Net Zero

1. Who isn’t attending
2. Gas phase-out
3. 🟡 ‘Off the hook’
4. Fossil fuel subsidies
5. 🟡 ‘Killing us’
6. Gold standard
7. 🟡 Climate commitments killed
8. 🟡 Carbon strategy

UN readies climate summit

U.N. Secretary-General António Guterres’s Climate Ambition Summit is as notable for who isn’t attending as for who is. The one-day meeting at the U.N.’s headquarters aims to showcase “first movers and doers,” and the world’s five largest emitters — China, the U.S., India, Russia, and Japan — are notably absent from the list of attendees. EU Commission President Ursula von der Leyen and nine European representatives bagged speaking slots, alongside G20 members Brazil, which is expected to soon announce more ambitious climate targets, Canada, and South Africa. Emerging and vulnerable economies such as Pakistan, Vietnam, and Tuvalu are also joining. California is the only subnational government invited. Standard-setters in the private sector and financial institutions will join officials over thematic sessions this afternoon. COP28 President Sultan Al Jaber will address the closing ceremony. 

Calls for a gas phase-out

The world must effectively phase-out gas from global electricity systems by 2040 for the power sector to align with the Paris goal of limiting warming to 1.5 C, according to analysis by Climate Action Tracker. COP28 host UAE has called for a phase-out of emissions rather than fossil fuels, betting on carbon capture and storage. But CAT’s research found that gas-fired CCS would likely play a minimal role at the global level, with plants equipped with the technology providing less than 1% of electricity demand by 2050. “The direction for all fossil gas, whether equipped with CCS or without, is the same: It’s one of swift decline,” said Neil Grant, one of the CAT report’s authors.

Climate tech takes center stage

THE SCENE

The line to get into the Climate Week kickoff party for tech startups and investors on Monday night wrapped around the block, with more than 3,000 RSVPs. On Tuesday, in an ornate room of a former ambassador’s residence across the street from the Metropolitan Museum, founders pitched a sold-out crowd of funders on everything from EV-charging software to artificial egg yolks (“Soon the world won’t remember that eggs came from animals”). Startups focusing on battery technology and carbon removal credits took center stage at a glitzy Plaza Hotel awards ceremony hosted by Prince William.

In the sphere of politics, the climate news out of this week’s U.N. General Assembly meeting is mostly grim: Missed targets, paltry finance, distracted world leaders. But the week is shaping up into an unexpected bonanza for climate tech, with an unprecedented number of people, events, and money swirling around innovative solutions to the crisis.

“It’s off the hook this year,” Zack Bogue, co-founder of the venture firm DCVC, told Semafor. “The amplitude is really increased.”

TIM’S VIEW

When Climate Week was launched in 2009, it was a sleepy side event to UNGA, a painstaking effort to put the climate crisis in front of world leaders who preferred to ignore it. This year, it feels center-stage.

The vibe in the climate-tech scene is the latest proof that the sector is feeling recession-resistant and thriving off the jolt of the Inflation Reduction Act. The string of heat waves, floods, and other disasters that have taken place this summer are also tailwinds for the climate tech industry, drawing talent and capital who feel the urgency of the moment.

“Founders are streaming into this space because what other problem feels as pressing, or has the same opportunity to build a business and make a tremendous fortune?” said Clay Dumas, founding partner at Lowercarbon Capital. “How can you focus on anything else?”

This week, Dumas’s firm said it raised $550 million for two new climate funds, closely following the closure last week of a $1 billion fund from Tom Steyer’s Galvanize Climate Solutions. Overall, at least $23 billion has been raised this year by U.S. and European climate investors, slightly lagging last year but still an impressively resilient sum given inflation and other headwinds facing the economy at large.

Stubborn subsidies

The amount Dutch fossil fuel subsidies are estimated to be worth, according to the country’s outgoing climate and energy minister. Despite campaigners’ pleas for an urgent phase-out plan — and a long-standing promise from the Dutch government to end these subsidies by 2025 — they still represent more than 4% of the country’s GDP. The IMF estimated last month that fossil-fuel subsidies globally totalled more than $7 trillion, and crucially noted that the wealthy benefited disproportionately from that largesse.

One Good Text

Vanessa Kerry, WHO Special Envoy for Climate and Health (and daughter of U.S. climate envoy John Kerry.) Kerry contributed to a new report on climate-focused health reform.

A golden bet

Climate change could drive demand for gold much as geopolitical risks and economic instability currently do, analysts at HSBC forecast. Investors could flock to the precious metal — historically seen as a safe asset in volatile times — as climate change and extreme weather events disrupt economies and increase the likelihood of human conflict. Paradoxically, higher demand for gold driven by those seeking refuge from climate disruptions could in turn increase greenhouse gas emissions. Producing a ton of gold emits 2,309 times more emissions than a ton of aluminum, according to the World Gold Council. “Gold has a prodigious carbon footprint,” the HSBC analysts wrote.

UK walks back ambitions

THE NEWS

U.K. Prime Minister Rishi Sunak is reportedly considering weakening key climate policies designed to achieve the country’s 2050 net zero goal, to the dismay of analysts and industry leaders. The policy U-turn could include delaying a ban on the sales of new petrol and diesel cars by five years and watering down plans for phasing out gas boilers, the BBC reported. Sunak said the government was committed to achieve the 2050 goal, but in a “more proportionate way.”

INSIGHTS

• The news has created a rift within Sunak’s Conservative Party, with a number of lawmakers opposed to the plans. Others have raised concerns that climate change, which has long been a mostly bipartisan issue in the U.K., could become a political football at the next election. The government’s climate advisers recently warned progress on meeting national climate targets had stalled.
• The revelations make for awkward timing for Sunak, who decided to shun the U.N. General Assembly, where leaders are gathered today to accelerate climate action. The U.K. notably didn’t sign a statement from an alliance of progressive nations on climate change, to which it is a member, which called for a climate “course correction” in line with science. “U.K. climate leadership is crumbling around us,” Helen Clarkson, CEO of the Climate Group, which organized New York Climate Week, told The Guardian.
• The U.K. is not alone in rowing back on climate policy. Mexico’s climate plans have gone backwards in recent years, prioritizing fossil fuels and dismantling climate policies. Last year, Mexico’s government removed a target to peak emissions in 2026 in an updated plan to the U.N. and is the only G20 country without a net zero pledge.

Financing the transition

A persistent message from officials, entrepreneurs, and banks at Climate Week has been that the technology to drive the energy transition already exists — but finance remains a massive hurdle, particularly in developing countries. The U.S. government, World Bank, and two major philanthropic foundations are aiming to help overcome that.

Officials outlined new details of a partnership first announced last year at COP27 whereby the group, which includes The Rockefeller Foundation and the Bezos Earth Fund, would devise new carbon-crediting methodology, and bring together buyers of carbon credits, private and public, with businesses and governments seeking finance.

The program aims to generate credits for verified emissions reductions across the power sector and officials said they hoped to later expand it to include agricultural emissions reductions. Revenue from the credits will be used in tandem with, or to catalyze, public and private finance towards the early retirement of coal plants, the development of additional renewable electricity generation, and improvements to the grid. The group is this week holding meetings and technical workshops with prospective buyers of the carbon credits, donors who would support the effort, as well as host countries.

The scale of the challenge is huge: According to the International Energy Agency, though global clean-energy investment has been gradually increasing, projected to total $1.7 trillion this year, the overall figure required is about $4 trillion annually. Current expenditure is also concentrated in China, the European Union, and the United States, with many poorer countries struggling to finance necessary improvements and upgrades.

“No country in the world has enough money to affect this transition in time,” U.S. climate envoy John Kerry told attendees at a launch event in midtown Manhattan. “We are trying to scale up capacity and private capital to be deployed, as much as we can, as fast as we can.”

• Wall Street is gearing up for the next battle over U.S. investments in China, worried that Congress will out-hawk the White House.
• Some of the House Republicans blocking a budget deal may have their eye on higher office — and that’s causing gripes among their colleagues.
• Why Africa’s biggest city is nervous about a Chinese-built metro system.