At COP29, it was finally agreed that rich countries will pay developing countries some $300 billion a year by 2035 to help them cope with the effects of the climate crisis. Earlier in the climate talks, held in Azerbaijan, it had been agreed that the most vulnerable countries need $1.3 trillion a year to adapt to and combat the consequences of climate change. So, the final figure has been criticised by many. The question though remains as to who and how will actually pay this money.
India accused the COP presidency of agreeing the “paltry sum” without hearing the country’s opposition to it. Nigeria called the figure a “joke”. And Malawi said that for the least developed countries it was “not ambitious”. Others say that any deal is better than no deal, considering it had looked like negotiations could collapse after developing countries walked out of the room when $300bn was proposed, saying their “needs are known” and “they are being ignored”.
The current Monthly Analysis, which is available here, examines in detail the key outcomes of COP29, argues that decarbonisation remains a key challenge in (SE) Europe and analyses the miniscule changes in regional CO2 emissions, as the energy transition is moving much slower than initially anticipated.
As already mentioned, COP29 has set a historic $1.3trn climate finance goal by 2035, with a $300 billion core target for developing countries. However, the transition to decarbonised power generation is not an easy global or regional issue, since electricity generation in several countries, which is mainly based on coal and lignite, supports thousands of jobs while it forms the basis of an extensive industrial base. Although all countries in the SEE region to a greater or smaller extent are committed to RES and energy efficiency programmes and specific targets, they are also pursuing a parallel carbonisation agenda as a number of coal-fired power plants are under construction or at an advanced planning stage.
The road to decarbonisation can be approached on two levels: (a) through policy addressing the energy mix and assessing the optimum rate of decarbonisation and investment in economic terms; and (b) through technology, whose penetration depends on the policies to be implemented and could contribute significantly towards decarbonisation. Good examples are the use of CCS/CCU or dual-fuel power plants, analysed by IENE in its “SE Europe Energy Outlook 2021/2022” study.
The arduous and complex decarbonisation process in SE Europe is further burdened by a strong coal/lignite legacy and serious energy security issues. Rapidly increasing carbon prices and stricter EU regulations on air-polluters will bankrupt outdated lignite-fired power plants in the region over the next decade, making them politically untenable. Rising carbon prices will require ever bigger state subsidies for power plants, which is clearly not sustainable. Without such subsidies, fossil-based generation will make no economic sense.
