• D.C.
  • BXL
  • Lagos
  • Riyadh
  • Beijing
  • SG
  • D.C.
  • BXL
  • Lagos
Semafor Logo
  • Riyadh
  • Beijing
  • SG


In this edition, we look at the latest from COP29 — including an interview with Exxon’s CEO — as wel͏‌  ͏‌  ͏‌  ͏‌  ͏‌  ͏‌ 
 
cloudy Baku
sunny Washington DC
thunderstorms Beijing
rotating globe
November 13, 2024
semafor

Net Zero

net zero
Sign up for our free newsletters→
 
Hotspots
  1. Carbon market kerfuffle
  2. Exxon’s caution for Trump
  3. Trump’s climate cabinet
  4. Climate lawsuits growing
  5. China’s green lending

Why a strong solar industry is in the geopolitical interest of the US, and Tesla short-sellers lose big.

PostEmail
↓
First Word
A graphic saying “A note from Tim McDonnell”

Three days in, the mood at COP29 is gloomy. US President-elect Donald Trump looms over most conversations, but no one is sure what his second term in office will mean for global climate action — maybe a major setback, maybe a kick in the pants for other countries’ efforts. The parade of world leaders on Tuesday felt depopulated, with at least as much time in the onstage program dedicated to cultural performances as to speeches. One of the only interesting statements came from Belarusian President Alexander Lukashenko — not exactly known as a champion of multilateralism — who complained that since the Paris Agreement, global climate action “has only gotten worse.” Azerbaijan President Ilham Aliyev used his platform to make clear that fossil fuels are “a gift of the god.” The bathrooms are kind of gross, and the venue, in the ground floor of Baku’s soccer stadium, has no windows.

The key issue of climate finance is far from a resolution. Ali Mohamed, Kenya’s climate envoy, told a scrum of reporters this morning that the proposal currently being discussed, which would spread responsibility for raising climate funds from a core group of rich countries to a broader pool of governments, development banks, and private investors, is unacceptable. A patchwork like that may be the only path to reaching $1.3 trillion as the fundraising target, which Mohamed said is still the hard goal for developing countries. But he has good reason to be concerned: COP can’t dictate terms to Wall Street, and the US, soon to be under Trump, remains the largest shareholder in the World Bank — which means any plan sketched out in Baku will have little enforcement behind it.

But a lot can and will change in the next week and a half. And hey, there’s a good place for baklava near the press center, the public transit is working well, and the historic center of Baku is charming. So I’m not giving up yet — and I’ll get a better view of what’s in store when I interview White House climate adviser Ali Zaidi at our (sold out!) Goals House event tonight.

PostEmail
↓
1

A carbon market kerfuffle

A photo of President of Azerbaijan Ilham Aliyev.
President of Azerbaijan Ilham Aliyev. Maxim Shemetov/Reuters

COP29 got off on an awkward diplomatic footing, as the summit’s leaders forced through an agreement on carbon markets that observers say was rushed and leaves room for greenwashing. Rules for a new UN-administered international carbon market have been one of the most contentious issues at the last several COP summits, and many observers expected to leave Baku without a resolution on them. So many were surprised on Monday when the COP leadership, seeking a splashy early win, gaveled through a rulebook without putting it through the normal review process. The new market will allow countries to vet carbon-cutting projects within their borders, and then keep a share of revenue as offset credits from those projects are sold to other countries or foreign companies.

Supporters of the policy say it will unlock a huge volume of new finance for developing countries’ decarbonization efforts, with a higher level of scrutiny than the existing, fraud-prone voluntary carbon market. Prolonged negotiations had left what could add up to billions of dollars of climate finance stuck on the sidelines, said Guy Turner, managing director of carbon markets for the index provider MSCI. “We can’t keep talking about what this might look like at some point in the future. We’ve got to get something up and running.”

But critics say the rules don’t provide adequate guidance to prevent the purported emissions benefits of carbon projects, by design or by accident, from being misleadingly tallied, which would do little more than shuffle on-paper emissions around the globe with no real benefit for the climate. “There are still a lot of loopholes and ambiguity,” said Erika Lennon, senior lawyer for the Center for International Environmental Law. “It’s super problematic, and could definitely lead to real harm.”

PostEmail
↓
Semafor Exclusive
2

Exxon’s caution

 
Tim McDonnell
Tim McDonnell
 
A view inside the COP29 venue in Baku.
Murad Sezer/Reuters

The CEO of the largest US oil company told Semafor the Trump administration shouldn’t scrap the Biden administration’s regulations on methane emissions, and warned that a near-term boost in US oil production isn’t in the cards. Darren Woods, CEO of ExxonMobil, was in Baku for the opening of the COP29 climate summit, where he aimed to convince world leaders that dropping fossil fuels isn’t necessary to meet global climate goals. In an interview, he said that the ever-shifting landscape of US environmental regulations made it more challenging to navigate the energy transition, but that the company was still pursuing new technologies like hydrogen in a bid to cut its operational carbon footprint. Woods also said that today the oil and gas market is already well-supplied: “I don’t know that there’s an opportunity to unleash a lot of production in the near term.” In a separate interview with The Wall Street Journal, he added that the US shouldn’t drop out of the Paris Agreement, as Trump has promised to do.

Read on for more on Woods’ vision for the future of Exxon. â†’

PostEmail
↓
3

Trump’s climate cabinet

A photo of Lee Zeldin.
Former US Rep. Lee Zeldin. Brendan McDermid/Reuters

Top environment posts in Donald Trump’s incoming administration are starting to fill. Trump nominated Lee Zeldin, a Republican former member of Congress from New York, to head the Environmental Protection Agency. Zeldin, a longtime Trump ally, has an extensive track record of voting against environmental legislation while in Congress, and will likely serve as a reliable executor of Trump’s plans to unravel most of the climate regulations put in place by the EPA under Biden. But compared to his predecessors in the post during Trump’s first term, both of whom had a long career suing the EPA and lobbying against its climate rules before leading the agency, Zeldin’s regulatory resume is sparse. And unlike Trump he has publicly acknowledged that man-made climate change is real. Meanwhile, Sen. Marco Rubio, Trump’s nominee to lead the State Department, has a “hardline approach to China and skepticism of human-caused climate change [which] makes cooperation on climate issues between China and the US even less probable,” said Alice Hill, energy fellow at the Council on Foreign Relations.

But two key posts remain unfilled. Trump’s nominee for the Department of Energy will be instrumental in continuing, or not, numerous multibillion-dollar programs to develop US industries for battery manufacturing, hydrogen production, and other nascent technologies. And his choice to lead the Treasury Department will become a critical decision maker on the rules for clean energy tax credits in the Inflation Reduction Act.

PostEmail
↓
Semafor Exclusive
4

Climate litigation coming

76%

Proportion of general counsels and heads of litigation who say they are encountering legal disputes related to their companies’ energy transition efforts, according to a survey of 300 firms across industries in Asia, Australia, Europe, and North America. The research, published by Burford Capital and shared with Semafor, is the latest sign of the rapid increase in climate litigation worldwide, and comes a day after a Dutch court reversed a prior ruling ordering the oil and gas giant Shell to reduce its carbon emissions 45% by 2030.

That decision nevertheless “offers encouragement for future climate litigation” because it “reinforces the principle that companies must take meaningful action to reduce emissions,” Joana Setzer, a climate litigation expert at the London School of Economics, said. Indeed, 47% of the legal chiefs surveyed in the Burford research say they expect the volume of transition-related disputes to rise in the coming decade.

PostEmail
↓
Semafor Exclusive
5

China’s green lending

 
Prashant Rao
Prashant Rao
 
A bar chart showing Chinese lending by energy source

China is slowly ramping up its energy-related lending to developing nations, albeit with two major shifts: Beijing’s loans are greener, and smaller. That’s according to new research published by Boston University’s Global Development Policy Center and shared with Semafor.

All of China’s loans in 2023 were for green projects, all were smaller than its historical average, and all pointed to more risk-averse lending than Beijing’s overseas development banks were willing to take on previously. The overall number of loans should soon rebound, said Jiaqi Lu, one of the report’s authors, and more may begin going to Latin America because Chinese lenders increasingly prioritize achieving financial returns and avoiding political risks, meaning they may shun some African countries they had previously worked with. But individual deal sizes will probably remain smaller than during the heyday of China’s Belt and Road Initiative energy lending, he said.

Read on for more on the future of Beijing’s BRI.  â†’

A bar chart showing Chinese lending by region
PostEmail
↓
Power Plays

New Energy

Fossil Fuels

Finance

Tech

Politics & Policy

EVs

PostEmail
↓
One Good Text

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association.

Tim: Why is it important, from a geopolitical perspective, for the US government to keep up its support for the domestic solar industry? Abigail: I think there’s an awareness amongst a lot of folks that if we step back, a couple of powerful companies [in other countries] will step up their solar manufacturing and deployment. Ceding US leadership will have the adverse impact of empowering China, and that is not what we want.
PostEmail
↓
Semafor Spotlight
Makan Delrahim.
Mike Blake/Reuters

Makan Delrahim, a top antitrust cop in Donald Trump’s first administration, has talked to the Trump transition team about running the Federal Trade Commission, Semafor’s Liz Hoffman and Shelby Talcott scooped. Delrahim’s track record in blocking some megamergers while supporting others “could bridge two Republican camps starkly divided over corporate competition,” they wrote.

Subscribe here to Semafor Business to keep up with what Wall Street is reading. â†’

PostEmail