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Authorities in Azerbaijan – the country hosts this year’s global climate summit COP29 – suggest that continued fossil fuel extraction might be compatible with the global climate agreement. With four months to go until COP29 kicks off in Baku, the Azerbaijani presidency announced a flurry of initiatives, non-binding pledges and partnerships to be signed at the summit.
COP-29 summit’s chief executive Elnur Soltanov, who also serves as Azerbaijan’s deputy energy minister, suggested that the Paris climate agreement (2015), according to which the global community agreed to keep global warming below 2 degrees Celsius and ideally to 1.5C, does not necessarily mean reducing fossil fuel production. He believes that all countries’ climate plans could include continued expansion of oil, gas and coal; however, they shall be aligned with the 1.5C-goal and strive for effective emission control.
Fossil fuels versus emissions
Azerbaijan is a major producer of oil and gas, and has plans to step up extraction; the country’s President Ilham Aliyev recently described his country’s fossil fuel reserves as “a gift of the gods.” He added: “We should somehow delineate between a 1.5C alignment and this view about hydrocarbons.”
Citing projections that some fossil fuels will still be needed for energy and other uses even if the world reaches climate neutrality by mid-century, Soltanov argued that “there is certain compatibility between them.” He added: “we should be talking more about emissions, which is really what causes global warming; so in that sense, I really believe that a country can still be 1.5C-aligned and also (according different models) continue to use hydrocarbons”.
Last year, the United Arab Emirates’ COP28 presidency came under fire for an initial focus on tackling emissions; COP28 implied that the widespread use of carbon capture (though these technologies have not been widely tested), rather than fossil fuels, was the main cause of climate change. Hence, the COP28 summit eventually ended with a landmark call on governments to transition away from fossil fuels.
At the same time, the negotiations among the states failed on the core outcome of the perspective settlement: i.e. including a new, large-scale financial aid target to support climate action in developing countries.
Other initiatives
Recent headline announcement by the COP29 head negotiator Yalchin Rafiyev, a new “Climate Finance Action Fund”, CFAF will be created with the headquarter in Baku, financed with “voluntary contributions” from countries and companies that produce fossil fuels; Azerbaijan will be a founding contributor, COP-29 confirmed.
However, the CFAF will not become a reality before at least 10 countries have collectively pledged $1 billion, Rafiyev added, though he declined to say how much the Azerbaijani government was planning to contribute or which potential contributors the presidency has already contacted.
Among other initiatives is the “Green Energy Pledge” focused on infrastructure and regulation, aimed to increase worldwide green energy storage capacity to 1,500 gigawatts by 2030; thus “COP-Truce Appeal calls for a global ceasefire during the summit, and a partnership for “enhanced climate action” in the tourism sector.
Source and reference:
https://www.politico.eu/article/fossil-fuel-extraction-cop29-azerbaijan-climate-action-oil/?utm_source=email&utm_medium=alert&utm_campaign=Fossil%20fuel%20extraction%20compatible%20with%20climate%20action%2C%20says%20COP29%20host%20Azerbaijan/
20 July, 2024.
Our Comment
= Market and non-market based approaches in carbon removal
Global states/parties negotiating the Paris Climate Change Agreement, PCA recognized the benefits for the cooperating countries to reduce emissions under a market-based system. Under the PCA, such cooperation should promote: a) greater ambition, in terms of mitigation of emissions and adaptation to the effects of climate change; b) it should foster sustainable development; and c) it should encourage broad participation in climate action from the private and public sectors.
In market mechanisms, the countries set a limit (and/or cap) on greenhouse gas emissions, GHGs, which creates a kind of “value component” to the “right to emit”; when the countries apply market principles and rules to GHGs, the companies that reduce emissions below their limits can “sell the unused right to emit”, measured in tons of CO2 equivalent. On the other hand, those states/firms that do not meet the target can buy the “allowances to pollute”, which is often called the emissions trading system. In the system of accurate measurements and clear rules and transparence, the mechanisms are supposed to work.
There are a number of benefits to emissions trading: e.g. flexibility could be vital and companies can better plan their capital investments and climate action in the medium and long term, knowing that in some years they can buy units to help meet their reduction targets; in other years they might have units to sell. Another benefit of emissions trading creates a monetary incentive to reduce emissions. For example, the Kyoto Protocol created three such “market mechanisms”. The first, emissions trading, as described above, has led to a growing number of emissions markets in countries around the world. Perhaps the best known is the European Union Emissions Trading System, EUETS; other two market mechanisms are project-based: the Clean Development Mechanism, CDM and joint implementation, JI.
Under Joint Implementation, JI the countries with commitments under the Kyoto Protocol are eligible to transfer and/or acquire emission reduction units (ERUs) and use them to meet part of their emission reduction target.
More on JI in: https://ji.unfccc.int/index.html
On CDM methodologies in: https://cdm.unfccc.int/methodologies/index.html
On CDM registry in: https://cdm.unfccc.int/Registry/index.html
One of the vital elements in national efforts to implement climate policy frameworks is the emissions trading systems, ETS which offers a market-based approach to reducing emissions. The European ETS (launched in 2005) continues to be the largest system in force, in terms of trading volume and value. In the first half of 2023, the EU adopted important reforms of the EU ETS framework as part of the “Fit for 55” package, to align the system with the bloc’s 2030 climate target of at least 55% net emissions reductions compared to 1990 levels. These reforms increased the ambition and expanded the scope of the EU ETS to maritime transport, and introduced a new, separate ETS for buildings, road transport and additional sectors.
For example, Germany launched its national ETS for heating and transport fuels in 2021; by 2023, the government successfully completed all legislative adjustments to the ETS. Starting in January 2023, the system expanded to GHG emissions from coal, and from January 2024, it also encompassed fuels from waste incinerators. A late 2023 court decision drastically reduced the national budget, resulting in a greater-than-planned increase in the CO2 price in January 2024.
Source: https://icapcarbonaction.com/system/files/document/icap-2024-status-report-executive-summary_en.pdf
Finally, the contested issue shall be mentioned: zero-carbon versus emission’s control shall be in favor the latter, particularly keeping in mind the esteemed experts’ prediction that global fossil fuel consumption in the energy mix around the world in the years to come will reach 85 percent!