Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The world's most important climate conference kicked off this week
Speaker 2: in Baku, Azerbaijan, and this year it's all about money.
Speaker 2: To go from the system that we have today to
Speaker 2: a less carbon intensive systems is going to require money
Speaker 2: and it's going to be more expensive.
Speaker 1: You can't achieve anything if you don't have finance seats.
Speaker 2: There is a wall of money there, but we just
Speaker 2: need to find a way of deploying it. That was
Speaker 2: Darren Woods, the CEO of Exxon, NGO, lawyer Jacinda Ngk
Speaker 2: and former UK Minister Alak Sharma. They're just a few
Speaker 2: of over fifty thousand people attending this year's UN Climate
Speaker 2: Conference called COP. It's an annual meeting where delegates from
Speaker 2: nearly two hundred countries come together to address one of
Speaker 2: the most urgent issues of our time, climate change. At
Speaker 2: last year's COP, members laid the groundwork to transition away
Speaker 2: from fossil fuels and to reach net zero by twenty fifty.
Speaker 2: So this year they need to decide who's going to
Speaker 2: pay for that transition.
Speaker 1: It's labeled the finance cop.
Speaker 2: Akshat Rothy is a senior climate reporter for Bloomberg and
Speaker 2: the host of the Zero podcast. This is the fourth
Speaker 2: cop he's attended, but Akshot says the stakes of this
Speaker 2: year's talks feel even higher than usual. And that's not
Speaker 2: just because we're set to blow past the one point
Speaker 2: five degree celsius temperatureized target outlined in the Paris Agreement,
Speaker 2: or because twenty twenty four is set to be the
Speaker 2: hottest year on record, or because the financial commitment needed
Speaker 2: to decarbonize could be as much as trillions of dollars.
Speaker 2: It's because, on top of all.
Speaker 1: That, there is a Trump cloud somewhere in the sky
Speaker 1: all the time during these negotiations.
Speaker 2: Trump has been an antagonist to environmental efforts. During his
Speaker 2: first term, he pulled the US out of the Paris
Speaker 2: Climate Accords, and he's made no secret of his feelings
Speaker 2: on fossil fuels. We have more liquid gold, well, I
Speaker 2: guess we have more liquid goal than any country in
Speaker 2: the world, more than Saudi Arabia, we have more than Russia.
Speaker 2: It's this kind of rhetoric that has delegates concerned and
Speaker 2: wondering what a second Trump presidency means for the US's
Speaker 2: commitment to climate goals and to the Earth's future. This
Speaker 2: is the big take from Bloomberg News. I'm Sarah Holder
Speaker 2: today on the show Inside COP twenty nine after a
Speaker 2: Trump win, how the world will calculate the cost of
Speaker 2: fighting climate change and decide who's footing the bill. Okshot
Speaker 2: Rathi has been on the ground in Baku since COP
Speaker 2: twenty nine kicked off there earlier this week. He's trying
Speaker 2: to get the pulse on how negotiations over climate financing
Speaker 2: are going and how global tensions are influencing the talks.
Speaker 2: So he's speaking to people there from vegan activists.
Speaker 1: We are here to promote vegan because this is the
Speaker 1: solution for global army.
Speaker 2: Your excellences to Muktar Babayev, the oil executive who's currently
Speaker 2: the president of COP.
Speaker 1: Welcome to Azerbaijan. Welcome to COP twenty nine.
Speaker 2: That's Babayev, a CoP's opening ceremony in his home country
Speaker 2: of Azerbaijan, a location that's been raising some eyebrows.
Speaker 1: Azerbaijan is a petro state. Ninety percent of its exports
Speaker 1: are oil and gas. Isn't that attention, certainly, but it's
Speaker 1: also part of the process. You warned. Even the countries
Speaker 1: that have fossil fuels to be a part of climate
Speaker 1: action because it's a global problem, in every country has
Speaker 1: to do its bit.
Speaker 2: The negotiations happening at this year's cop revolve around what
Speaker 2: responsibility the country's richest economies have to help smaller economies
Speaker 2: adapt to a warming world. And by the time COP
Speaker 2: twenty nine is over, there are two main things that
Speaker 2: delegates need to decide.
Speaker 1: The first one is called Article six, and it's about
Speaker 1: creating a carbon market where say a country like Indonesia,
Speaker 1: which has a lot of forests, could be producing carbon
Speaker 1: credits and be selling them to Norway, which produces a
Speaker 1: lot of oil and has emissions. That would allow money
Speaker 1: to go to Indonesia which it could use to try
Speaker 1: and move its energy transition faster. That got signed off
Speaker 1: at least half of it on the very first day
Speaker 1: of COP and maybe countries and companies will start to
Speaker 1: buy carbon credits from these countries.
Speaker 2: Just after COPP members finalize some of the rules for
Speaker 2: international carbon trading and made plans to launch a UN
Speaker 2: backed carbon market, Saudi Arabia launched its own carbon trading market,
Speaker 2: capitalizing on the new opportunity.
Speaker 1: The second thing, which is a much harder thing, is
Speaker 1: called the new collective quantified goal on climate finance. Sorry,
Speaker 1: it's a big phrase, but that's the official phrase. And
Speaker 1: all it means is what will rich countries contribute towards
Speaker 1: helping poor countries reduce emissions adapt to the warming that's
Speaker 1: already been caused. Because without that money, those countries could
Speaker 1: not develop as much renewable energy and might end up
Speaker 1: fossil fuels, which will exacerbate the problem. And the number,
Speaker 1: which is going to be in the hundreds of billions
Speaker 1: of dollars a trillions of dollars, is what is at
Speaker 1: the heart of the contention over the two week period.
Speaker 2: Well, how do they decide how much responsibility each country
Speaker 2: has to shoulder.
Speaker 1: There is no simple math here. It's not like you
Speaker 1: put out a ten of permissions, so you are going
Speaker 1: to have to pay so much money. It is very
Speaker 1: much the hard work of diplomacy. You look at the science,
Speaker 1: you say, clearly, rich countries have done the most. Now
Speaker 1: you should start to show how you can help poor
Speaker 1: countries manage that. Rich countries will say, look, we are
Speaker 1: having problems back at home. There's a cost of living crisis.
Speaker 1: Whatever the reasons might be, those will have to make
Speaker 1: those excuses and then there will be a fight, and
Speaker 1: that fight actually happens in like really boring text, legal text,
Speaker 1: but boring text for you know, poets or literature readers,
Speaker 1: but very important text. And the final thing is this
Speaker 1: is a very weird experiment because the COP process only
Speaker 1: works by consensus. That means all countries, not a single
Speaker 1: country can disagree. All countries have to agree. Only then
Speaker 1: you get a deal at the end.
Speaker 2: What about the private sector? How much of the responsibility
Speaker 2: will they take on.
Speaker 1: The private sector is not directly involved in these negotiations.
Speaker 1: It's very much a un process. But because the energy
Speaker 1: transition and all these climate goals is trillions of dollars
Speaker 1: of investments annually, there is no way that happens without
Speaker 1: the private sector participating. That's why at every COP we
Speaker 1: get not just government ministers but also company CEOs coming.
Speaker 1: I spoke to the CEO of EGXON earlier this week
Speaker 1: and he very much made the case that the US
Speaker 1: should remain in the Paris Agreement, that Donald Trump should
Speaker 1: keep the Inflation Reduction Act because for companies, it is
Speaker 1: really important that the policies that governments set are stable,
Speaker 1: are acceptable, and they have business certainty to go down
Speaker 1: this energy transition. So private sector doesn't play a direct role,
Speaker 1: but it plays a central role in delivering the goals.
Speaker 1: The interaction between the two is always fascinating to watch.
Speaker 2: Just how much money is needed to address climate change?
Speaker 2: Is that a number you can share and quantify.
Speaker 1: Yes, that number has been quantified, and there are estimates
Speaker 1: of various kinds. So something like three trillion to five
Speaker 1: trillion dollars is roughly the number that multiple estimates come to,
Speaker 1: and that is investments all countries have to make towards
Speaker 1: just reducing emissions, and today we make about two trillion
Speaker 1: of that investment in clean energy. But there's a second
Speaker 1: aspect to spending money, which is adapting to the warming
Speaker 1: that's already been caused. There's already heat waves of extreme
Speaker 1: nature happening. There is sea level rise happening. We've seen
Speaker 1: floods in places like Spain very recently. There are droughts
Speaker 1: in other regions, and those all have money figures attached
Speaker 1: from the impacts. But there could be projects you could will,
Speaker 1: like managing the flow of a river or a sea
Speaker 1: wall that would allow you to avoid the impacts coming
Speaker 1: your way, and that number can be in the hundreds
Speaker 1: of billions of dollars every year, so all of it
Speaker 1: it is a large sum, but it is always worth
Speaker 1: remembering if we don't spend this money now, we will
Speaker 1: have to spend even greater sums dealing with climate impacts.
Speaker 2: After the break the Trump question how the US's president
Speaker 2: elect could get in the way of global climate progress
Speaker 2: at Future COPS and Beyond at COP twenty nine in Azerbajean.
Speaker 2: This week, Bloomberg Senior climate reporter Akshat Rathi has been
Speaker 2: reporting on how negotiations over the future of climate financing
Speaker 2: or going. But halfway through the ten day conference, there
Speaker 2: are still a lot of unknowns. One of the biggest
Speaker 2: is how the US presidential election might influence things. So, Akshat,
Speaker 2: there's still this big shadow hanging over COP and that
Speaker 2: is Donald Trump. Can you tell us more about how
Speaker 2: his leadership of the US might impact the country's participation
Speaker 2: in Future COPS in meeting these eventual commitments.
Speaker 1: In the past, Donald Trump pulled the US out of
Speaker 1: the Paris Agreement, but he wasn't able to do very
Speaker 1: much with it because there was a delay baked in
Speaker 1: by the time he left. Joe Biden had been elected
Speaker 1: this time around. When Donald Trump decides the US is leaving,
Speaker 1: it'll take one year for the US to leave, and
Speaker 1: then the US cannot directly participate in negotiations and influence
Speaker 1: the outcomes until perhaps a future president wants to join.
Speaker 1: The other thing that Donald Trump can do is start
Speaker 1: to squeeze sources of finance that go towards climate, both
Speaker 1: domestically through things like cutting down financing for clean energy
Speaker 1: through the Inflation Reduction Act, for example, or globally through
Speaker 1: multilateral development banks where the US is the largest shareholder,
Speaker 1: and it could give a mandate to these banks that
Speaker 1: they cannot anymore invest in climate. He could also take
Speaker 1: money away from the UN system, which is something he
Speaker 1: has attempted to do in the past. And the United
Speaker 1: Nations is a very important body, but it only works
Speaker 1: because all countries put in their contribution towards it, and
Speaker 1: the US contributes almost the fifth of its budget. There
Speaker 1: is also a risk that Trump might pull the US
Speaker 1: out of the underlying Climate Treaty altogether.
Speaker 2: Part of the point of cop is that all of
Speaker 2: these country trees come together and have the shared commitment.
Speaker 2: If the world's largest economy down the line is no
Speaker 2: longer interested in fighting climate change, and if the US
Speaker 2: will no longer be a leader on this, where does
Speaker 2: that leave global efforts like.
Speaker 1: Cop Look, there is no way to say it is
Speaker 1: a good thing. The US has a responsibility as the
Speaker 1: world's largest historical emitter and as the current second largest emitter.
Speaker 1: If the US doesn't meet its responsibility, other countries will
Speaker 1: feel like they might get a free pass. But then
Speaker 1: you look at what happened when the US pulled out
Speaker 1: of the Paris Agreement the first time. No other country left.
Speaker 1: And that's because the energy transition is one that is
Speaker 1: better when done collaboratively.
Speaker 2: It's also because more countries are looking at the energy
Speaker 2: transition as a good investment.
Speaker 1: The price of clean energy has come down, the desire
Speaker 1: for country trees to create competitive industries that would build
Speaker 1: electric cars or solar panels has grown, and so the
Speaker 1: US leaving. As Ali Zaidi, who's then National Climate Advisor
Speaker 1: to President Biden, told us, the US will actually fall
Speaker 1: behind countries like China and India in the very technologies
Speaker 1: of the twenty first century, and that could actually be
Speaker 1: economic harm to the US.
Speaker 2: It would be economic malpractice to put US back in
Speaker 2: the position we were four years ago, where we're in
Speaker 2: massive deficit in the leadership of these technologies.
Speaker 1: And so right now we don't hear as if any
Speaker 1: other country is following the footsteps that the US might
Speaker 1: be about to take. But there is a risk that
Speaker 1: once the largest economy leaves, somebody might join the leaving party.
Speaker 2: Akshat says that even at this tenuous moment for cop
Speaker 2: and for the planet, there are some things bringing climate
Speaker 2: activists hope.
Speaker 1: Well, the biggest hope comes from China, which is a
Speaker 1: weird thing to think about because China is currently the
Speaker 1: largest emitter of greenha's gas emissions, has the most cold
Speaker 1: power plants in the world, and produces almost thirty percent
Speaker 1: of planet warming emissions. And yet it is also the
Speaker 1: country that is deploying more clean energy than the rest
Speaker 1: of the world combined. But I also get hope from
Speaker 1: other countries, countries like India and Brazil and even Kenya,
Speaker 1: smaller economies that see the potential for building clean energy
Speaker 1: as the route to prosperity, not just because it will
Speaker 1: help reduce climate change, but also because they will find
Speaker 1: ways to turn that clean energy into economic growth that
Speaker 1: will bring prosperity to their own people, and that perhaps
Speaker 1: is the most hopeful note you can take when we
Speaker 1: are almost certainly going to be facing many more and
Speaker 1: more intense climate impacts over the next year.
Speaker 2: And actually we've also been circling some of the challenges
Speaker 2: facing COP that tensions that are playing out beneath the surface,
Speaker 2: the disappointments or the knowledge that more work has to
Speaker 2: be done after past cops. So I guess I'm just curious,
Speaker 2: how much does this conference matter?
Speaker 1: Why is it.
Speaker 2: Important to keep convening every year and hashing this out?
Speaker 1: Well, climate change is a global problem. It affects every
Speaker 1: country everywhere. It is caused by every country everywhere, just
Speaker 1: not proportionally because greenhouse gas emissions, once emitted, go into
Speaker 1: the atmosphere and stay there. And thus there has to
Speaker 1: be a global forum to address a global challenge. And
Speaker 1: as frustrating as cops are, as long as cops are,
Speaker 1: I find the event one of hope because it forces
Speaker 1: all these people to come together. When I walk through
Speaker 1: the COP venue, I see people wearing all sorts of dresses,
Speaker 1: speaking all sorts of languages, And there is no other
Speaker 1: place on Earth that I think you can experience that
Speaker 1: level of diversity and that level of realization that we
Speaker 1: are all in it together.
Speaker 2: COP twenty nine officially ends on November twenty second, but
Speaker 2: it could take longer to reach a deal. This is
Speaker 2: the Big Take from Bloomberg News. I'm Sarah Holder. For
Speaker 2: further coverage of COP twenty nine and more reporting from Acshot,
Speaker 2: head to Bloomberg dot com or the Zero podcast feed,
Speaker 2: where you can also hear Oxshot's interview with Exon CEO
Speaker 2: Darren Woods. This episode was produced by Jessica Beck and
Speaker 2: audreyan A Tapia, who also fact checked this episode. It
Speaker 2: was mixed by Alex Suguiera. It was edited by Stacy
Speaker 2: Vinnicksmith and Emily Buzo. Special thanks to Mitha Lee Raw.
Speaker 2: Our senior producer is Naomi Shaven. Our senior editor is
Speaker 2: Elizabeth Ponso. Our executive producer is Nicole Beamster. Bor Sage
Speaker 2: Bauman is Bloomberg's head of podcasts. If you like this episode,
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Speaker 2: Thanks for listening. We'll be back next week.