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Good morning, friends. We have a mixed bag of news today, although it’s a big day for Turkish renewables, with a USD 1 bn financing and 1.2 GW tenders for wind projects. Things are less rosy for biodiversity enthusiasts, following another disappointing day at COP16.
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THE BIG CLIMATE STORY OUTSIDE THE REGION- The concentration of greenhouse gasses in Earth’s atmosphere hit an all-time high in 2023, driven primarily by sustained fossil fuel use and intensified wildfires, according to a World Meteorological Organization report (pdf). CO2 levels rose to 420 parts per mn (ppm), a 51% increase from pre-industrial levels. Methane and nitrous oxide levels also surged by 165% and 25%, respectively, compared to pre-industrial levels. WMO Secretary-General Celeste Saulo called the findings an “alarm bell” for decision-makers, as these levels put the Paris Agreement’s target of limiting warming to 1.5°C in jeopardy.
Emissions have slowed, but CO2 concentration remains high: Despite a slowdown in emissions growth over the past decade, atmospheric concentrations of CO2 continue to climb to unprecedented levels, posing risks of climate feedback loops, such as hotter oceans absorbing less carbon. Climate experts stress that stronger carbon sinks and substantial investment in emissions reduction — estimated at USD 1-2 tn annually — are essential to avoid crossing critical warming thresholds. “Current national climate plans fall miles short of what’s needed to stop global heating from crippling every economy, and wrecking billions of lives and livelihoods across every country,” Executive Secretary of the UN Framework Convention on Climate Change Simon Stiell said.
The story made headlines in the international press: Washington Post | Axios | BBC | UN News | CBS | Reuters
HAPPENING TODAY-
Saudi Arabia’s Future Investment Initiative Conference kicked off yesterday in Riyadh and is set to conclude on Thursday, 31 October. The conference gathers entrepreneurs, political leaders, and decision-makers to explore investment options in AI, sustainability, energy, and more.
COP WATCH-
Global Biodiversity Framework Fund bags USD 163 mn: Eight governments — including Austria, Denmark, France, Germany, New Zealand, Norway, the UK, and Canada’s Quebec province — committed an additional USD 163 mn for the Global Biodiversity Framework Fund (GBFF) at COP 16, according to a press release. The new funders joined the fund’s early contributors: Canada, Japan, Luxembourg, and Spain.
The breakdown: The size of the contributions per government varies, with USD 3.2 mn coming from Austria, USD 14.5 mn from Denmark, USD 5.4 mn from France, USD 54.1 mn from Germany, USD 12 mn from New Zealand, USD 13.7 mn from Norway, USD 58.4 mn from the UK, and USD 1.4 mn from Quebec. In 2023, Germany had already contributed EUR 40 mn and the UK had pitched in GPB 10 mn, while Quebec is the first sub-national government to commit to the fund.
Nature advocacy groups say numbers are still falling short: While the new commitments bring the GBFF’s account to USD 400 mn, it still is far off the initially targeted bns of funding. “We are talking about mns that have been pledged. But what we are expecting are bns,” Reuters quotes Greenpeace’s biodiversity advocate Irene Wabiwa as saying. “When looking at the increased rate of biodiversity loss, the way money is flowing is very, very slow. And we are very scared,” she said.
REMEMBER- Developed countries pledged to contribute USD 20 bn annually for conservation efforts under the 2022 Kunming-Montreal Global Biodiversity Framework. It is estimated that up to USD 824 bn would be needed annually to protect and restore nature by 2030, far above the current USD 143 bn annual spend of 2021, according to the UN’s Biodiversity Finance Initiative (Biofin).
About the fund: Established at COP15, the GBFF aims to garner financing to support the implementation of the Kunming-Montreal Global Biodiversity Framework. It received an initial grant of CNY 1.5 bn (USD 220 mn) from China.
First review of global progress towards the Kunming-Montreal Global Biodiversity Framework released at COP16: The Protected Planet Report is officially out, marking the first global stocktake on progress towards achieving Target 3 of the Kunming-Montreal Global Biodiversity Framework. Target 3 aims to protect 30% of the planet’s oceans and lands by 2030 under the tagline 30×30 while being equitable and respectful to indigenous and local communities.
The findings: Progress needs to be accelerated, the report says. Only 17.6% of terrestrial and inland waters and 8.4% of marine and coastal areas are protected, with over two-thirds of Key Biodiversity Areas not being partially or fully protected. 51 countries and territories have gone above and beyond the 30% target on land, and 31 exceeded 30% coverage at sea, but additional coverage of 16.7 mn sq km and 78.3 mn sq km for each realm, respectively, are still needed.
Companies push back against potential genetic samples levy: Industry groups, including in pharma and agriculture, are fighting back against a levy proposal on the use of digital sequence information (DSI), the Financial Times reports. The genetic data from nature is made available on public databases, where companies like AstraZeneca and GSK use it for research and to develop products at no charge, but countries of origin want a share of the income made on these products.
The details of the levy still need to be hammered out: One suggestion championed by a group of African countries was to add a 1% tax on the retail value of all products companies make using DSI. Another more popular proposal would see the companies pay a small percentage of their revenues or net income. Negotiators are still debating the exact rate, whether the levy would be on sales or bottom line, or if it would be voluntary, as developed countries hope.
What the companies are saying: European companies argue that imposing a levy would put them at a disadvantage to US rivals that might not be subject to the same kind of tax, having not signed onto the Convention on Biological Diversity, reports the FT. Some are making the argument that mandatory payments would “disincentivize innovation,” and others, like German pharma and agri conglomerate Bayer, argue that a levy would lead to higher prices for consumers.
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, some countries want changes to the current system that some are calling “biopiracy.”
WATCH THIS SPACE-
#1- UAE’s Esyasoft eyes UK renewables provider Good Energy: Dubai-based and IHC-backed technology group Esyasoft has made an unsolicited takeover proposal to UK-based renewables supplier Good Energy, according to a disclosure. Good Energy is currently evaluating the offer but has not disclosed specific terms. Good Energy’s shares closed up 4.25% yesterday, but were up as much as 22% in intraday trading following the news, The Guardian reports.
What’s next? Esyasoft has until 25 November to confirm its intention to proceed with the offer.
#2- Did Masdar revise its green hydrogen target timeline? Masdar seems to have delayed its goal for green hydrogen production, saying in a statement that it now aims to achieve 1 mn tons by 2034 instead of by its previously set 2030 deadline. The renewables leader said it expects to reach this capacity a decade from now, but did not provide specific reasons for the delay. Initially, half of the production was slated to come out of Abu Dhabi.
#3- Lucid expects sales boost from new SUV model: PIF-backed Lucid Group is expecting a boost in sales with the introduction of its first SUV model Gravity next month, Lucid CEO Peter Rawlinson told CNBC. Gravity will drive a “significant increase” in sales volumes, helping to narrow the company’s losses, he added. The company hopes that the model — priced at USD 94.9k — would outperform its sedan model Air, which has seen modest sales since its launch in late 2021.
Lucid recently got a massive liquidity injection: The company raised USD 1.75 bn earlier this month in a follow-on public offering. The sum included PIF’s Ayar Third Investment — Lucid’s majority shareholder — purchasing an additional 374.7 mn shares in the luxury EV maker via private placement that was part of a follow-on on the company’s public offering.
#4- Net Zero by 2050 needs way more investments: Annual investment in the energy transition needs to rise to USD 3.5 tn to meet the Paris Agreement’s net zero emissions target by 2050, according to a new report by Wood Mackenzie. The report calls for total investments of USD 78 tn by 2025 across various sectors, including upstream, mining, power supply, grid infrastructure, and emerging technologies. The 2025 investment target marks an upwards revision of USD 3 tn from last year’s report.
The report identifies three major challenges: Energy security, geopolitics, and costs. Geopolitical issues, including tariffs on Chinese imports, could slow the transition to clean energy given China’s dominance on cleaner tech’s supply chains thanks to its low-cost products. The report also points to concerns over the growing number of governments and companies slowing down transition plans due to rising costs, warning that the delays would actually make the transition more expensive in the long term.
#5- HSBC demotes sustainability chief: HSBC has removed its chief sustainability officer Celine Herweijer from its executive board as part of an “overhaul” strategy that saw it downsizing its board to 12 members from 16, Reuters reports. Green investors see reason for concern in the move, particularly amid other lenders, governments, and corporates slowing down their climate commitments.
Net zero transition isn’t being scrapped, CEO says: HSBC “remains committed to supporting the transition to net zero,” CEO Georges Elhedery said, but declined to comment on Herweijer’s removal in remarks to Reuters.
DANGER ZONE-
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CIRCLE YOUR CALENDAR-
Egypt will host the World Urban Forum from Monday, 4 November 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.
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.
Azerbaijan will host the United Nations Climate Change Conference or Conference of the Parties (COP29) from Monday, 11 November to Friday, 22 November, in Baku. The annual conference brings together governments, world leaders, and other stakeholders to advance the Paris Agreement and negotiate ways to fight climate change. The United Nations Framework Convention on Climate Change’s objective is to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.”
Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.
