Just Transition Partnership” has been a very bumpy road.
Kamala Harris Seen as Tougher Oil Opponent Than Biden — Bloomberg Amena’s take: Vice President Kamala Harris has a record of going after oil companies and upholding climate justice, a stance that makes it likely she would lock in President Biden's climate policies.
White House hears pitch for planetary sunshade — E&E News (subscription) Cat’s take: Interest in Washington "exceeded my expectations," says the group's executive director. These kinds of solar geoengineering projects are being considered more seriously as record heat roils the globe.
Heat pumps, EV chargers and more: U.S. unveils $4.3 billion in local climate funds — The Washington Post Amena’s take: The grants will especially aid communities "most vulnerable to flooding, heat waves and other destabilizing impacts of climate change," EPA administrator Michael Regan told news reporters.
Get Ready to Pay More for Less-Reliable Electricity — The Wall Street Journal Cat’s take: Key quote and the bottom line: “The problem that we have right now comes from decades of lack of investment ... You cannot catch up in one minute.”
The mind-blowing thing we get WRONG about energy — DW
Bill’s take: It’s not just that clean electricity replaces fossil fuels, it’s also that we ultimately need a whole lot less energy to do the things we need to do.
Why China Is So Interested in Kazakhstan — The New York Times Cat’s take: This richly reported story shows how much the geography of a country — and the associated natural resources — will define geopolitics in the energy transition.
Indonesia’s massive metals build-out is felling the forest for batteries — AP News Bill’s take: This story deftly underscores the conflict — totally unnecessary, really — arising in a country whose resources, including both minerals and forests, are key to fighting climate change.
More of what we're reading:
Global coal demand to remain flat this year and next-IEA — Reuters
US remains off track on climate pledge despite Biden green spending push — Financial Times (subscription)
US targets nitrous oxide in new phase of climate fight — Reuters
Asia’s coal fleet is the youngest and busiest in the world, especially in Southeast Asia, which includes countries like Indonesia, the Philippines and Vietnam.
Left to operate through their natural lifetimes, these coal plants will contribute significantly to global carbon dioxide emissions through the end of the century.
But simply closing the plants down is impossible in a region seeing some of the fastest energy demand growth in the world. What to do with this young coal fleet is one of the knottiest challenges of the global energy transition.
A series of efforts are underway to try to address the challenge. These involve trying to find ways to pour tens of billions of dollars of new funding into alternative clean energy projects and creative financing techniques deploying carbon credits.
The aim of these efforts is to shave decades off the planned use of some of the most-polluting energy sources on the planet. Some of these efforts appear to be bearing fruit, but the solutions broadly continue to look expensive and difficult — though no less critical.
Bill Spindle visited Southeast Asia to look at some ways people are chipping away at the problem.
Industrial emissions poised to become largest U.S. carbon source
Source: Rhodium Group, Taking Stock 2024 • Industrial emissions arise from production and use of fossil fuels on site and exclude indirect emissions from electric power purchased by industry. Values are drawn from Rhodium's 'mid-emissions scenario," which assumes cost declines for clean energy technologies, fossil fuel prices consistent with historical trends and Congressional Budget Office projections for economic growth.
The industrial sector is slated to become the largest source of greenhouse gas emissions in the United States over the next decade, owing to the slow pace of clean technology deployment in the sector and an increase in oil and gas production, according to new data from the Rhodium Group shared exclusively with Cipher.
The U.S. goal of halving its greenhouse gas emissions by 2030 will remain challenging if industrial-sector emissions, which currently account for a quarter of the nation’s emissions, cannot be curbed.
Published on July 23, Rhodium’s Taking Stock 2024 report projects industrial emissions will surpass the transportation sector as the country’s largest source of carbon emissions by 2033.
“We find the industrial sector playing an ever-larger role in U.S. emissions in 2030 and beyond as decarbonization solutions are rolled out much more slowly compared to power and transportation,” Ben King, associate director on Rhodium Group’s U.S Energy Team, told Cipher.
In the power and transportation sectors, large-scale deployment of solar panels and electric vehicles has been ramping up for years, due to tax credits, declining costs and compliance with federal regulations, according to a May report from Rhodium.
While Rhodium expects power and transportation emissions to decline through 2035, the group predicts industrial emissions will remain nearly flat and therefore make up an increasing portion of declining total emissions.
The industrial sector is “not monolithic,” Rhodium said in the report, and is comprised of at least half a dozen carbon-intensive industries. Of these, the oil and gas sector is the only one facing federal methane reduction rules and is projected to show a 12 to 28% decline in emissions in 2035, despite persistently higher oil and gas production levels.
In contrast, emissions from five other major industries — chemical production, mining, cement manufacturing, iron and steel production and food production — are projected to rise 6% by 2035.
The 2022 Inflation Reduction Act's tax credits for carbon capture and storage and clean hydrogen are insufficient on their own to significantly reduce industrial emissions, according to Rhodium.
“A broader range of technological solutions and policies is necessary for meaningful decarbonization,” King said.
AND FINALLY... Solar pergola
Cipher reader Raahul Ramakrishnan snapped this photo of a giant solar installation in Barcelona earlier this summer. The structure, known as the “photovoltaic pergola of the Forum” was built in 2004 to celebrate sustainability, and is so big it can be seen from about 18 miles away.
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.