COP29 officially began on Monday, November 11, with the opening ceremony attended by Sultan Ahmed Al Jaber, President of COP28, Mukhtar Babayev, President of COP29, and Simon Stiell, Executive Secretary of the United Nations Convention on Climate Change (UNFCCC).

COP29 has been dubbed the finance COP. This is because this year the 198 Parties are to agree on setting a New Climate Finance Goal: NCQG, New Collective Quantified Goal. This is to exceed the $100 billion annual target set at COP16 in Copenhagen (2009) for the period 2010-2025. An important COP, therefore, because it will serve to define a new goal and a new financing model for the benefit of all, ranging from public resources to financing through Multilateral Development Banks to private sector contributions.

After COP27 in Egypt, COP28 in the UAE, this is the third consecutive COP in a fossil-producing country. Economic development in Azerbaijan is strongly linked to oil and gas exports. To date, fossil fuels account for more than 90 percent of export earnings, 60 percent of government revenues, and 35 percent of Gross Domestic Product (GDP). Ninety-five percent of Azerbaijan’s exports are oil and natural gas, and European Union countries account for more than half of the country’s total exports.

What are the energy relations between Italy and Azerbaijan? Azerbaijan exports 57 percent of its oil to Italy, making our country the top destination market for Azerbaijani oil. For Italy, Azerbaijan is among the top suppliers of oil, averaging approximately 15 percent of total imports. Likewise, the country has proven to be an essential partner within Italy’s strategy of diversification from Russian gas. As of today, in fact, Baku exports about 20 percent of its gas production to Italy. Azerbaijan is Italy’s second largest gas supplier after Algeria, accounting to date for about 16 percent of Italy’s total gas imports. An ECCO study of relations, in the energy sphere, between Rome and Baku confirms an intensifying dependence on Azerbaijani gas. Dependence that runs up against a sharp drop in European gas demand and makes new infrastructure investments difficult to justify. Betting on gas not only runs counter to the goals signed in Dubai last year, but also exposes Italy and Azerbaijan to the risk of investing in infrastructure that risks rapid obsolescence and is unlikely to pay for itself.

The start of this COP was preceded by the election of Donald Trump as the new President of the United States of America. Victory that brought with it the bogeyman of a U.S. exit from the climate negotiating tables. Already in his first term, in 2016, Trump decided to exit the Paris Agreement. There is a good chance that this will be repeated. Luca Bergamaschi, Director and Co Founder of ECCO, tried to answer: what does Trump’s victory mean for the climate?

In this COP United States is still at it. U.S. Special Climate Envoy John Podesta said that “even though under Donald Trump’s leadership the U.S. federal government has put climate-related actions on the back burner, efforts to prevent climate change remain a U.S. commitment and will continue with confidence.” Podesta emphasized the importance of respecting the will of the people, but added that the fight against climate change is bigger than a single country election.

Highlights of the week

After adopting the work agenda, surprisingly-because no progress had been seen in years-a draft text was approved on Article 6.4 (this is the mechanism for trading credits between countries for emission reductions and removals, here for more).

The first days of the COP are devoted to the High-Level Segment, in which heads of state and government take turns in plenary for their speeches with the aim of giving political mandate to the negotiations. Despite its many absences, the COP remains the diplomatic forum with the largest participation of leaders, second only to the United Nations General Assembly. African leaders and those from many other countries of the Global South were present again this year to clamor for a robust financial agreement. Impacts are mounting in countries around the world, causing losses of more than $350 billion last year alone, but it is those most vulnerable who will pay the most, with consequences for all.

Few, unfortunately, have been noteworthy announcements. Prominent among them was the UK’s plan to cut emissions by 81 percent to 2035. An important step forward, which we also read as a message to Europe: shall we see who decarbonizes the domestic economy first and best? The European Commission’s proposal for a 90 percent cut in emissions to 2040 now no longer seems like science fiction. Touching was the speech by Pedro Sánchez Pérez-Castejón, President of the Government of Spain, who after the Valencia catastrophe emphasized that there is no turning back on the transition.

Many Leaders stressed the urgency of climate action and the need to unlock funding to achieve it. Greater economic commitments were called for from Turkey, Mauritania, and Kyrgyzstan. Such funding must be equitable and affordable according to Guinea-Bissau and Libya. The Democratic Republic of Congo and the Marshall Islands ask that funding cover adaptation and loss and damage and not just mitigation. The Marshall Islands also stress that climate finance cannot be loans at market rates and should not finance fossil fuels. Congo also stresses the importance of relieving countries’ debt burdens. Belgium and Maldives equate the importance of public finance with private finance. Focus on adaptation by Bulgaria. Several speakers referred to the need for innovative financial instruments (UNSG, Serbia, DRC, Barbados), increased transparency and accountability, and capacity building of Multilateral Development Banks (MDBs).

China sent a strong message about finance and the role it can play in global transition. In his speech at COP29, China’s Vice Premier, Ding Xuexiang, said that since 2016, China has voluntarily mobilized $24.5 billion for the transition of developing countries. For the first time, China refers to climate finance for developing countries with a developed country approach. Ding’s statement reflects China’s ability and willingness to calculate its climate finance contributions to developing countries, placing China’s contributions at the same level-if not higher-than the efforts of many developed countries.

 The U.S. and China held a summit on methane, one of the most collaborative topics between Beijing and Washington in recent years. Methane can be linked to 30 percent of the global temperature increase since 1850. Eliminating methane emissions could be one of the fastest ways to maintain the 1.5°C target.

What about Italy? Giorgia Meloni‘s presence at COP29 was a good signal for multilateralism, and she called on all countries to share responsibility for the new financial target. Meloni also recalled some commitments made at COP28 in Dubai, including tripling renewable capacity and duplicating energy efficiency. The president, however, did not announce any new financial commitments from Italy. In her speech, Meloni gave support to gas, contradicting Dubai’s climate commitments. A gift to the fossil industry, but one that risks exposing consumers and businesses to high energy costs and undermines sustainable development goals.

The PM, in her speech, left out the main achievement of COP28 in Dubai, the gradual exit from fossil fuels, emphasizing instead the role of “gas, biofuels, hydrogen, CO2 capture, and, in the future, fusion nuclear power that could produce clean, safe and unlimited energy.” However, with the COP28 Agreement, countries-including Meloni-led Italy-decided to start a pathway away from fossil fuels (all, coal, oil and even gas), while other technologies (nuclear, biofuels, CCS) were given a marginal role.

The TeraMed initiative and Italian public support toward renewable energy

COP29 was also an opportunity to relaunch and support the TeraMed initiative. The first regional implementation operation of Dubai’s commitment to triple renewables. The initiative was started by a group – growing steadily – of civil society organizations on both sides of the Mediterranean. To date, it has gained the support of major international players, the International Renewable Energy Agency (IRENA), the Union for the Mediterranean, the Arab League’s intergovernmental organization RCREEE on renewables and energy efficiency, and the world’s largest renewable industry associations, brought together in the Global Renewables Alliance.

The goal is to reach the target of 1 Terawatt of renewable energy in the Mediterranean by 2030 is ambitious, but within reach. The Mediterranean can offer a model for innovative and partisan cooperation between the global North and South. The potential for renewables in the Mediterranean is up to 4.5 TW. Potential investments amount to about $120 billion annually, and jobs created could amount to 3 million. The scenario thus opens up opportunities for electrification of industry, consumption, services and transportation.

However, public support toward renewable energy in Italy lags far behind. The E3F (Export Finance for Future) coalition released the annual report of export credit agencies, such as SACE, supporting the energy transition, compared to commitments made at COP26 in 2021 in Glasgow to end public financial support for international fossil fuel investments. Data for 2023 show a marked reorientation of public support toward renewable energy: only 13 percent of new deals are tied to fossil fuels, compared to 69 percent in 2015. Italy, with SACE lags far behind. In absolute terms, SACE has guaranteed €584 million for oil & gas projects, compared to only €303 million for climate projects accounting for only 34 percent of the total.

What prospects toward conclusion

There are so many issues on which to find agreement between the Parties. After the first few days, in which the pages of negotiating texts increased, synthesis will be needed towards the end of the negotiations. The real goal of this COP will not only be to define a number for the New Climate Finance Target, but it will be equally important that the modalities and quality of this finance be defined.