Good morning, ladies and gentlemen. We have a busy Monday issue for you, with plenty of debt news — albeit not from COP16, which wrapped on a disappointing note — as well as a slew of additional agreements Morocco and France signed during French President Emmanuel Macron’s visit to the country.

^^ We have chapter and verse on these stories and more in this morning’s news well, below.

THE BIG CLIMATE STORY OUTSIDE THE REGION- Flash floods that hit eastern and southern Spain last week claimed at least 205 lives, making them the deadliest Europe has seen in over 50 years. The heavy rain began last Monday, seeing several months’ worth of rainfall in less than a day, causing some of the deadliest floods in decades. Entire villages were submerged, roads turned into rivers of mud, and power outages affected many areas.

What experts said: Adaptation to heavier rainfall is essential to prevent future disasters, but experts are increasingly warning that adaptation is fast becoming unfeasible. Some pundits have raised concerns about countries’ abilities to adapt for similar storms in the future — which would result in flooding anywhere with “impermeable ground” — as well as setting up early warning systems. Adaptation could be implemented by “reducing the volume and speed of run-off can be done by replanting upland areas and improving soil health, as well as increasing the capacity of urban areas to absorb, hold or disperse water,” one expert said.

A lot of lives are on the line: Scientists have consistently demonstrated how climate change intensifies and increases the frequency of extreme weather events. Recent examples — including catastrophic flooding in Sudan, Nigeria, Niger, Chad, and Cameroon — claimed over 2k lives and displaced mns. Similarly, Nepal experienced torrential rains that resulted in at least 244 deaths. Earlier this year, floods in southern Brazil led to over 169 fatalities.

The story made headlines in the international press: AP | Reuters | Bloomberg | The Guardian | CBS | The NewYork Times | CNN | BBC | ABC

HAPPENING TODAY-

Egypt is hosting the World Urban Forum from today to Friday, 8 November, in Cairo. The forum, established by the UN and one of its largest non-legislative events, will center around the effect of rapid urbanization on communities, economies, climate change, and policies and will bring together government representatives, academics, business people, urban planners, and more.

HAPPENING THIS WEEK-

South Africa will host the Critical Mineral Africa Summit from Wednesday, 6 November to Thursday, 7 November, in Cape Town. The summit aims to attract critical minerals investment to the continent and will be held alongside African Energy Week. The summit will be held in partnership with the Southern African-German Chamber of Commerce Partners representing Germany’s increasing investments in southern Africa.

COP WATCH-

COP16 wraps without finance agreement: Countries were unable to come to a consensus on biodiversity funding mechanisms and commitments at COP16 in Cali, with the EU, Switzerland, and other developed countries coming in with objections in the 11th hour, Bloomberg reports. Talks went into overtime, lingering into Saturday morning — 12 hours longer than planned for the summit, until COP16 President Susana Muhamad adjourned the plenary session due to lack of quorum after several delegates departed to catch flights. Talks will resume next year during an interim meeting planned in Thailand, according to the Guardian.

REMEMBER- Financing was always a point of contention: Developing nations entered COP16 wanting more grants and fewer loans and establishing a new fund under the UN instead of the World Bank-linked Global Environment Facility’s Global Biodiversity Framework Fund, which they believe is hard to access and too “controlled by wealthy nations.” Meanwhile, developed countries wanted to stick to the current funding mechanism and resisted committing to debt-sensitive funding mechanisms.

Who said what: The EU couldn’t agree to a new fund that the bloc saw would only be “further fragmenting the biodiversity finance landscape,” a spokesperson said, while some donor countries saw that a new fund would see financial leakage due to the administrative costs associated with its setup. Still, advocacy groups expressed their frustration with the lack of progress on funding and the lack of certainty that “governments will work together to deliver.”

Financing was already falling short of 2022 pledges: The 2022 framework asked wealthy countries to contribute an annual USD 20 bn for developing countries’ efforts by 2025 — to be raised to USD 30 bn by 2030. As of 2022, only USD 15.4 bn has been mobilized, Bloomberg reports. No data is available for 2023 and 2024.

MEANWHILE- The EU unveiled an additional EUR 160 mn of biodiversity financing to different biodiversity programs, including a EUR 69 mn package to support the knowledge production and capacity building for Africa, Asia, Latin America, and the Caribbean to improve their ability to mobilize domestic and international finance, according to a press release. The bloc also earmarked EUR 48 mn for a program combating wildlife trafficking and EUR 40 mn to support biodiversity conservation efforts in high seas.

And genetic sequencing levies are happening: The last day of COP16 saw delegates finalizing an agreement for the Cali Fund, which will gather money from large companies and organizations that commercially benefit from the DNA sequencing of different natural organisms, the New York Times reports. The fund, which plans to set companies’ contributions at either 1% of net income or 0.1% of revenues, will be used to finance conservation efforts in biodiversity-rich countries and could raise up to USD 1 bn per year.

But there’s a catch: Opting in would be voluntary for the targeted companies, according to the final draft of the agreement, the Gray Lady reports. Countries may require national legislation to force companies to comply.

Even though it’s voluntary, corporates are less than thrilled: Industry groups, including in pharma and agriculture, were fighting back against the levy proposal on the use of digital sequence information last week. European companies argue that imposing a levy would raise prices for consumers, “disincentivize innovation,” and put them at a disadvantage to US rivals because the US did not sign onto the Convention on Biological Diversity (CBD).

REMEMBER- Traditionally, scientists would pay the country of origin to export genetic samples, but as technology makes exchanges easier and allows exporters to take a permanent “digital fingerprint” of the samples, effectively sidestepping origin countries. Biodiversity-rich countries entered this COP with a mission to change the current system that they called “biopiracy” .

IN OTHER COP16 NEWS- Colombia and 20 other countries — including Mexico, Sweden, Uganda, and Chile but none from Asia-Pacific — formed a coalition seeking to make “peace with nature,” Reuters reported last week. Members must agree to a set of principles aimed at living harmoniously with nature that include international cooperation and mobilizing money for conservation and sustainable development.

And indigenous groups got a W: Indigenous groups will have more of a say in future nature conservation decisions with the establishment of a new specialized subsidiary body under the Convention on Biological Diversity (CBD), the Associated Press reported. The body recognizes and protects Indigenous traditions and knowledge regarding biodiversity management. Two co-chairs will be elected by COP — one nominated by the UN and another nominated by representatives of Indigenous peoples and local communities, with at least one chair coming from a developed country.

COP29 SCHEDULE-

YOUR GUIDE TO COP- COP29 is starting next week. Here’s a handy guide (pdf) for the main thematic days and what to expect and a full rundown of all the panels, workshops, discussions, debates, and keynote speeches.

DAYS TO LOOK FORWARD TO-

12-13 November: World Leaders Climate Action Summit

14 November: Finance, Investment and Trade

15 November: Energy, Peace, Relief and Recovery

19 November: Food, Agriculture and Water

21 November: Nature and Biodiversity, Oceans and Coastal Zones

22 November: Final Negotiations

International Monetary Fund chief Kristalina Georgieva will attend COP29 virtually, marking the first time in four years she won’t attend in person, Bloomberg reported on Thursday. Georgieva will instead travel to Peru for an Asia-Pacific Economic Cooperation forum, an IMF spokesperson shared. Other major business players are also skipping the summit.

Biden is missing out, too: US President Joe Biden will skip COP for the second year in a row, Bloomberg reports. Senior presidential adviser for international climate policy John Podesta will instead head the US delegation at the summit. US presidents aren’t consistent attendees of annual UN summits.

WATCH THIS SPACE-

#1- Saudi Arabia’s Oxagon closes in on solar and wind factories: Neom’s floating industrial complex Oxagon is in advanced talks with two unnamed companies to develop three factories for solar panel components and wind turbines in early 2025, Asharq Business reported Thursday, citing comments made by CEO Vishal Wanchoo.

And Neom will begin producing green hydrogen in 2026: NEOM’s green hydrogen plant , developed in partnership with Acwa Power, American chemical company Air Products, and NEOM, is projected to start production by late 2026, Wanchoo said. Oxagon will also establish a university focused on energy transition research and a training academy to develop industrial talent.

IN OTHER SAUDI NEWS- DataVolt to develop a green data center in KSA: Saudi tech company DataVolt is set to reveal a USD 3.5 bn sustainable data center in Saudi Arabia by year-end, the company’s CEO Rajit Nanda told Asharq Business (watch, runtime: 8:54) last week. The company will fully fund the project in its initial development phase — set to begin in 2Q 2025 — before seeking foreign direct investment through partnerships. The company plans to invest a total of USD 5 bn in sustainable data centers in Saudi Arabia, Chairman Paddy Padmanathan told Asharq earlier this year.

The company is also active elsewhere: DataVolt signed an agreement earlier this year with the Uzbekistan government to develop a USD 150 mn green data center with a total capacity of 10 MW. DataVolt also has offices in California and Abu Dhabi .

AND- Renewables giant Acwa Power could invest up to USD 5 bn in Vietnam, Vietnamese news agencies quote an unnamed Acwa executive as saying (here and here). The executive made the statement during a meeting in Riyadh between Investment Minister Khalid bin Abdulaziz Al Falih, Saudi business representatives, and Vietnamese Prime Minister Pham Minh Chinh. No details were provided on the specific sectors or timeline for the potential investments.

#2- Egypt is working on a national circular economy strategy: Egyptian Environment Minister Yasmine Fouad launched public consultation sessions to discuss the development of the country’s circular economy strategy, according to a statement last week. Central to this strategy is linking circular economy practices to biodiversity protection, modernizing the waste management infrastructure, and including industrial sectors, such as textile, in the effort, the statement added. The strategy is being developed in collaboration with the EU-funded EU-Green project, the National Solid Waste Management Program, and other development partners.

#3- Adnoc, Masdar, and Microsoft have jointly released a report highlighting the transformative potential of AI for the clean energy sector, according to a statement published last week. AI applications have the potential to make energy operations and grid connections more efficient, and AI-driven energy demand could stimulate the innovation of carbon-free energy solutions, the report claims. Out of the surveyed 400 leaders from the technology, energy, and finance sectors, around 92% believe AI will significantly improve energy efficiency by 2030, and 97% expect AI to play a central role in developing new energy solutions by 2050.

IN OTHER AI NEWS- AI is beating green tech startups to investor funds: Generalist investors are increasingly shifting their focus from climate tech to AI, exacerbating funding challenges for green startups, Bloomberg reported last week. Climate-tech companies raised approximately USD 10.3 bn during the third quarter, with full-year funding expected to drop by about 50%, while AI startups secured over USD 21 bn in the same period, according to Pitchbook data cited by Bloomberg.

Scaling new AI is perceived as less risky than scaling new green tech: The trend highlights the growing appeal of AI over climate tech, driven by the perceived lower risk and higher potential returns. Several green tech startups are in the capital-intensive territory of scaling up “never-before-deployed” tech for commercial use, which many investors prefer to avoid unless policy support addresses the uncertainties and underlying risks, reports Bloomberg.

[wwtt4] #4- BYD steals Tesla’s crown, again: Chinese EV manufacturer BYD outpaced Tesla in quarterly sales, reporting record revenue of CYN 201 bn (USD 28 bn) for 3Q 2024, Reuters reported last week. The company’s aggressive investment in research is projected to reach USD 6.5 bn in 2024, nearly 50% higher than Tesla. BYD’s diverse product range and growing local demand have contributed to its growth, reports Reuters.

Not the first dethroning: BYD saw a significant surge in 4Q 2023 sales , allowing it to boot EV giant Tesla from the top spot on industry leaderboards for the first time last year. BYD sold a record 526k vehicles in 4Q 2023 alone, with sales rising 70% in December. Meanwhile, Tesla delivered 484k in 4Q — more than the 473k vehicles expected by analysts — but it still wasn’t enough for Elon Musk’s company to keep leading the EV pack.

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