TODAY: The UN forges ahead with a new Pact for the Future

Good morning, ladies and gents. It’s a busy start to the week with lots of ground to cover, but first, the latest climate developments straight from the UN as COP29 inches nearer…

THE BIG CLIMATE STORY OUTSIDE THE REGION- UN adopts Pact for the Future: The United Nations General Assembly adopted a ” Pact for the Future ” yesterday, described as a landmark agreement covering issues including sustainable development, climate change, and the transformation of global governance. The agreement pushes a need to reform international financial architecture by giving developing countries greater input on how decisions are taken at international financial institutions, reigniting the debate on a lack of support from World Bank and others. mobilizing more financing from multilateral development banks, reviewing sovereign debt architecture to ensure developing countries can borrow more sustainably, and strengthening the global financial safety net to protect the poorest in the event of financial and economic shocks.

Fossil fuel phase-out language is back: The pact sets the stage for a reintroduction to the fossil fuel phase-out debate at COP29 in November, confirming the need to transition away from fossil fuels in energy systems in order to achieve net zero emissions by 2050 and keep global temperature rise to 1.5 °C above pre-industrial levels.

Other points of interest: The pact also aims to improve how human progress is measured by looking beyond GDP to capture human and planetary wellbeing and sustainability, and includes a commitment to explore the introduction of a global taxation on high-net-worth individuals, the UN’s statement reads.

The story grabbed some ink in the international press: Reuters | AP | The Guardian | Deutsche Welle | NPR

IN OTHER NEWS- The Amazon’s wildfires are releasing tons of carbon into the atmosphere: Brazil’s hundreds of thousands of fires this summer, half of which are occurring in the Amazon rainforest, have only been amplified by severe drought affecting 60% of the country. 2.4 mn hectares of land in the rainforest burned between June and August with over 188k fires identified this year so far. As the Amazon burns, the carbon sink is releasing its stores of the greenhouse gas into the atmosphere with 31.5 mn tons of carbon — equal to running eight coal plants for a year — emitted between June and August alone. The story was picked up by Bloomberg over the weekend.

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HAPPENING THIS WEEK-

The Decarbomed Forum will take place tomorrow and Wednesday in Tunis. The forum will showcase innovative solutions for transitioning to carbon neutrality in Tunisia and the Mediterranean region, focusing on helping businesses take advantage of new tech, renewable energy services, and green financing mechanisms to decarbonize operations.

On Wednesday, the Green Steel Summit will open its door and run through to Thursday in Dubai. The event will bring together steel industry professionals and decision makers to discuss market intelligence and the latest technological developments in sustainable steelmaking.

COP WATCH-

The Loss and Damage fund appoints new head: Senegalese finance specialist Ibrahima Cheikh Diong (LinkedIn) will serve as The Fund for Responding to Loss and Damage first executive director from 1 November for a four-year term, according to a statement released on Saturday. Diong will provide “strategic leadership and oversight of the Fund’s Secretariat and assist the Board in delivering on the Fund’s mandate to provide financial support to vulnerable countries hardest hit by climate impacts,” the statement notes. The Fund’s board also finalized adding the World Bank as interim trustee and host of the Secretariat.

IN OTHER CLIMATE FINANCE NEWS- Western philanthropies gather USD 10 mn in climate finance: The Rockefeller Foundation and the Global Alliance for People and Planet — which includes the Ikea Foundation and the Bezos Earth Fund — have pledged USD 10 mn in funding to help the World Bank and African Development Bank support 15 green energy projects in Africa, the Financial Times reported on Friday.

The West is playing catchup to China’s contributions: China’s green financing in Africa reached about USD 500 mn in loans this past year from state-owned enterprises for three renewable energy projects, the FT wrote. The projects include a USD 50 mn solar plant in Burkina Faso, a USD 240 mn hydropower plant in Madagascar, and USD 200 mn for electrification in Uganda. China – Africa’s “biggest two way lender” – also recently hosted the China-Africa Cooperation Summit to try to convince leaders from 50 African countries to purchase more of its green exports in return for more loans and investment.

WATCH THIS SPACE-

Masdar to go ahead with Saeta Yield acquisition: Renewables giant Masdar will reportedly finalize its acquisition of Spanish renewable energy firm Saeta Yield from Canada-based investment firm Brookfield this month, Bloomberg reports, citing people with knowledge of the transaction. Earlier reports from Spanish outlet Expansion in September indicated the transaction could be valued at over EUR 1.5 bn.

Mauritius mulls e-waste recycling project in Egypt: A group of Mauritian investors are exploring the possibility of constructing a large-scale electronic waste recycling facility in Egypt, according to a statement. The facility would extract gold, platinum, silver, palladium, and copper from the electronic devices and convert plastic waste into fuel, co-founder of Greentech Group Basil Botha told Egypt’s General Authority for Investment and Free Zones during a meeting.

IN OTHER EGYPT NEWS- Will the country get a wind turbine blades production factory? The Suez Canal Economic Zone (SCZone) is looking to global investors to set up a wind turbine blades production factory, which would be the first of its kind in the region, Al Mal reports, citing a government document it has seen. No further details were provided.

Germany urges EU to delay rules threatening hydrogen market: Germany is calling for a seven year delay on temporal correlation criteria to prove renewables output on the grid and hydrogen production match, Bloomberg reported on Friday, citing a letter it has seen sent from German Economy Minister Robert Habeck to EU Energy Commissioner Kadri Simson. Habeck also urged the EU to consider phasing out additionality norms until 2035 which require producers to make sure their hydrogen demand matches new low-carbon or renewable energy generation.

Germany did a 180 in the name of hydrogen: Germany had earlier supported these rules but now finds that “these requirements were still too high and are slowing down the ramp-up of the projects for the production of renewable hydrogen in Germany and many other member states,” Habeck wrote. Habeck maintains that a delay of the criteria — which would also affect blue hydrogen purchasing — would allow companies to handle high costs, Habeck added.

DANGER ZONE-

Weak demand hinders green investment from heavy industries: Highly polluting industries including steel, aviation, shipping and cement production are struggling to finance the 473 proposed large-scale low carbon projects due to insufficient demand creating a “critical investment barrier,” according to data from the UN-backed Industrial Transition Accelerator (ITA). If that barrier is removed, USD 700 bn in financing could be channeled into the projects by 2030 to help the sectors decarbonize. Following through with the 473 proposed projects would account for 80% of emissions cuts needed by 2030 to align with the Paris Agreement’s climate goals.

What else can help along the investment push? Along with alleviating the “critical investment barrier,” policy interventions are needed with governments accounting for around 25% of global steel demand and 40% of cement demand, says ITA executive director Faustine Delasalle. Carbon pricing mechanisms, green purchasing mandates, and new product standards are also needed, she added.

REFRESHER- The ITA was launched in December 2023 at the World Climate Action Summit and aims to gather investment to bolster decarbonization efforts in heavy-emitting industries — aluminum, cement, chemicals, steel, shipping, and aviation. The accelerator also supports scaling clean industrial projects to help them reach final investment decisions.

THE SCORECARD-

#1- Multilateral development banks (MDBs) provided a record USD 125 bn in global climate finance in 2023, more than doubling their 2019 contributions, according to a press release from the Asian Development Bank on Friday. This funding was directed toward both climate change mitigation and adaptation efforts, with USD 74.7 bn allocated to low- and middle-income countries and USD 50.3 bn to high-income economies. The majority of the funds for low-and middle-income economies went to mitigation, while USD 24.7 bn supported adaptation. Similarly, high-income countries received USD 47.3 bn for mitigation and USD 3 bn for adaptation. MDBs also mobilized significant private finance, totaling USD 28.5 bn for lower-income countries and USD 72.7 bn for higher-income nations.

#2- CAM raises USD 1 bn for natural capital projects: Climate Asset Management (CAM) — a JV between HSBC Asset Management and specialist climate change investment and advisory firm Pollination — has raised more than USD 1 bn to invest in natural capital projects, including regenerative agriculture and land rehabilitation, CEO Martin Berg told Reuters on Friday. The funds, driven by increasing demand from investors aiming to protect biodiversity, have already closed to new money, with backers like Germany’s Gothaer Asset Managemen t contributing USD 100 mn to the Natural Capital Fund.

Future fundraising plans: CAM has already allocated much of the raised capital and expects to resume fundraising in 2025, the newswire writes. The firm’s success is partially driven by nature-related reporting obligations, such as the Taskforce for Nature-related Financial Disclosures (TNFD), which is encouraging more institutional investors to enter the growing nature asset class.

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CIRCLE YOUR CALENDAR-

Egypt will host the Portfolio Egypt conference on Monday, 30 September in Cairo. The event aims to enhance cooperation among Arab stock exchanges and will cover crucial topics including market integration, product diversification, carbon markets, and regional debt markets. It will aim to outline recommendations to strengthen regional financial markets.

Egypt will host Cairo Sustainable Energy Week from Tuesday, 1 October to Thursday, 3 October in Cairo. The event will bring together policymakers, companies, and experts to discuss collaboration on the renewable energy transition across 17 Arab countries.

The UAE will host the World Green Economy Summit from Wednesday, 2 October to Thursday, 3 October in Dubai. The summit will promote the push for a green economy and will offer a platform for international entities to collaborate on sustainable development, financing, and policymaking.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.