Rethink° November
What the COP? COP has started, we did some math, and it seems to us that the numbers do not add up. Spoiler alert: Climate relief should equal climate damage, but it doesn't.
As you guessed it we look at different controversies around COP28, especially the new Loss and Damage fund, we are then travelling to Madagaskar, but be warned - it is about to get hot. Lastly we are looking at a new way to make money for some journalists and the impact of poverty on greenhouse gas emissions. Let’s get started.
What’s going on at COP?
On Thursday, 30th of November, the 28th United Nations Framework Convention on Climate Change, 28th Conference of the Parties or short COP28 started and reading about it is a roller coaster ride for me. 🎢
Where money is coming from
The first headline that caught my attention was the following: Most sponsors of COP28 have not signed up to UN-backed net-zero targets.
📰 Teaser: Only one of the more than 20 sponsors of Cop28 has signed up to UN-backed net-zero science-based targets, (SBTi), according to an analysis.
Most of the corporate sponsors, which include the oilfield services company Baker Hughes as well as Bank of America, have made no commitment to reduce emissions to net-zero in any time period under the target system.
The global accountancy firm EY, formerly Ernst and Young, which has been hired as the independent verifier of the climate record of all the sponsors, has also not set targets with the net-zero scheme. Continue Reading (→ Guardian; 3 min)
🤔 Moritz’ two cents: This comes as no surprise, but still feels de-illusionary. I mean, a climate conference whose president is also CEO of the national oil company of Abu Dhabi (IEA) is set up for contradictions — to put it diplomatically. I would fully agree that for a global and climate just transition, no party should be left out, especially no party as powerful as the oil & gas industry. On the other hand, I doubt that any ambitious progress in reducing emissions can be achieved if the whole theme is so deeply in the pockets of the industry that is at the cause of it. Can we trust big tobacco that they will actively reduce the number of smokers? Can we trust Social Media companies that they’ll help us to prevent social media addiction? Or as for COP28 - can we trust big oil to stop burning oil? I doubt it.
Where money is going
“COP Reaches Breakthrough Agreement on New “Loss and Damage” Fund for Vulnerable Countries” or even “COP agrees to establish loss and damage fund for vulnerable countries”
🤔 Moritz’ two cents: Do you see the difference? It’s precisely a year. The first headline talks about COP27 and the second about COP28. So let’s figure out what’s new this time, or whether it is simply the old hiding under the cloak of the new.
Brief explanation before we go into the brief analysis: The fund is a pragmatic instrument to help mitigate not climate change but the effects the climate change has and will have, primarily on developing countries who will not be able to cover the cost of coming damage. It’s kind of a relief-payment from the countries who caused the damage to the countries who experience them. To give you a quick anchor: the cost of climate related disasters from 2016 to 2018 were an estimated US$650 Bn globally. Keep that figure in mind (ECIU; CNBC)
So after re-reading last year’s article, I cannot but play the groggy reader of this year’s headline, why? In short, they decided to set up the fund at COP27 and agreed to decide anything else (funding, operationalization) this year at COP28 (UNFCC). This year, some countries then started with what they agreed to come up with: They’re funding pledges. On December 1st, the EU provided an initial pledge of US$245 million to the fund, including US$109 million from Germany. The United Arab Emirates also pledged US$100 million, while the UK offered approximately US$51 million, the US provided roughly U$17.5 million, and Japan contributed US$10 million in smaller amounts. (Amnesty).
So congrats, some did know they had homework to do and presented it. But do you remember the figure we looked at before? US$ 650Bn cost of climate related disasters for 3 years. If climate disasters were spread out equally over the three years, the current fund volume could have covered roughly the cost of one hour. The other 2 years, 364 days and 23 hours of climate disaster, well… to be evaluated at COP29?
🤔 Max’ two cents: While the set-up of the LDF is laudable, it remains to be seen if sufficient funding is providing in due time. Only with a three-year delay, rich countries achieve their commitment to provide US$ 100 bn per year in general climate finance to LMICs (Low- and Middle-income Countries) in 2023. For the fund at least an additional US$ 100 bn will be needed for it to be effective. Raising this amount of money, and being able to distribute it effectively, poses a significant challenge. On the one hand, funders want to see stringent selection criteria, and reporting on use of proceeds to warrant their contributions. On the other hand, too cumbersome processes increase administrative costs for the fund and recipients, delaying disbursement, as has been the case with the much smaller Green Climate Fund (GCF).
In addition, questions remain on how to achieve an equitable governance structure. Initially, the fund will be hosted by the World Bank, which has notoriously high administrative costs (up to 24%!). Furthermore, rich countries hold most decision-making power on this institution, which is why advocates for the LDF argued that it should be set up under the UNFCCC (United Nations Framework Convention on Climate Change).
The LDF and various ways of adequately funding it (and other climate finance facilities) remain a center stage topic at COP28 and very contentious. I doubt that meaningful progress will be reached by the end of COP28. This is not to imply that it will be a failure. Let’s just be realistic about our expectations, in light of the contentious nature of climate justice, large amounts of funding required, and the simmering issue of an outdated classification of industrialized (Annex I) and developing countries (Annex II). The classification was made under the Kyoto Agreement in 1992 and simply does not reflect reality anymore, given economic development since then.
“Climate change is a problem created and worsened by the richest countries and companies, but the poorest are suffering the most. At Cop28, we need commitments from developed countries to deliver finance to the loss and damage fund.” - Dr. Friederike Otto (Imperial College London)
In short, a lot remains to be done to scale climate finance in its many forms, and in particular on the LDF. At least some progress is being made, and rigorous scientific advances in attribution science support the case for science-informed loss and damage mechanisms. More on this in the next article.
Madagascar, highly vulnerable to underreported extreme heat that would not have occurred without human-induced climate change
📰 Teaser: Madagascar experienced its hottest October ever in 2023, shattering temperature records. African countries often fail to report extreme heatwaves, leaving highly vulnerable populations unaware of the dangers. Sub-Saharan Africa severely underreports heatwaves, leading to a lack of awareness about the risks of extreme heat. Without necessary investments in adaptation, heat-related mortality is projected to increase fourfold by 2080. Continue Reading (→ World Weather Attribution; 5 min)
🤔 Max’ two cents: The lackluster progress on the Loss and Damage Fund (LDF) to support climate adaptation in low- and medium-income countries (LMICs) contrasts starkly with the growing vulnerability (rapid urbanization, sprawling informal settlements, inadequate health systems to name a few factors) and increasing intensity of extreme weather events. Madagascar is just one recent example where we have scientific certainty on the contribution of human-induced climate change to the occurrence of extreme weather events. World Weather Attribution by Imperial College London provides excellent information on attribution science and plenty of timely case studies that illuminate our current knowledge of the effects of climate change and weather extremes. Continue Reading → (World Weather Attribution, 5 mins)
US media veterans back new trading firm with financial news arm
📰 Teaser: A group of veteran US financial journalists is teaming up with investors to launch a trading firm that is designed to trade on market-moving news unearthed by its own investigative reporting.
The business, founded by investor Nathaniel Brooks Horwitz and writer Sam Koppelman, would comprise two entities: a trading fund and a group of analysts and journalists producing stories based on publicly available material, according to several people familiar with the matter.
The fund would place trades before articles were published, and then publish its research and trading thesis, they said, but would not trade on information that was not publicly available. Continue Reading (→ FT 2min)
🤔 Moritz’ two cents: I discovered the article through a post by John Stanley Hunter. Here is his post, nothing to add to that.
Ending extreme poverty has a negligible impact on global greenhouse gas emissions
📰 Teaser: Assuming historical energy- and carbon-intensity patterns, the global emissions increase associated with alleviating extreme poverty (US $2.15 per day) is modest, at 2.37 gigatons of carbon dioxide equivalent per year or 4.9% of 2019 global emissions. Lower inequality, higher energy efficiency and decarbonization of energy can ease this tension further: assuming the best historical performance, the emissions for poverty alleviation in 2050 will be reduced by 90%. This study finds only a modest impact on emissions from ending extreme poverty, suggesting poverty alleviation should remain a priority. The real climate challenge is providing decent living standards sustainably.
🤔 Max’ two cents: This is a longer read, but the main message is that poverty alleviation and climate change mitigation do not contradict themselves, as much as one might initially think. Yes, emissions will increase a bit, but even by following current economic growth modes the increase is rather small. It highlights that by relying more on the new, energy-efficient technologies for such growth, emissions associated with poverty alleviation could be reduced drastically. In this newsletter, we do not get tired of deconstructing the green growth myth, and as the authors highlight, it just as much about redistribution as it is about economic growth when it comes to poverty eradication. Continue Reading (→ Nature, 20 min)
📚 Rethink° Book Club
Please share with us what you are reading.
Moritz: I am reading the novel “Jaffa Road” by Daniel Speck. It is a German novel and I could not find whether it has been translated to English yet. The novel takes the reader back to the years after the second world war to the founding years of the state of Israel. It is not only a great story to read, but also manages to show the different sides of the conflict. I can only recommend it.
Max: I just finished “Attack Surface” by Cory Doctorow. I came across it by chance while going through the flood of newsletters that I subscribed to over the years. I was looking for some light entertainment while fending off some virus infection. It is an entertaining, dark cyber novel, that represents the current state of hacking and vulnerability in our digital sphere. If you are looking for entertainment that motivates you to improve your IT security routine, this book is for you.
Send us your recommendations, and we’ll list the highlights: me@mjmey.com
Stand with humans
Moritz: We had not given any takes on the war in Israel/Gaza, as we have not given any on other wars so far. I don’t feel the need nor as having the expertise to express any (semi-)public opinion, but I wanted to share this video made by Shahak Shapira. Watch now → (2 min 55 sec)
Not yet enough? Here are some evergreens and recent content we came across:
🎧 Outrage and Optimism on climate policy and action by the chair of the Paris Climate Agreement Christiana Figueres, Tom Rivett-Carnac and Paul Dickinson.
🗞️ The ESG on a Sunday newsletter is for everyone who wants to keep up with developments in sustainable finance.
🛢️ More on COP? Inside the campaign that put an oil boss in charge of a climate summit
🎥 Water Bear is a non-profit movie platform focused on advancing activism, as a Netflix for impact.
📔 Any open questions on degrowth? You might find an answer in this book: “The political economy of degrowth” with 850+ pages by Timothée Parrique.
📅 Rethinking is timeless. Read or listen to October’s issue.
Have you encountered something we might want to read/listen/watch? Please send it to us or leave a comment.
We hope you enjoyed it. Please comment, subscribe, and share.
All the best, and keep rethinking,