The global climate summit known as COP22 had already convened in Marrakech, Morocco, for what was supposed to be an energetic followup to the historic Paris climate agreement when it was gobsmacked by the 2016 election of Donald Trump. Trump vowed to pull out of the Paris accord, and did so four years later.
Here we are again.
This year’s summit, COP29, convenes in Baku, Azerbaijan, with climate progress already uncertain, at best, and the future of US climate leadership again in flux. When he takes office in January, Trump is likely to again withdraw from the broader United Nations Framework Convention on Climate Change, removing the US as a party to the Paris agreement.
“It’s quite hard to see the 1.5 degree target being met with Trump in office,” said Simon Evans of CarbonBrief, which has estimated that expected US policy changes could translate to 4 billion more tons of greenhouse gasses being poured into the atmosphere, enough to wipe out the gains of the past five years of global renewable energy additions.
Shares of renewable energy companies plunged on news of the US election results. CarbonBrief’s analysis, released this summer, was based on a full repeal of Biden’s signature Inflation Reduction Act, which is unlikely, but did not take into account other actions that Trump may take, such as stepping up oil and gas drilling and rolling back environmental rules.
Trump’s rejection of climate change and multilateralism creates an opening for countries such as China to step in and fill the vacuum. Next year’s COP is set to take place in Brazil, which is also the host of this month’s G20 summit. Brazil’s President Luiz Inácio Lula da Silva has exhorted world leaders to take climate change more seriously, even as wildfires devastate Brazil’s Amazon rainforest.
“I don’t think the rest of the world will just stand by and let Trump’s ignorance ruin the planet that we all share,” said Mohamed Adow of Power Shift Africa in a recent discussion with journalists.
“What we should expect, starting here in Baku, is for the rest of the world to band together and demonstrate that we’re moving forward with or without Trump’s administration.”
Holding to account
The election results may inject new energy into the discussions in Baku, as climate negotiators scramble to put in place agreements before the change in US administrations.
The shift in US leadership comes at a critical time: the world needs to cut global emissions by 43% from 2019 levels by 2030, and 60% by 2035, to ward off dangerous levels of warming. Current targets announced by nations will only cut emissions by 2.6%, according to UN scientists. 2024 is set to be the hottest year on record in a string of such records that have been wreaking climate havoc around the world, dislocating people, raising food prices and disrupting supply chains.
Negotiators in Azerbaijan, a major oil-producing country, are tasked with corralling wealthy nations to agree to deliver a bigger amount of aid to emerging markets to help accelerate their green energy adoptions and adapt to the already tangible impacts of global warming. The main goal of “the finance COP,” as it is being characterized, is a new mechanism, called the New Collective Quantified Goal on Climate Finance, or NCQG, that will replace the inadequate $100 billion target set more than a decade ago.
African states are pushing for $1.3 trillion per year by 2030.
The UN-sponsored climate summits are “the only place we have to address the rampant climate crisis, and to credibly hold each other to account to act on it,” said the UN’s Simon Stiell at COP29’s opening.
“Let’s dispense with the idea that climate finance is charity,” he added. “An ambitious new climate finance goal is entirely in the self-interest of every nation, including the largest and wealthiest.”
Also on the COP29 agenda: finalizing the rules for Article 6 of the Paris accord that calls for the establishment of a carbon trading market among countries to help them achieve their climate goals. Alternative mechanisms like carbon markets, if well crafted, offer another way to fund sustainable development in emerging markets. In a surprise move, Baku negotiators greenlit carbon credit rules late on Monday, without much debate.
“If at least two-thirds of the world’s nations cannot afford to cut emissions quickly, then every nation pays a brutal price,” Stiell said. “If nations can’t build resilience into supply chains, the entire global economy will be brought to its knees. No country is immune.”
Some 650 investors that are part of the Investor Agenda have called on government leaders to step up their climate action at COP29. “Effective policies are essential at all levels of government to accelerate the private capital flows needed for a climate-resilient, nature-positive, just net zero transition,” wrote the group, which is organized by the Asia Investor Group on Climate Change, CDP, Ceres, Investor Group on Climate Change, Institutional Investors Group on Climate Change, Principles for Responsible Investment, and UNEP Finance Initiative.
Green China
The election of Trump, who has called climate change “a hoax” and promised to “drill, baby, drill,” will almost certainly set back global climate action. The US is the largest historic emitter and one of the wealthiest of the developed nations that are obligated under the Paris agreement to help the Global South countries that contributed little to climate change finance their transitions. Its negotiators have played a key role in cajoling other nations in past climate talks.
China is primed to fill the gap. The country’s industrial policy has made it a juggernaut in solar panels, electric vehicles and batteries critical to the energy transition. Its cheap products and appetite for exports are helping African and other developing nations green their economies.
The US has slapped tariffs on green imports from China to protect US manufacturing. But China’s massive investment in cleantech is largely responsible for the plunging cost of green energy.
China produced nearly one-third of all global renewable energy last year, and its emissions may have plateaued, several years ahead of its target. It has been electrifying its vast economy at a rate of 10% per decade, nine times faster than the rest of the world, making it what RMI’s Kingsmill Bond calls “the first electrostate.”
“China stands ready to work with other parties to uphold the goal, principles and system of the UN Framework Convention on Climate Change and the Paris Agreement, advance practical actions and achieve sustainable development,” foreign ministry spokeswoman Mao Ning said ahead of the COP29 climate summit.
In a Trump 2.0 world, “the biggest and most important driver for global climate action becomes not global politics —Global North versus Global South, common but differentiated responsibilities, and so on—but the green economy. Who is winning that race,” said Li Shuo, who leads the China Climate hub at the Asia Society Policy Institute. “The US risks losing this race.”
The US pullback could realign power dynamics ahead of COP30 in Brazil next year. The European Union, for its part, has been leading on regulations, such as a carbon border tax adjustment, that are reshaping global trade and investment.
And the troika of the United Arab Emirates, last year’s COP host, Azerbaijan and Brazil are hoping to set the pace for climate commitments. The UAE last year debuted a $30 billion fund for green energy and infrastructure investments, $5 billion of which will leverage concessional capital to address risk factors that hinder private investment in low-income countries. The UAE hopes the fund will mobilize some $250 billion for climate investments in the Global South.
With the US hamstrung, other countries will be jockeying to display their “soft power.” Shuo said China understands that the world is watching the way that they agree and compromise with other countries.
“It will send a very strong signal for the rest of the world to judge the future of global climate governance, which China has invested a lot in over the last decade,” he said. “I think we need to be prepared for some turbulence, but I’m still confident that by the end of Baku we will have a deal.”
Tailwinds to headwinds
Trump has pledged to roll back Biden’s key climate achievements and rescind all unspent funds from the Inflation Reduction Act. A full repeal is near impossible, and many of the provisions, which have created manufacturing jobs in mainly Republican-led states, have built popular support.
Trump will have a difficult time clawing back any funds that have been awarded, contracted or obligated by January 20, setting off a scramble by the EPA to get grants and loans out the door. The Environmental Protection Agency finalized contracts with Greenhouse Gas Reduction Fund awardees back in August, for example.
More at risk: the IRA’s tax incentives for EVs and solar installations; uncommitted DOE funds for industrial decarbonization and much of the Loan Programs Office’s $400 billion for green loans and guarantees. The LPO has a pipeline of tens of billions of dollars in loans to help commercialize promising decarbonization technologies. But the application process is painstaking — in part to prevent the kind of Republican attacks that followed the failure in 2011 of Solyndra, a solar panel maker that had received a half-a-billion dollar loan, which set the program back for a decade (despite the office turning a profit overall).
Many of the LPO loans are conditioned upon companies meeting certain technical or financial conditions and will have to be approved by EPA officials under a Trump administration. Just two days after the election, LPO announced it has finalized a $475 million loan to Li-Cycle to help finance the construction of a first-of-its-kind lithium-ion battery resource recovery facility in Rochester, New York.
Trump has proposed redirecting the loan program, which famously financed Tesla’s first factory in 2010, to fossil fuels or cutting it altogether.
More broadly, Trump has signaled he will roll back environmental regulations, lift a Biden administration pause on new LNG export permits and impose one on new offshore wind projects. Last week, Duke Energy said it would rethink plans to shut down coal plants in Indiana if Trump were to roll back Biden-era rules regulating power plant emissions. On Monday, Trump named Lee Zeldin, a New York Republican that has voted against environmental regulations, as his pick to lead the EPA.
Much of the climate action will shift to state and local spheres, as it did during Trump’s first term, buffering some of the election’s impact on global goals. California Governor Gavin Newsom, for example, has mobilized to protect the state’s climate agenda and is planning to go to Baku for COP29.
Christiana Figueres, the chief negotiator of the 2015 Paris climate accord, brushed aside concerns about another petrostate COP, pointing to the breakthroughs that were achieved at COP29 in Dubai, including a historic agreement to transition away from fossil fuels and a goal to triple renewable energy worldwide.
“Everyone was quite surprised that we got as far as we did, given where the COP was being held,” Figueres told ImpactAlpha on the sidelines of SOCAP in October. “So I wouldn’t reach a facile conclusion that just because it’s in country X, that it can’t deliver. I do expect progress at every COP, independently of where it is taking place.”
