What to expect from COP30

This is Elizabeth. A quick note before we begin. We recorded this episode on Friday morning UK time and talked about the fact that it's been 4 years since governments signed a global pledge to reduce methane emissions. And so we suggested it was unlikely that we would see any big government announcements on methane at COP30. Lo and behold, a few hours later, a coalition of countries including the UK, Canada, Japan, and Norway published a paper pledging to drastically reduce methane emissions in the global fossil fuel sector. They say they will use both market signals and policy measures to achieve near-zero methane from oil and gas by an undetermined date. We'll let you get on with the show now, but after listening, do go to sustainableviews.com to get the full lowdown on what's happening on methane at COP30. Enjoy the show.

Welcome back to Sustainable Views, the podcast looking at sustainability policy and regulation in depth. I'm Philippa Nuttall, editor of Sustainable Views. Today I'm talking to acting deputy editor Elizabeth Meagher and reporter Florence Jones about COP30, the upcoming climate summit that kicks off in Belém, Brazil on Monday. Hi, Lizzie.

Hello.

Hi, Flo.

Hi.

So unfortunately, we're recording this episode from our various offices in London and Brussels rather than Brazil. It was a bit outside our budget to fly off to Belém. But we are, however, keeping a close eye on what's happening over there. And as with every COP, there's going to be a lot going on, both in the main negotiations and in the various side events and discussions, which, as you all probably know, are taking place in different cities within Brazil. But I think it's probably fair to say that all this could be summed up with 3 big themes, which, which could potentially be summarized as forests, finance, and fossil fuels. So I think we'll, we'll try and orientate our debate around that today. And even though COP, The main COP doesn't actually start until Monday. Yesterday and today, so we're recording this on Friday, the 7th of November, we've had the Leaders' COP where leaders from around the world fly in to sort of kick off the event. And yesterday, Flo, there was a big announcement that everybody's been waiting for around forests. Can you tell us a bit about this and exactly what's been agreed?

Yeah, absolutely. So as you say, yesterday President Lula of Brazil launched the Tropical Forests Forever facility. Which is a financial mechanism which is being launched at COP30, although it's been talked about and kind of teased for a long time now. It's being thought by many as being kind of the flagship initiative from Brazil at COP30. They really want it to go well. It's kind of, they've been very public about it. It's a new finance mechanism essentially, which is seeking to drive private finance specifically into the preservation of tropical forests. And the TFF rests on the principle that it's currently more profitable for people living in tropical forest countries, particularly indigenous people and local communities, for them to deforest their lands, bring in agriculture, industry, resource extraction. They can make more money from that than leaving the trees standing. So the idea is that if you shift the balance by giving them some money to leave the trees standing, then it's an incentivization. Process for them to keep the forests. And the way it works is it's an investment fund, so it's seeking to raise $125 billion total, with an initial $25 billion coming from governments to kind of de-risk the portfolio. And the COP30 presidency is hoping that governments will kind of give that money over the course of the conference, and it will perform similarly to any other investment fund. So private investors will get a 5.5% return on their investment over 20 years. Um, it's not clear yet specifically what the fund will be invested into. They've said it will be a diverse portfolio geographically. There are hopes among many that it will be kind of a climate-positive investment fund, um, and there are expected to be exclusions on things like fossil fuels and deforestation-linked investments. And so it's Private investors will get their return. And then on top of that, the idea is that there'll be a total return of around 7.7%, meaning that there's an additional around 2% that will be given back to these tropical forest countries in exchange for leaving the forests and keeping logging below 0.5%. So that's illegal logging. The funding will be delivered at a rate of around $4 per hectare, but that funding is conditional on the performance of the fund as a whole to ensure that those tropical forest countries get their money.

Essentially. Yeah. So I mean, it all sounds quite positive. But we've obviously seen funds like this being set up in the past, we have the Loss and Damage Fund a couple of years ago for climate adaptation. And even in terms of adaptation finance, obviously, money is nowhere near where it should be. And then yeah, financing for biodiversity has always remained very low. I mean, how are perhaps just in a first instance, you know, we, you mentioned governments are going to provide the $25 billion, you know, how many governments have actually sort of stumped up any cash? And I think the UK, for example, has said it's not going to to put any money into the fund despite being quite one of the founders of it and one of the countries that has really pushed for it to be set up?

Yeah, absolutely. I think it's fair to say that the fund is not kind of getting off to the start that Brazil maybe hoped. Brazil itself has said it will contribute $1 billion, which has been matched by Indonesia. And then there's some other countries that have said they'll contribute amounts. So Colombia has committed to $150 million. Norway, $3 billion over a decade, and Portugal said it will contribute €1 million. The Netherlands has pledged $5 million for the specific World Bank secretariat startup costs. So the fund will be hosted by the World Bank. And then there's been kind of various murmuring. So we're expecting an announcement from Germany today, so Friday, the 7th of November, which might see some funding. And there's also been before COP, France, China, the UAE have kind of said that they'd be interested, but it's definitely a long way off from the $25 billion that Brazil's hoping for. And yes, as you mentioned, the UK has come out and said that they will not be contributing at all, which has been a cause of frustration, I think, for many. Interestingly, the TFFF was actually nominated as a finalist for the Earthshot Prize this year. So that's Prince William's kind of big high-budget environmental prize. So it's a bit tricky that then the UK government has now said that they're not going to give any money to the fund. I imagine a little bit awkward. So yeah, it's been a little bit controversial. I think there's a chance that other countries will follow suit in terms of saying they're not going to contribute and they're going to focus on mobilizing private finance. I think more widely it's a challenging COP for Brazil. Geopolitically, lots of governments are feeling financially constrained, and I think that could be reflected in the success of the TFFF.

Yeah, indeed. I mean, as we know, indeed, the UK is currently, you know, trying to get ready for its upcoming budget where Rachel Reeves is obviously struggling to balance the books. Emmanuel Macron in France is obviously in rather a tricky situation at the moment. So as you say, not a great time to launch a fund which perhaps to many might see as something which is not the the biggest challenge that countries are facing at the moment, and obviously defense budgets, etc., are increasing. But what about private investors? I mean, have they shown any sort of signals that this is something that they would be interested in? And yeah, what do they kind of— how do they see it? Is it an exciting prospect?

Yeah, so I've been catching up with some people in the finance sector since the fund was launched yesterday, and I think it's fair to say that there is kind of cautious optimism. Many are hopeful that this could be really promising. It feels new, it feels exciting. There is a little bit of concern. So I was speaking to ING, they're a bit worried that tying forest preservation to such a financial fund like this that's conditional, it could mean that nature protection is then dependent on the fluctuations of the financial market. So that's a little bit of a worry for some. There's also a bit of concern about how this will all be monitored. Brazil have said that they will kind of introduce things like satellite monitoring, but it's not yet clear what that's actually going to look like. So there's still a lot of questions around ensuring that this deforestation is not taking place, ensuring that it's kind of robust and works. But I'm sure those are all things that can be ironed out. But yeah, I would say that it's the The reception has largely been positive. Also in the NGO nonprofit world, they have welcomed the fund. There has been many, including I was speaking with Global Witness, a large nonprofit. They're saying that, okay, this is great, but we need the regulation. And as we've seen Europe, the UK, there's been so much stalling on deforestation regulations, and they are a little concerned that things like the TFFF could be a bit of a distraction and countries think, well, we've paid into that, so now we don't need to worry about the regulation.

But yeah, I mean, we've seen in the EU this week at the end of the Environment Council this week that Austria asked to go, yeah, to water down even further the EU deforestation regulation and was supported by a number of countries, and they're asking for an extra year's delay after we've already had a delay for several years. So yeah, as you say, not easy to put these things into place. And the final question I wanted to ask you around this was also a lot of this preservation presumably will be done by indigenous peoples who live in the, in the tropical forest. I mean, in the past there's been a lot of discussion about the fact that, you know, money gets filtered through various, or it goes to local governments or in central governments and never actually ends up with, you know, to the people who actually need to do the preservation. And I think this time there is a mechanism whereby the money can go, could go straight to the indigenous peoples. And do we have any sense as to kind of whether they're also happy with, for the first time, the idea that they might actually receive some money to do what they're supposed to be doing. I mean, research often suggests that areas can be better managed if indigenous people are involved or in charge of the process.

Yeah, it's a really important issue to raise. And as you say, it's been very controversial in the past and many indigenous people have not received the funding that they've been promised. So Brazil have said to try and cope with that. They've said that 20% of the funding from the TFFF, so the amount of money that's being distributed to tropical forest countries, will go specifically to indigenous people. As you allude to, it's not yet clear how that will work in practice and where that kind of transfer of money will take place. I think, as you say, the reaction from indigenous groups has been positive. I think they're happy to get a recognition. It's very clear in the establishment of the TFF that there is a section of funding for indigenous people, but they have been burned in the past. I think there's a bit of a worry that this could similarly end up in a situation where the money is kind of funneled off somewhere and people on the ground don't ever see it. I think it's all kind of being hashed out over the course of COP. And I'm sure that many indigenous groups that are there are kind of hoping for some more clarity around how it will work.

Great, Flo. Thanks. Well, good to start with some live news. But Lizzie, it's not all about forests, even though, yeah, this is a big part of COP this year. I mean, there's obviously the issue of fossil fuels still being burnt and increasing numbers of fossil fuels being used, even if we're bringing more renewables online. I wanted to ask you in particular about methane. I mean, a couple of COPs back, we saw real momentum, which was led by the EU and in the US to get countries to reduce emissions from methane, which, as I'm sure listeners of the podcast know, is a very potent greenhouse gas emission, but also quite short-lived. So it can be quite easy to, or easier to reduce emissions from methane and to get them out of the atmosphere quicker than it would be with carbon dioxide. But obviously, at this COP, the US is going to be largely absent. And at the same time, the Trump administration has made it very clear since they've been in power that they're not happy with efforts in the EU, for example, under the EU methane regulation to try and reduce emissions, methane emissions from the oil and gas sector. So can we, do we expect to see any new momentum here, or is this just going to be a COP where it's sort of going to be trying to hold the line a bit more around issues like methane?

Yes. So obviously there has been a huge amount of lobbying against the EU methane regulation. I would think that The hope is just to kind of hold it steady. In terms of whether there's a big announcement, I think it's difficult to call at the moment. I wouldn't expect— I mean, the Global Methane Pledge was, I believe, 5 years ago. That was COP26. So I'm sure that there will be kind of check-ins on that.

4 years ago, I think.

Was it?

2021?

Yes, it was. Thank you. So I guess next year will be the big check-ins on that. So I I don't think that there will be another kind of big methane announcement. I think it's very much kind of people getting very sick of lobbying against EU rules and hoping that the EU will hold strong because that regulation is the kind of the best thing that we have. What we have already seen was a big announcement from Bloomberg Philanthropies, that was on Thursday, for a $100 million investment in methane tracking and mitigation. I don't have all the details on that at the moment. It seems to be a kind of satellite program that also involves a lot of government collaboration. I did go away and speak to a few people about that, kind of get their thoughts, and they said, so the focus on working with governments is promising. It was 9 major methane-emitting countries that they mentioned, but people did point out that it doesn't mention China, Russia, India, or Turkmenistan, which are all kind of huge methane emitters. And obviously The US is another big question there. There were a few US states mentioned in the announcement, but obviously not the federal government. But it's got a lot of kind of high-profile backers, including COP30 president. So promising. Let's see.

Indeed, I think there's going to be a 'let's see' is going to be a watchword of the next 2 weeks.

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I wanted to ask you more widely as well about the US. I was reading yesterday that Sir David King, the former UK climate advisor to the government, UK government, said in an interview that he would prefer that the US wasn't at COP at all, because he sort of feared that, you know, they're going to— the US advisors could be going around sort of encouraging people not to take any action on climate in line with the Trump administration's kind of climate-denying stance. Have you been hearing any kind of echoes as to how people want the US to be there? Do they want a certain presence? Do they not want them to be there? Do they have the similar fears? Yeah. What have you been hearing with the people you speak to?

Yeah, so I have been asking a lot of people about this. So I met Lord Adair Turner from the UK this week, and he was talking about what's been quite surprising to him about the Trump administration so far is obviously they were going to deregulate on US climate, but he's been really struck by the kind of intense meddling in not just in international agreements but also in other countries, obviously heavy lobbying in the EU. And he was of the thought that if they were so confident in their belief that you don't need climate regulation, then why don't they go it alone and they'll have the competitive advantage? He said maybe they don't fully believe their own argument. So the latest that I've heard about, uh, the US, obviously the federal government will not be kind of sending anyone in an official capacity. Um, there were quite a lot of Congress members that were planning on going anyway, and there was a kind of big nonprofit network that was funding that travel. Um, it turns out that during a government shutdown, members of Congress cannot accept any funding of that kind. So, um, as far as I've heard, all of those— all of that travel has been canceled. Um, I've heard that some, particularly some Democrats, might be kind of looking to pay for it out of their own kind of office financing. Um, but they might need to be in Washington to deal with the ongoing shutdown, which is now the longest in U.S. history. So I think, yeah, we'll definitely see some kind of Democrat states. Gavin Newsom of California has already said he will be there. But definitely not a kind of big presence, which maybe is a good thing.

Indeed, it'll be interesting to see what happens. And I know that you interviewed a Republican recently about climate, and we're going to be running that interview in the next week or so. And it's just very striking, you mentioned COP26 in Glasgow when there was this big Republican presence there of Republicans in favor of climate action, very much market-based climate action, but they were very present on the ground, very willing and open and wanting to speak, and the change in the last 4 years is quite incredible. So yeah, look forward to reading that interview when we publish it. So Flo, there's a lot happening. I think forest has been one of the main sort of targets of COP under Lula. He really wanted this to be a COP where climate and nature very much came together. I think in addition to the fund that you mentioned, excuse me, there are a few other announcements we're awaiting on forests. Could you perhaps give us a bit of a flavor of what else you're looking out for over the next 2 weeks?

Yeah, absolutely. So yes, the TFFF is definitely the most kind of high-profile fund for forests, but there has been kind of 6 different suggestions made by the COP presidency to close what they're calling the forest finance gap. To ensure that forests are looked after. And those include a variety of suggestions. So there's jurisdictional REDD+ credits, which are different from carbon than typical kind of carbon crediting REDD+ credits, which in the past have had a lot of controversy. Jurisdictional credits are paid to the entire jurisdiction and they're a public policy mechanism.

So by jurisdiction, you mean it can be sort of either a country level or a state level or a regional?

Yes, exactly. and it's less focused on the specific project and more across the region. There's still various discussions going on around the extent to which they'll be used, whether they're too similar to REDD+, whether they're diff— But there'll be discussions of that at COP30. There is hope as well to get the financial sector and big industry and big businesses to kind of pay for things within their own supply chain, managing risk, investing and disclosing. As always, there'll be lots of discussion about that. Still unclear precisely what that would look like and what that will mean for companies. And then there was some hope around kind of just pure public finance for forests. As I mentioned, that's probably unlikely at this COP. Governments are generally not really looking to cough up much more climate finance, so we'll see. And then the other thing is debt-for-nature swaps, which is where developing countries that have large natural resources, things like forests, can swap their debt for preservation of nature. And that's something that has been discussed at many COPs and will likely be discussed at COP30 as well.

Yeah, again, another very controversial idea that not agrees with. But yeah, let's see what happens. And plenty to look out for. And so yeah, we'll look forward to your reporting on that over in the next couple of weeks. And Lizzie, what are you looking out for at COP? Is there anything in terms of either the fossil fuels or the kind of the finance sector that you're keeping an eye on?

Yeah, so as Flo said, I think the climate finance point is going to be a really big one. I know that in the kind of roadmap released, that was called out as a huge kind of objective. I did see yesterday that the US's withdrawal alone from kind of providing that takes $18 billion off the previously pledged support. So there will be— and obviously other countries have as well— so there will be a lot of effort to kind of plug that gap. Very difficult, um, at the moment. And then, um, I don't know if you saw, uh, yesterday, um, Antonio Guterres, the UN, um, kind of really went for fossil fuels, um, in a speech and, um, really called out government subsidies, which have been talked about at recent COPs every year. Not a huge amount of progress. So I think that he will be really hoping, you know, he's saying this is taxpayers' money, this is unfair, and it is to the detriment of the rest of the world.

Clean energy is winning in price, performance, and potential, offering the solutions to transform our economies and protect our populations. What is still missing is political courage. Fossil fuels still command vast subsidies—taxpayers' money. Too many corporations are making record profits from climate devastation, with billions spent on lobbying, deceiving the public, and obstructing progress. And too many leaders remain captive to these entrenched interests.

So there is kind of simmering hope that this year could bring a breakthrough on fossil fuel subsidy intervention. Excellent.

Well, it would be nice to think so, but I think Antonio Guterres says lots of very good things, but they often don't come to pass. But yeah, I mean, it's perhaps just worth reminding listeners, I think last year fossil fuel subsidies were is it $1.1 trillion? And I think it goes up to like $7 trillion if you include all the indirect costs in terms of air pollution, extreme weather events, etc. So yeah, it's vast amounts of money. And I think this week We Mean Business put out— the business alliance put out a paper showing as well that a lot of this money actually isn't spent on the poorest people in society. A lot of it actually goes to those that consume most, and therefore that's that tends to be people who are richer. So yeah, if we do phase out fossil fuel subsidies, then those social safety nets need to be in place. But yeah, it seems it would be time after discussing this for about the past 20 years, it feels, to actually do something about it. But let's see what happens. I mean, I think the opening words of Lula at COP, at the Leaders Summit yesterday, were quite strong on fossil fuels as well. So there does seem to be a bit of renewed momentum around that. Thanks both to both of you. We look forward to hearing what you're going to be reporting on in the next couple of weeks. And also for listeners, at the end of every week we'll be doing a regulatory roundup on Sustainable Views so you can also find out what's been happening at CARP in terms of reports, any announcements that are made on our website. In general, to keep up with changes to sustainability laws globally and litigation risks for businesses, Be sure to sign up for a free trial of Sustainable Views and our daily newsletter at sustainableviews.com. And as I've just said, we'll also be bringing you the latest news from COP over the next couple of weeks. Thanks to both of you, interesting as usual, and we will be back with another episode later this month.