Page 24 - bne IntelliNews monthly magazine December 2024

24 I Companies & Markets bne December 2024
The warmest October in Europe was recorded in 2022, with temperatures 1.92 degrees above average.
Europe experienced severe flooding in multiple regions during October, which scientists linked to intensified rainfall driven by climate change. On October 29, extreme rainfall caused devastating floods in Valencia, eastern Spain, claiming more than 200 lives. Italy’s Emilia-Romagna region was also hit hard by flooding starting October 16.
Other parts of northern and western Europe, including the Iberian Peninsula, France, northern Italy, Norway, northern Sweden and areas east of the Black Sea, saw significant rain- fall as well, according to C3S.
Elsewhere, wetter-than-average conditions were observed in southern and eastern China and Taiwan, where Tropical Storm Kong-rey brought heavy rain at the end of the month. In the United States, Hurricane Milton caused major flooding in Florida, fuelled by a combination of heavy rain and storm surges.
In contrast, exceptionally dry conditions persisted in parts of the United States, Australia’s central lowlands, southern Africa, Madagascar, Argentina and Chile, where a severe drought continues.
The extent of Antarctic sea ice remains near historic lows. In October 2024, the average sea ice extent was 17.1mn square kilometres, 8% below the 1991-2020 average for October and the second-lowest extent on record for this month, after the record low of -11% in October 2023. This trend of minimal sea ice coverage has persisted since early 2023.
Parts of the South Atlantic, Indian Ocean, and northern Ross Sea regions saw particularly low sea ice concentrations up to the end of October. In the Arctic, the sea ice extent in October was 19% below the 1991–2020 average, marking the fourth-lowest extent in the satellite data record. By October 31, Arctic sea ice coverage was only 8mn square kilometres, the third-lowest level recorded for that time of year, following 2016 and 2020.
Lax rules agreed at COP29 for global carbon trading market
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After failed talks in Azerbaijan at COP29, members
did agree, however, to a carbon credit trading market. But it has such broad rules, the system may mean little improvement in emissions – or even higher emissions by buyers.
It had been nearly a decade since such a global carbon trading market was first proposed by the international community in Article 6 of the 2015 Paris Agreement.
The final text, agreed to late on November 23 and dubbed the Paris Agreement Trading Mechanism, was a compromise in the end. Attendees agreed to rules on how countries can create, trade and register credits. Trading could start as soon as next year.
Carbon credit trading means that a more-emitting country such as Japan or Germany or a company can buy a one-tonne CO2 credit from a poorer location where, for example, trees have been planted or a wind farm built. It helps transfer wealth to the developing world and in theory cuts emissions.
In practice, the nascent market has proved hard to track and verify, and vulnerable to fraud. The market was worth more than $2bn in 2022. But its market value has since more than halved amid a lack of clarity and structure.
Kevin Conrad, the leader of the delegation for a group of heav-
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ily forested countries, such as Bolivia and Democratic Repub- lic of Congo, told the Financial Times after the deal was truck: “Properly regulated, markets can become a force for good, and start to reverse the market failures causing environmen- tal and atmospheric destruction”.
With the hope that the market would be hammered out, preliminary deals have already been signed. Trafigura, the commodity trader, announced what it called a pilot carbon deal to help Mozambique develop climate restoration projects.
Norway has set aside $740mn for the carbon trading market and signed deals with Benin, Jordan, Senegal and Zambia.
Indeed, some delegates and observers view the COP29 agreement as a final chance to forge a successful carbon trading market.
“International carbon markets have crashed twice in two decades. This was due to an erosion of credibility. At Baku, the ‘operationalisation’ of international carbon trading under Paris can prevent a third meltdown that could be fatal,” Axel Michaelowa, of the University of Zurich, told the Guardian.
“They are a powerful tool to accelerate the diffusion of low-carbon technology around the world. The Paris carbon market is now ready to roll out in 2025. It can accelerate mitigation and thus help close the gaping emissions gap that