Low expectations for COP30

The COP meetings have long been criticised by climate activists for the limited progress made and the often non-binding nature of many of the promises and commitments made during the conferences. The greenhouse gas emissions generated by the annual gathering of so many world leaders and lobby groups also rub many climate groups up the wrong way. For this year's edition in Belém, Brazil, the construction of a new motorway through the protected Amazon rainforest, designed to transport participants to and from the climate conference, has raised many eyebrows. Still, it would be wrong to state that previous climate conferences have been a complete waste of time. For example, the Paris Climate Agreement, which was concluded during COP21, has been an important basis for climate policy in the EU for many years. 

Drill, baby, drill

The 30th edition of the climate conference is starting under very unfavourable circumstances. In many major economic power blocs, climate has been systematically pushed back on the political agenda in recent years. Not least in the US, where the election of Donald Trump as president has brought about a major policy shift on climate. During his election campaign, Trump already announced that he wanted to reverse or dismantle various environmental laws, protections and investment facilities. And as president, he is putting his words into action. He has cut back on American subsidies for investments in green energy, dismissed climate negotiators and experts, and restarted the process of withdrawing the US from the Paris Climate Agreement. He also wants to strengthen the fossil fuel sector in his own country, partly through subsidies and tax cuts and by removing protections for nature reserves.

Greening takes on a productivity aspect in the EU

In the EU, too, the focus has shifted somewhat since last year's elections, albeit not to the same extent as in the US. In the wake of the Draghi report ("The Draghi report on EU competitiveness"), the EU has launched various initiatives to strengthen the bloc's productivity position. In all the documentation surrounding these initiatives, greening and the net-zero target are still featured prominently, but other goals such as economic growth, self-sufficiency and defence are given more weight now.

This recalibration of the EU's stance on climate policy, with greater emphasis on the economic and administrative implications of some climate measures, particularly for small and medium-sized enterprises, is not entirely unjustified. Small businesses are often disproportionately burdened with reporting requirements, while their total share of greenhouse gas emissions is, in most cases, very limited. A good example of a recent relaxation of climate rules is the 50-tonne 'de minimis' threshold introduced by the EU to complement its carbon border adjustment mechanism (CBAM). CBAM imposes an import levy on a range of high-carbon products, such as iron, steel, aluminium, cement and fertilisers. The new minimum threshold would exempt 90% of importers of CBAM products – mainly small and medium-sized enterprises and private individuals – from the CBAM import tax, while 99% of the CO2 emissions from total imported CBAM products would continue to be taxed. 

The more relaxed position of the EU in terms of climate policy is celebrated by some but criticised by others. Many climate groups are concerned that the planned simplifications will open the door to potential abuse and an erosion of climate policy. The EU will therefore have to proceed with caution in the coming years if it wants to achieve its net-zero target by 2050 while also supporting productivity growth.  

COP30 already a waste of time?

The withdrawal of the US from the international climate stage will undoubtedly weigh on the negotiations at COP30, as it already weighed on the preparations for this COP. As one of the largest emitters of greenhouse gases and one of the richest countries at the conference, the country has an important leading role to play. The pressure on smaller countries to do their bit will decrease if the US no longer participates. There is a good chance that the EU and China will step up to fill the US's place. At the previous climate conference in Azerbaijan, China already adopted a strikingly cooperative attitude and played an important role in drafting the final agreement. Nevertheless, the absence of the US official representatives from the list of attendees is likely to have a negative impact on the effectiveness of COP30.

Climate action is more than just climate conferences

The UN climate conferences will be affected by the policy shift in the US in the coming years. However, it would be wrong to think that climate efforts will be reduced to zero in the coming years as a result. As already indicated, the EU is (for the time being) sticking to its net zero target, although implementation will be less fanatical in the coming years. China has also had a climate target shaping its policy for several years. In 2020, Chinese leader Xi Jinping promised that CO2 emissions would peak before 2030 and that China would be CO2 neutral by 2060. It remains to be seen whether these targets will actually be achieved in both China and the EU, but they at least still provide a clear framework for policy choices in the coming years.

In addition to policy objectives, there are other factors that could potentially support the climate transition. For example, renewable energy infrastructure has become much cheaper in recent years, partly as a result of the overcapacity of green technologies, such as electric cars and solar panels, in China. This has made it commercially attractive for companies to invest in the use of renewable energy, even without taking climate considerations into account.

Climate events are increasingly forcing us to take action

Finally, global warming is increasingly causing climate-related weather phenomena and disasters. The costs associated with this have been rising steadily for years, albeit with the necessary fluctuations from year to year. As a result, homes in more and more areas are becoming uninsurable. Another sign that the costs of climate disasters are rising can be seen in the increasing purchases by insurers of so-called catastrophe bonds. These bonds offer high returns but lose their value if a certain disaster occurs. Think of Hurricane Melissa, which wreaked havoc in Jamaica a few days ago. There is a good chance that this climate event will meet the conditions attached to the $150 million cat bond issued by the Jamaican government in 2024.

In addition to the direct costs, there are also indirect costs (e.g. unemployment because of temporary factory closures after storm damage) and intangible damages (e.g. deaths in floods). The physical risks of global warming are therefore increasingly becoming a reality, which will only increase the pressure on governments and individuals to take measures to curb climate change and adapt existing infrastructure to the new climatic conditions.