Clear Expectations for the Climate Conference
This year's UN Climate Conference (COP29) takes place in Baku, Azerbaijan, from November 11 to 22. Time is running out to find viable solutions to tackle climate challenges together – decisively and effectively.
Global warming must be limited to 1.5 degrees Celsius compared to pre-industrial levels. 1.5 degrees is neither an arbitrary figure nor a political one. It reflects a scientifically proven planetary boundary. Every tenth of a degree more is dangerous. By 2024, the earth is already dangerously close to the 1.5 degree threshold. Joint action is urgently needed.
Less reliance on offsetting, more climate-friendly financial flows
Switzerland is warming at an above-average rate and is suffering from increasing extreme weather events. It’s one of many high-income countries that also has a great interest in the world achieving viable solutions and successfully tackling the climate challenge. A year ago, the international community agreed to phase out coal, oil and gas by 2050 – a substantial milestone. This step is also important for Switzerland. As a small country, it is dependent on numerous countries – especially those with high greenhouse gas emissions such as the USA, China, India, Brazil, Indonesia, Saudi Arabia and Mexico – implementing the fossil fuel phase-out quickly and consistently.
At this year's conference in Baku (COP29), the internationally agreed climate targets must be driven forward. The world's governments have until February 10, 2025, to submit new and more ambitious national climate protection targets, known as Nationally Determined Contributions (NDCs), to the UN. For Switzerland, two aspects are paramount: It must push ahead with climate protection at home instead of relying on offsetting in poorer countries. It’s concerning that the country’s first CO2 compensation project involves violations of labor rights. If the bilateral offsetting agreement with the Thai government had to be suspended, this would be a setback for Switzerland, which relies on intergovernmental certificate trading more than any other country. The E-buses promoted by Switzerland in Bangkok are the first program authorized under Article 6.2 of the Paris Climate Agreement in Asia, and the second worldwide.
Secondly, the Swiss government must make international financial flows from Switzerland 1.5 degree-compatible. Although Switzerland has ratified the Paris Climate Agreement, banks, insurance companies and pension funds continue to finance transactions that are harmful to the climate and biodiversity – such as coal mining, oil infrastructure, fracking projects and the deforestation of tropical rainforests.
The Swiss financial center manages a quarter of the world's cross-border assets. As a result, local financial institutions hold an enormously effective international lever for curbing the climate and biodiversity crisis. A sustainable and responsible financial center is key to implementing last year's COP28 agreement and to triple the share of renewable energy by 2030.
Support for international climate protection
In poorer countries, the necessary transition to renewable energies can only succeed if they receive significantly more support. International climate policy stipulates that, starting in 2020, the industrialized countries and historical drivers of the climate crisis must support the Global South with 100 billion US dollars annually. The international community is pursuing two goals with “international climate financing”: On the one hand, adapting to negative climate impacts and, on the other, accelerating a sustainable and inclusive transition to renewable technologies (see more on just transition).
At COP29, governments will negotiate a new, higher target for international climate finance, the so-called New Collective Quantified Goal (NCQG). In view of the growing need worldwide, the realistic figure of over one trillion US dollars per year is being circulated. The ideas differ as to whether the money should be provided in the form of loans or from public funds. In addition to the type and amount of the funds, their origin is important. One thing is clear: In order to ensure that the polluter pays and to ease the burden on state budgets, companies whose business activities counteract solutions to the climate crisis must participate in public climate financing.
Fair funding for preventive adaptation and damage control
Financial support is not just lacking for decarbonization. The affected countries also lack money for adapting to the consequences of climate change. According to the latest “Adaptation Gap Report” by the UN Environment Program (UNEP), every billion dollars invested in adaptation would prevent 14 billion dollars in economic damage. Adaptation therefore not only saves livelihoods and human lives, but also pays off economically.
What's more, rich countries have been providing three quarters of “international climate financing” in the form of loans since the beginning. This means that the countries that are not responsible for climate change are getting into debt. They often have to pay interest on what is vital adaptation. The countries of the Global South are already spending five times more on debt repayment than on combating the negative consequences of the climate crisis – a vicious circle.
Today, the climate financing of industrialized countries covers less than a tenth of the necessary adaptation measures in the South. The result is ever greater damage. There’s a tiny ray of hope, though, that after a year of tough negotiations, governments agreed on a loss-and-damage fund at the last UN climate summit. Unconditionally and pragmatically, those affected by a climate disaster can be compensated for their losses, as was recently the case in Malawi, where 2,700 families received compensation payments through their cell phones after Cyclone Freddy.
Following the agreement at COP28, the fund's board decided on the institution's policy; its proposal must now be approved by the governments at COP29. As with the financing of climate change mitigation and adaptation, equity is central to loss and damage. While the governments of industrialized countries claim there is no money, international corporations are making billions in profits from fossil fuels and CO2-intensive industries. It is thus expected and important that the private sector in question is doing its part to repair the damage it causes.
