Good morning, folks, and welcome to a busy Monday as COP 29 kicks off in Azerbaijan today amid challenges on its agenda. We also have a rundown of where green stocks are in the wake of the US presidential election last week. Let’s dive right in.

THE BIG CLIMATE STORY OUTSIDE THE REGION- 2024 is on track to be the hottest year on record as global temperatures are expected to surpass 1.5°C above pre-industrial levels for the first time, according to a report by the EU’s Copernicus Climate Change Service. Over the past year, the global average temperature was 1.62°C above pre-industrial levels, just 0.02°C below the highest-ever recorded 12-month anomalies of 0.76°C in mid-2024. The projections suggest temperatures could exceed 1.55°C above pre-industrial levels by year-end.

The grim outlook is expected to be a focal point at COP29: “This marks a new milestone in global temperature records and should serve as a catalyst to raise ambition for the upcoming climate change conference,” Dr. Samantha Burgess, deputy director of the Copernicus Climate Change Service, said.

The story made headlines in the international press: AP | Reuters | The Guardian | The NewYork Times | Washington Post | CNN | BBC | Euronews | The Independent

COP29 SCHEDULE-

IT’S KICK OFF TIME- 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

WHAT TO EXPECT TODAY-

The first day of the world’s biggest climate summit is set to include plenary meetings that will vote on the summit’s agenda and discuss a progress report on financing. It will also be a chance for different country blocs and NGOs to hold coordination meetings in preparation for the rest of the summit. A number of side events and pressers by different participants is also scheduled.

REMEMBER- A China-led group wants climate-related trade barriers added to the COP29 agenda, and the rules require consensus on the agenda. The group, known as BASIC, argues that developed countries are introducing trade barriers on climate-related grounds that are harming developing nations. The group made a specific reference to the EU’s carbon border tax in its request to COP. A lack of consensus can derail the summit’s planned schedule for high-stake talks on finance and climate targets amid alarming climate milestones and global political whirlwinds.

THE CURRENT STATE OF PLAY-

#1- Worries of leadership vacuum: German Chancellor Olaf Scholz and Dutch Prime Minister Dick Schoof both canceled plans last-minute to attend COP29 as they face different political troubles at home, Bloomberg reported on Thursday. They both join a list of several world leaders from major economies, including US President Joe Biden, EU Commission President Ursula von der Leyen, and Brazilian President Luiz Inácio Lula da Silva, who will also be missing from the summit. Biden’s absence is chalked up to the US presidential election, while von der Leyen remains in Brussels due to political transitions within the European Commission. Lula recently withdrew after a head injury.

#2- Trump’s election also casts its shadow: The prospect of the US becoming a non-player in the global green transition in the next few years will cast its shadow during the summit, and attendees would be required to reckon with alternative pathways without the US, reports The National citing several officials attending this year’s COP.

#3- Key topics at COP29:

  • Climate finances for developing
  • A key issue would be agreeing on a New Collective Quantified Goal for climate financing
  • The transition away from fossil fuels
  • The establishment of rules for carbon markets.
  • The loss and damage fund’s structure and contributions
  • The new wave of countries’ Nationally Determined Contributions (NDCs) and pledges whose deadline is next February
  • Enhancing transparency through Biennial Transparency Reports, which detail countries’ progress in meeting climate goals and their financial needs

You can read more on COP29 in our crash course here.

OTHER NEWS FROM COPLAND

COP29 official caught discussing fossil fuel agreements: A secret recording by human rights group Global Witness captured COP29 CEO and Azerbaijan’s Deputy Energy Minister Elnur Soltanov discussing potential oil and gas agreements with a man posing as an investor. BBC reports that Soltanov “appears to have used his role” at COP’s leadership to promote potential oil and gas investments in Socar, Azerbaijan’s state-owned oil and gas company.

COP’s code of conduct expects the summit’s officials to abstain from doing business during the COP process. Christiana Figueres, former head of the UN climate body, called Soltanov’s actions a “betrayal” of the COP mission.

REMEMBER- Azerbaijan has faced criticism for hosting COP29: There has been widespread criticism over Azerbaijan being chosen to host COP29 as a country dependent on oil production. Some 90% of Azerbaijan’s export revenues, and between 30-50% of its GDP, come from its oil and gas sector. BP and other oil giants have also been investing in the country, transferring some USD 35 bn worth of oil and gas production to Azerbaijan since 2020, according to Global Witness.

The World Health Organization (WHO) issued a call for global leaders to end fossil fuel reliance and prioritize health in climate adaptation and resilience strategies, according to a statement released Thursday. WHO highlighted the urgent need to integrate health as a core measure of climate success, framing the climate crisis as a direct health crisis and highlighting key related interventions, including ending fossil fuel subsidies, mobilizing funds to make health systems climate-resilient and disaster-ready, and investing in proven solutions, such as heat-health warning systems and household-based clean energy.

WATCH THIS SPACE-

#1- UAE’s Hodler + China’s GCL partner on Ethiopian energy project: Hodler Investments is partnering with Golden Concord Group’s subsidiary GCL Energy Investment to develop a distributed energy infrastructure project in Ethiopia aimed at powering next-generation compute cluster data centers for AI, blockchain, and other applications, according to a press release.

The details: The companies will co-invest in energy projects that use energy optimization and sustainable technologies. The collaboration aims to use Hodler Investments’ digital energy platform, PermianChain, and GCL Group’s critical infrastructure tech to monetize wasted energy sources while reducing the country’s emissions. The project is set to power AI and blockchain data center infrastructure and follows Golden Concord Group’s agreements with the Ethiopian government to explore natural gas in the Ogaden Basin.

#2- Egypt sets rates for stored solar energy: Egypt’s Electricity Ministry priced energy produced from solar and battery storage projects at USD 2.3 per MWh for projects set up by private investors under a build-own-operate (BOO) contract and USD 1.4 per MWh for projects where the government owns the solar plants while investors provide storage, Al Mal reports, citing unnamed government sources..

Why now? Egypt currently has a few solar and battery storage projects in the works, most notably Emirati AMEA Power’s 1 GW solar power plant with 600 MWh battery storage system in Benban — expected to be the continent’s largest. Masdar, Hassan Allam Utilities, and Infinity Power are also working on a solar project, which will have a capacity of 1.2 GW of energy and 240 MW/hour of storage batteries, and Norway’s Scatec also have 1 GW and 200 MWh project plant planned in Nagaa Hammadi, Qena.

IN OTHER EGYPT NEWS- Egypt will launch its mining portal by the end of the year, the country’s Oil Ministry said in a statement last week. The digital investment platform will streamline investors’ access to data and act as a catalyst for mining investment. The ministry is also reportedly preparing to launch a new bid for mineral exploration soon in several areas in the under-explored Western Desert, with the hope to expand the mining sector’s contribution to the GDP to 5% from 1%.

#3- Africa’s financial sector is especially vulnerable to climate risks, says EIB: Africa is one of the regions most vulnerable to the adverse physical effects of climate change in the world, according to a European Investment Bank finance report (pdf) that measured Climate Risk Scores. Some 34% of the banks assessed in the survey reported asset quality deterioration due to extreme weather events, with 93% singling out SME borrowers as the most impacted.

The nuance: The report says that the physical climate risks facing the continent are more chronic than acute, meaning that higher temperatures, drought, and rising sea levels are the main drivers for financial risks rather than acute events, such as floods and hurricanes. These chronic risks especially have agricultural or productivity effects rather than damage to physical assets, the report added.

Africa is bracing for a rough transition: Last week, Moody’s estimated that Africa needs to close major funding gaps of USD 131 bn and USD 22 bn for mitigation and adaptation, respectively, with potential GDP losses of 30% expected by 2050 in Sub Saharan Africa under the world’s current green transition trajectory.

#4- Green stocks are still reacting to Trump’s re-election: Three major US stocks — all solar — are emerging as especially vulnerable to a Trump repeal of the Inflation Reduction Act (IRA), which would effectively cut tax credits for green projects, CNBC reported last week.

The rundown: Array — which is forecast to receive USD 80 mn in domestic manufacturing tax credits in 2026 — fell by nearly 21% on Wednesday and remained in the same territory until trading closed on Friday. First Solar — set to book USD 2 bn in IRA tax credits in 2026 — tumbled about 19% after Trump’s victory before partially recovering and closing on Friday with gains that limited the stock’s net decline to around 10% compared to pre-Trump-victory rates. SolarEdge — expected to receive USD 164 mn in IRA tax benefits in 2026 — was the hardest hit, netting a 29% drop in stock value between Wednesday and Friday.

Hedging against renewables is paying out: Investors who had placed hedges against renewable energy stocks have pocketed over USD 1.2 bn, the Financial Times reported on Friday, citing data from S3 Partners. Hydrogen producer Plug Power and solar firm Sunrun — Both heavily shorted — fell 22% and 30%, respectively, allowing short sellers to pocket about USD 350 mn. Sunrun also dropped another 12% on Friday.

You can go deeper on why Trump’s reelection threatens green policy in our handy explainer.

But it’s not all bad: US renewable fuel credits — called Renewable Identification Numbers (RIN) — reached multi-month highs on Friday despite the concerns regarding Trump’s re-election, Reuters reported on Friday. The increase in RIN prices benefits US biofuel producers who rely on them to handle high output costs.

What are RINs? They are part of a Bush-era environmental mandate that requires refiners to include bio and low-carbon fuels in transportation fuel mixes or buy credits from other refiners.

THE SCORECARD-

Deforestation in Brazil’s Amazon Rainforest decreased by 30.6% in the 12 months through July, marking the lowest level since 2015, Reuters reported last week. Still, approximately 6.3 sq km of the Amazon were destroyed. Deforestation in the neighboring Cerrado savanna also dropped by 26% to 8.1k sqkm, the lowest since 2020. The shift in Brazil’s green surfaces’ fortune came with President Luiz Inacio Lula da Silva’s return to power nearly two years ago, on the heels of pledges to reverse his predecessor’s anti-environment policies that saw deforestation rates peak. Lula has pledged to end deforestation by 2030 and has hired 800 new federal environmental agents to bolster these efforts.

Deforestation in the rainforest broke a 15-month decline when rates increased in July. Approximately 666 sqm of jungle were cleared, a 33% rise compared to the same month last year. The increase was attributed to a strike by environmental workers, climate change-induced droughts and fires, and the municipal election year, which typically sees higher deforestation rates.

Global solar capacity reaches 2 TW: Global solar capacity has reached a historic 2 TW, driven by rapid growth over the past two years, surpassing all added capacity in the previous 68 years, the Global Solar Council told Reuters on Thursday. Some 40% of this added capacity comes from rooftop installations, whereas the training 60% comes from traditional ground-mounted farms. The new data includes often-overlooked rooftop installations, providing a first-of-its-kind comprehensive view of solar capacity worldwide, the council said.

Hitting 8 TW solar capacity by 2030 is possible: The sector is on its way to bolstering solar power supply, with the data suggesting that achieving an 8 TW capacity is possible, which would account for 70% of the COP28 target of added renewables’ capacity of 11 TW.

The industry group has plans for COP29: The council plans to launch an International Solar Finance group to attract financing, especially in emerging markets, with the goal of lowering capital costs to an average of 5% instead of 15%.

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