Net Zero

1. Factories at risk
2. Way off track
3. Methane marketing
4. Gaza war emissions
5. Insurance reckoning

COP29 enters its ‘valley of despair’ phase, and a massive green hydrogen factory nears completion in Saudi Arabia.

Is COP fundamentally broken? Some of its most important backers think so. In an open letter on Friday, a group that includes a former UN secretary general and the UN official who oversaw the design of the Paris Agreement said the process in “its current structure, simply cannot deliver the change at exponential speed and scale.”

Among the problems the group identifies: COPs are too big, too infrequent, too vague, too overrun with fossil fuel lobbyists, and too mired in arcane negotiations rather than being a forum for peer pressure on countries to show concrete progress toward decarbonization. And the UN should set stricter standards for host countries, excluding any who can’t forcefully champion the notion of transitioning away from fossil fuels.

There’s certainly no shortage of dysfunction in Baku. The Argentine delegation stormed out on Thursday, a stunt apparently meant to demonstrate President Javier Milei’s alignment with Donald Trump. And the top French climate negotiator canceled her flight following inflammatory comments about her country’s colonial legacy by the summit’s host — not a promising signal about Baku’s ability to forge a global consensus. Suffice to say, tensions are high, and expectations falling. The arrival today of a group of Republican members of Congress probably won’t do much to shore up confidence about the next four summits. And for reasons I don’t understand, the one place with decent breakfast pastries doesn’t open until after 9am.

In the meantime, the gossip mill is churning about which country will host COP31, after Brazil hosts next year. The names I’ve heard are Turkey, Australia, and Dublin. The way things are going, who knows what COP will even look like by then. I plan to spend the weekend shopping away my sorrow, checking out the offerings of historic carpets and big furry hats.

US manufacturing threatened

Billions of dollars of investment in US clean tech factories could be stranded if the incoming Trump administration pares back the country’s climate policies, outgoing President Joe Biden’s national climate adviser told Semafor.

Speaking on the sidelines of COP29, Ali Zaidi said the clean energy buildout in the US is unlikely to slow down under the new administration, and that companies and local governments can keep the US involved in global climate talks even if Trump walks away from them. But he warned that domestic manufacturing, in particular, is at “a fragile inflection point” and that the changes to climate policy could cut new investments short.

Manufacturing is one of the big success stories of the Inflation Reduction Act, the Biden administration’s landmark clean tech spending program. Since the law was passed, factories for building things like EV batteries and solar panels have drawn at least $89 billion in investment. The completion of all announced manufacturing projects would create more than 100,000 jobs, according to the advocacy group E2. Most of that investment is in Republican congressional districts, meaning the tax credits helping to drive it forward should be fairly well protected from reversal next year.

But there are other factors that could leave future clean tech manufacturing investment in doubt.

Way off track

Countries’ climate plans are getting marginally closer to meeting the Paris Agreement warming goals, but actual policies to achieve those plans are falling vastly short.

A report this week from the research group Climate Action Tracker found that the growth of renewable energy over the past several years has been effectively canceled out, emissions-wise, by the parallel growth of fossil fuels. As a result, global emissions in 2030 are on track to be nearly twice as high as they would need to be to stay within 1.5°C of warming, with the gap widening over time. The study underscores that the non-binding nature of the Paris Agreement leaves a huge loophole for countries to underdeliver on their promises — and even those go nowhere near far enough.

Growing calls for methane curbs

US gas companies risk losing access to global export markets if the Trump administration walks back regulations and fees for methane pollution, the CEO of a leading climate philanthropic group told Semafor. This week, the Biden administration finalized a fee of up to $900 per ton of methane above a certain baseline by oil and gas operations. Darren Woods, the CEO of ExxonMobil, told Semafor this week that he supports keeping the methane rules in place, remarks that echo those of his counterpart at TotalEnergies.

But they will likely be among the climate policies on the chopping block in Trump’s Environmental Protection Agency. Marcelo Mena, CEO of the Global Methane Hub, agreed with Woods that cutting the rule would be a mistake, as a growing list of governments representing 70% of the global gas import market, including Japan, Korea, and the EU, implement strict methane emissions requirements. “If the US wants to drill baby drill, it’s going to have to be with low methane,” Mena said.

Middle East conflict emissions

Approximate tons of CO2 released since October 2023 in the war between Israel and Hamas in Gaza, according to researchers at Queen Mary University of London, about equal to the annual carbon footprint of 16 coal-fired power plants. That includes direct emissions from military hardware, as well as the emissions associated with construction materials to rebuild devastated urban areas in Gaza. Conflict-related emissions aren’t covered by the Paris Agreement, which many observers see as a gaping loophole that lets combatants avoid responsibility for the environmental toll of military decisions.

In an interview at COP29, Gideon Behar, Israel’s climate envoy, said responsibility for those emissions lies solely with Hamas, “clear and cut,” and said the war has disrupted collaboration between Israel and its neighbors on climate issues like improving water access. But he said when the time comes to rebuild, “reconstruction for the whole region should be done in a more environmentally friendly way.” In a separate interview with Politico, Behar also said it would be “better” for Trump not to drop out of the Paris Agreement.

A reckoning for insurance

Homeowners and insurance companies will pay the price if the Trump administration rolls back federal climate science agencies and disaster resilience planning, a climate executive at one of the world’s largest reinsurance brokers told Semafor. One key lesson of the last decade responding to escalating climate change disasters is that even small investments in preparation yield huge savings in the cost of rebuilding, said Liz Henderson, global head of climate risk advisory at Aon.

Advance planning, including the use of climate science to forecast future risks, is critical for enabling home insurance companies to avoid the massive post-disaster payouts that can drive them to abandon vulnerable areas altogether, as many have done in places like California and Florida. Federal agencies are essential in that process, Henderson said. Yet federal climate research and preparation efforts are in the crosshairs of policy advisers to the Trump administration, and Henderson said she’s concerned that the new administration will not sufficiently appreciate climate risk. “My fear is that then there’ll be events that happen that people will suffer from, and they’ll have to learn a lesson in a harder way,” she said.

New Energy

• The massive green hydrogen production facility at NEOM in Saudi Arabia is 60% complete and on track to begin production in December 2026, the facility’s CEO Wesam Alghamdi told Semafor.

Fossil Fuels

• The UK will ban the opening of new coal mines, British Energy Secretary Ed Miliband said.
• Natural gas prices in Europe hit their highest point in a year after officials in Austria warned of import disruptions from Russia.

Personnel

• Trump nominated North Dakota Governor Doug Burgum, a champion of the oil and gas industry, to lead the Interior Department, where he will have significant oversight of the administration’s efforts to expand drilling on federal lands and waters.

Finance

• Bolivia launched a plan to sell up to $5 billion in carbon offsets to help fund its anti-deforestation efforts.

EVs

• Trump’s transition team plans to kill the $7,500 consumer tax credit for EVs, Reuters reports. The move will likely benefit Tesla, which targets higher-budget buyers and has more scale than most of its Detroit rivals in the EV race.

Simon Evans is the deputy editor of Carbon Brief.

A lobbying group representing the tech industry is urging the incoming Trump administration to broadly review existing federal authorities and rules regarding artificial intelligence, writes Semafor’s Morgan Chalfant, to single out regulations that may be “unnecessarily impeding AI adoption.”