Fast reading
- Progress on key mitigation and adaptation finance mechanisms raises prospects for blended finance, especially for investors and companies in emerging markets.
- Governments will develop implementation policies to build the investment case at the sector level behind national commitments.
- Policy uncertainty persists on fossil fuels, deforestation, and carbon markets.
Ten years on from the 2015 Paris Agreement at COP21, all eyes were on the Amazon-based COP30 to deliver concrete next steps for multilateral climate action against a fractured geopolitical backdrop.
Our delegation to COP30 engaged with policymakers, industry, and civil society in the blue zone – the official negotiating areas under UN jurisdiction – and the summit’s side events. We advocated for translating national commitments into investable sector transition plans, scaling blended finance, protecting forests and biodiversity, agreeing adaptation funding, and delivering a just transition that ensures transition policies meet citizens’ core needs.
After two weeks of intense negotiations and beleaguered by the heat and humidity of the negotiating rooms, delegates heralded the gavel signifying the adoption of the Belém Package.
An adaptation COP?
The UN’s latest emissions gap report stated that the world is likely facing a global temperature rise of 2.8°C this century, well above the Paris Agreement goal. Adaptation to the physical impacts of climate change was therefore a priority topic at this COP, concluding the Baku Adaptation Roadmap and emphasising the role of scaling international climate finance into adaptation. The final COP30 agreement ultimately saw countries call for “efforts to at least triple adaptation finance” by 2035.
While the language falls short of the binding commitments sought by developing nations, including small island states, the agreement secures adaptation finance as a key topic for subsequent COPs. Alongside progress on mitigation finance following on from the Baku to Belém Roadmap, this raises prospects for blended finance instruments to play a more significant role, as a catalyst for mobilising and scaling private finance behind climate and nature opportunities, especially in emerging markets.
Making the transition investable?
At COP30, we advocated for policymakers to bridge ambition and implementation by translating nationally determined contributions (NDCs) into investable projects and stable policy frameworks that attract long-term capital. We also advocated for the strategic development by governments and industry of sector transition plans, which could serve as the channels for policy development and value chain coordination.
While the UN’s process does not have jurisdiction over national policies, including sector policies, the final Belém package does reflect calls for making NDCs investable. The agreement formally “invites parties [countries] to develop implementation and investment plans for their [NDCs]”. This outcome – an evolution of the traditional invitations to improve the ambition of NDCs – reflects the heightened focus on ensuring national commitments are translated into investable delivery policies, which will inherently require a sector-specific lens. Governments including Australia, Japan, and the UK have already commenced developing sector transition plans.
Renewed national policymaking efforts aimed at unlocking the commercial cases for transition should expand capital allocation opportunities for companies and investors alike. We also expect these efforts will increasingly rest on stronger government and industry partnerships, motivating closer engagement across the transition planning ecosystem.
At COP30 we advocated for policymakers to bridge ambition and implementation by translating nationally determined contributions into investable projects and stable policy frameworks.
Uncertainty on thorny issues
The Belém package reflects a fractured world markedly different from the consensus-based international order conducive to the Paris Agreement in 2015. Negotiating blocs including the EU, UK, and small island nations had pushed for firm, coordinated actions to advance COP28’s agreement to “transition away from” fossil fuels, as well as efforts to halt deforestation.
However, diplomatic huddles could only secure support for the Brazilian presidency to develop roadmaps for transitioning away from fossil fuels and for reversing deforestation, which will sit outside the formal UN Framework Convention on Climate Change (UNFCCC) architecture. For companies and investors navigating the energy transition and deforestation risks, uncertainty persists.
No stable climate without nature
Convening at the gateway to the Amazon rainforest, delegates could not overlook nature’s role in underpinning a stable and prosperous climate. Delegates to COP30 enjoyed an early win in the form of Brazil’s successful launch of its novel Tropical Forest Forever Facility (TFFF) at the very start of the summit with more than $5bn of funding. The fund aims to scale investment into the protection of rainforests, which is crucial to support mitigation efforts.
Climate policies must deliver on livelihoods
COP30’s Just Transition Work Programme (JTWP) successfully secured agenda time and resulted in the adoption of a new institutional mechanism to support equitable workforce and consumer transitions globally in the final text of the Belém Package.
The final text saw countries aiming to “enhance international cooperation, technical assistance, capacity-building, and knowledge sharing, and enable equitable inclusive just transitions”. While the mechanism remains nascent and its ultimate impact unknown, its formal adoption marks a significant shift in representation of workforce and affordability considerations within the formal UNFCCC architecture.
COP31 will be hosted by Turkey and presided over by Australia. We expect that the funding of both mitigation and adaptation mechanisms will be the centrepiece of international negotiations, while nature and just transition workstreams will require continued development.
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