AXA IM: COP29 must deliver on climate finance

1 november 2024

Klimaatverandering

Climate ambitions without finance are just words and COP29 must deliver on the latter, for instance through paving the way for an international taxation on world billionaires, according to AXA IM's Head of RI Research Virginie Derue. Moreover, Derue expects supply chain disruptions in the Middle East and their impact on energy prices to influence discussions on CO₂ emission data.

COP29 will have to follow up on the first-ever stocktake of global climate action and the call to gradually transition away from fossil fuels that was agreed at last year’s COP28.

While it might not be conducive to concrete actions aimed at transitioning away from fossil fuels in the short term, the current backdrop of exacerbated geopolitical risks and conflict in the Middle East raise more impactful questions.

'Supply disruptions have the potential to weigh on energy prices - around 20% of today’s oil and liquified natural gas supplies flow through the Strait of Hormuz - in turn impacting the future of energy demand alongside energy security obligations. It is likely to colour the debates at this upcoming COP on future carbon dioxide (CO2) emissions data,' Derue says.

Over and above enhanced climate ambitions, Derue expects COP29 to concentrate on strengthening climate finance, focussing on multilateral development banks, the Climate Finance Action Fund and an international taxation on world billionaires.

She says the following about the latter: 'While the most pessimistic will find it naïve to believe such international cooperation could occur, we cannot deny that international tax cooperation has made significant progress over the last 15 years, from the automatic exchange of banking information to the end of banking secrecy and a minimum tax for multinational companies. COP29 will certainly not be a game changer on that front but we hope that it paves the way for future progress. Ambitions without finance are just words. COP29 must deliver on the latter.'