BBVA encourages the leaders of COP29 to “double down” on climate change action

The signatories emphasize that they welcome the commitments made at the Dubai conference in 2023 (COP28) regarding renewable energy and energy efficiency, as well as the consensus around phasing out fossil fuels in a just, orderly and equitable manner while strengthening the nexus with nature, food and health. But they urge governments and companies to promote policies that foment investment and the opportunities climate action can bring for the economy.

The Chairs and CEOs that belong to the alliance also stress that “governments and the private sector need to enhance collaboration to deliver on the Paris Agreement goals,” in order to close the 600Gt emissions reduction gap by 2050 and limit global warming to 1.5ºC over the pre-industrial era.

The crucial role of governments in reaching net zero emissions by 2050

The signatory Chairs and CEOs are calling for the implementation of the several policies to improve climate action and spark investment:

• Ambitious and credible development of the Nationally Determined Contributions (NDC). “We call on governments to upgrade their NDCs and international collaboration to close the gap,” they state in the letter, where they also emphasize that the Global Stocktake shows that the nationally determined contributions,” which represent each country’s efforts to reduce emissions and adapt to the effects of climate change – only provide for around five percent of emissions reductions by 2030. This is “far short of the 43 percent needed.” In addition, they ask governments to develop predictable sector-specific and demand-based climate policies and clear transition plans that facilitate and incentivize private investment.

• Scale up climate finance from billions to trillions and reduce the risk of private capital flows. The world needs between $5.8 to $5.9 trillion annually for climate finance by 2030, covering both mitigation and adaptation. The New Collective Quantified Goal must be raised significantly to help developing countries disproportionately affected by climate change. It is also crucial to put in place mechanisms to attract efficient mobilization of private capital at scale.

• Remove transition obstacles to deliver on COP28 pledges. Currently, “total capacity of renewables awaiting permits is five times higher than installed capacity. 80 million kilometers of additional green grid will be needed by 2040.” To prevent higher energy demand from being supplied by investments in fossil fuels, local authorities should remove obstacles around permits for grid readiness projects;  increase demand for renewable energy through greater electrification of heat, transport and industry; and improve energy efficiency through fiscal policies such as tax relief for investments in this area.

• Support breakthrough technologies to reach commercial scale and complement cost-competitive solutions. According to the WEF, 30 percent of key technologies for climate change mitigation still face significant cost disadvantages, particularly in sectors such as transport and agriculture. Furthermore, “scaling these technologies, including clean hydrogen, biofuels and carbon capture, is crucial to achieving industrial carbonization.” As the letter explains, we need supportive policies, incentives, streamlined processes and green public procurement targets to spur the market, facilitate uptake and reduce green premiums.”

The declaration also underscores that “governments cannot act alone” and calls on business leaders “to commit strategically and financially” to the goal of reaching net zero emissions. Therefore, they ask their peers at other companies “to demonstrate leadership and responsibility in decarbonizing their operations and value chains (customers and suppliers) by setting science-based targets, disclosing progress and developing climate transition plans, consistent with evolving frameworks and standards.” In this regard, they point to the importance of companies also supporting their suppliers - including small and medium-sized enterprises - so they can decarbonize “through technical assistance, capability building, knowledge sharing and financial mechanisms such as green premiums and investments in advanced climate technologies.”

The Alliance of CEO Climate Leaders

The World Economic Forum’s Alliance of CEO Climate Leaders (WEF) - comprised of more than 130 companies from 26 countries and 12 industries - is the largest global community of business leaders in the world. It meets twice a year to exchange ideas and build consensus. Its  goal is to gradually increase climate action in all sectors and value chains. In addition, it aims to get policy makers involved in contributing to the transition to an emission-free economy, with the goal of cutting emissions in half by 2030, and reaching zero emissions (net) by 2050. BBVA has been a part of this alliance since 2021.

COP29 in Baku, Azerbaijan

The United Nations Climate Change Conference 2024 (COP29) will be held from November 11th - 22nd in Bazu, Azerbaijan. This summit will cover the national climate commitments (NDCs) for 2025. These commitments were already discussed at COP28, where the need to align them with the goal of maintaining an average global temperature below 1.5ºC was emphasized. Other key topics include the continuity of the implementation of the Fund for Responding to Loss and Damage, progress on transparency tools, developments in the work of the United Arab Emirates regarding a just transition, and enhanced support for the National Adaptation Plans. COP29 will also work to find new fiscal and climate financing solutions, such as doubling funding for adaptation and finalizing regulations around carbon market mechanisms.