"The COP29 climate summit in Baku has delivered an important boost for investment in practical emission reduction measures despite big challenges inside and outside the negotiations. Australia contributed to that success, but we have more work to do to capitalise on it – and to potentially win the bid to host the 2026 COP," said Innes Willox, Chief Executive of the national employer association, the Australian Industry Group.
"Conferences Of the Parties are where nations meet to push forward the global response to climate change through agreed rules, national action and help for those who need it. This year there were major issues on each front.
"At this meeting, the priority was to mobilise finance for developing countries to allow them grow cleanly and adapt to climate extremes. The outcome was hard fought and agreed only with painful tradeoffs and very public expressions of unhappiness from many developing countries. Tripling the current USD$100 billion per year to USD$300 billion per year by 2035 is a very large shift, though far below the ambit $1.3 trillion of grants sought by developing countries. It has been made more manageable by broadening the contributor base in light of the emergence of China and other major economies and by recognising the importance of business investment mobilised by supportive public finance.
"There are opportunities for Australian businesses to supply infrastructure, equipment and services across our immediate region to nations in transition. The challenge is for Australia and other donors to structure their support to make it as easy as possible to crowd in private investment and for developing countries to provide the best investment environment possible.
"On national action, COP29 was the last meeting before Australia and all other countries are due to announce new national climate goals for 2035. While guidance on those goals was another focus no new outcome could be agreed - the price of agreeing a finance goal that major developing blocs were unhappy with. That means that the last clear global message to all parties on substantially stronger emissions plans is from 2023's COP in Dubai.
"While this is a major missed opportunity, it was heartening to see, on the sidelines of COP, details of the national emissions trading schemes being introduced or broadened in Brazil, China, India, Turkey and others. The European Carbon Border Adjustment Mechanism remains controversial at COP, but is clearly having an influence in the spread of carbon measurement and pricing around the world.
"At Baku there was a strong hope that the United States and China would continue their clean economy investments despite political change and geopolitical tensions. These developments will be widely watched over the coming year.
"Finally, an important set of rules around international carbon trading was finalised after more than 9 years of negotiation. This has significant implications for how Australia could meet its 2030 emissions targets and is evidence of the value of utilising multilateral structures as a mid-sized economy. Unilateral decisions on carbon trading will have an immediate impact on the global trading system on which so much of Australia's economic prosperity relies.
"Alongside the negotiations Australia has been bidding with Turkey to host COP31 in 2026. The result is now not likely until next June after the next Australian election.
"Hosting would give Australia's next government a huge set of opportunities – to steer a critical global issue with immense impacts on Australia; to strengthen relationships with our neighbours in an increasingly contested Pacific; and to showcase industries from resources to metals to energy to food, and build new markets for the clean economy products we can also excel in. With international visitor numbers five times those to the Melbourne Grand Prix, hosting COP also is a significant domestic economic prize," Mr Willox said.
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