However, it also delivered other important announcements for investors in terms of carbon markets, new energy initiatives and a renowned focus on climate justice. First was the breakthrough agreement on carbon trading under Article 6.
Countries approved standards implementing carbon credit trading between nations under Article 6. These standards could enable the launch of a UN-backed international carbon market and with this, key opportunities for private investment, with credits expected to be available as early as Under Article 6. Overall these agreements bolster the integrity of carbon markets for investors and should help to decrease decarbonisation costs and subsequently increase capital allocation towards climate projects.
COP29 also saw a renewed focus on accelerating the energy transition, albeit with uneven progress between countries. More broadly, three new energy initiatives were launched: a pledge to deliver a six-fold increase in global energy storage capacity, a commitment to increase green hydrogen production and a pledge to establish green energy zones and corridors designated areas where renewable energy projects are concentrated to increase efficiency and pathways that facilitate the transmission of renewable energy from production sites to consumption centres.
Debates around fossil fuel subsidies were reignited, with calls for clearer subsidy phase-out timelines but only a handful of countries committing to do so.
Such regional disparities in policy are likely to increase uneven progress on the transition, with some countries presenting more energy opportunities relative to others for investors. One area where we did see greater agreement was around transition plans, which will be crucial for driving forward decarbonisation and helping investors to reach their net-zero commitments. Recent climate data, released just before the summit, indicates that temperatures will rise above 1.
