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Companies with big carbon footprints face a new era of heightened scrutiny.

Increasing satellite surveillance of greenhouse gas emissions means governments are getting a lot better at tracking big polluters, US Special Presidential Envoy for Climate Change John Kerry said at the COP28 summit in Dubai on Monday.

“You can run but you can’t hide,” Kerry said. “And we have to be prepared to name and shame.”

US National Aeronautics and Space Administration satellites will be able to pinpoint methane leaks and assess the carbon footprints of international companies that have promised cuts, Kerry said. 

Kerry’s remarks came during a meeting of environmental ministers focused on cutting methane, the outgrowth of a Global Methane Pledge the US and EU launched at COP26. The initiative, which targets a 30% reduction in the powerful greenhouse gas by 2030, has now been signed by 155 countries, including Kazakhstan and Turkmenistan. Kosovo has also indicated it will join, Kerry said.

Another initiative — the methane alert and response system — was also unveiled on Monday. The partnership between the United Nations Environmental Program, the Netherlands Institute for Space Research, the French Energy Research Institute and the International Energy Agency “will pinpoint exactly where the leaks are from,” said Inger Andersen, executive director at UNEP. 

“Either we will go directly and notify the government or we will notify the company,” she said. “But notify we will.”

African, Asian Oil Industry Leaders Get Training on Methane Cuts in US (7:18 pm)

Oil and gas industry leaders from Nigeria, Kazakhstan, Turkmenistan and Uzbekistan will be traveling to the United States next year to learn from their American counterparts how to stem methane emissions, the US Trade and Development Agency said Monday.

The so-called reverse trade missions are meant to ensure oil industry leaders in those nations have a firsthand look at the best technologies for measuring emissions, detecting leaks and swiftly repairing them. The work is a recognition that while some US oil companies have worked aggressively to stem methane leaks from their operations, many other countries and national oil companies are only getting started.

The agency has set aside funding to sponsor similar sessions for 16 countries, with reverse trade missions involving representatives from Latin America and North Africa this year.

OPEC Continues Quarrel With IEA (6:40 pm)

OPEC’s Secretary General Haitham Al-Ghais once again attacked the International Energy Agency, continuing the oil industry’s months-long disagreement with the Paris-based agency. The IEA’s comments about keeping oil in the ground will lead to “energy chaos,” he said at the Saudi Green Initiative summit in Dubai, where COP28 is being held.

“The IEA are becoming the energy activists of the world,” he said.

OPEC and top oil and gas companies are already actively taking part in the energy transition, he said.

World Bank Unveils Methane Program (6:30 pm)

Developing nations and their national oil companies will be able to tap into hundreds of millions of dollars in grants to target methane emissions under a new World Bank program unveiled Monday at COP28. The Global Flaring and Methane Reduction Partnership will initially be capitalized with $255 million in donations with support from the United Arab Emirates, United States, Germany, Norway, BP, ENI, Equinor, Occidental, Shell and TotalEnergies.

It dovetails with other initiatives announced at the summit, including a pledge by 50 oil companies to drive their methane emissions to near-zero levels by 2030, and a transparency program that aims to use satellite surveillance to hold oil producers accountable. Meanwhile, the European Union is moving to limit methane emissions from imported oil and gas. 

To access support, companies will need to commit to cutting methane intensity by below 0.2%, halting routine flaring of natural gas by 2030 and measuring and reporting emissions.  

Jonathan Banks, senior climate policy adviser at the Clean Air Task Force, described the initiative and other methane measures announced at COP28 as “the single greatest action we can take to finally start bending the curve on climate.”

JPMorgan’s Pinto Says Basel Rules Could Hamper Green Lending (5:15 pm)

Daniel Pinto, chief operating officer of JPMorgan Chase & Co., said that a US proposal for new rules based on Basel standards would leave the bank facing a 25% increase in capital. That would “reduce our ability to finance every sector of the economy, and for sure, the ability to finance the green economy,” he said.

What’s more, the capital intensity for tax equity, a key tool for financing wind and solar projects, would increase by four times, according to Pinto.

Pinto also joined others in underscoring the need for a high-integrity voluntary carbon market. Companies “need a mechanism to bridge their transition,” Pinto said. “Carbon offsets should not be the objective: The objective is to transition the company into zero or lower. And in the meantime to take advantage of the carbon certificates is a very good thing.”

But such credits need to be “properly scrutinized” and “properly audited,” he said.

Offsets Can’t Substitute Emissions Reductions, UN Official Says (5:09 pm)

Voluntary carbon markets can be a tool in the fight against global warming but they shouldn’t serve as a substitute for pollution cuts, according to UN Climate Change Executive Secretary Simon Stiell.

The world isn’t on track to meet 1.5C, and market mechanisms have the potential to help reduce emissions, Stiell said at the COP28 conference in Dubai on Monday. But they can’t just replace efforts by governments and businesses to cut greenhouse gases. The VCM also needs to ensure transparency, safeguard human rights and avoid double-counting, he said.

World Bank to Securitize Part of Balance Sheet (3:51 pm)

As the World Bank commits 45% of its financing to climate by 2025, it will also seek to raise capital through partnerships and by securitizing parts of its balance sheet, its president, Ajay Banga, said in an interview on Bloomberg Television. 

Large-scale climate finance requires the private sector, which could entail instruments like local currency bond issuance dealing with foreign exchange risk, he said.

UK Agency Embraces Pause Clauses on Debt (3:45 pm)

UK Export Finance has agreed to add clauses to its loan agreements with Senegal and Guyana that allow for the deferral of debt payments in the wake of climate crises like hurricanes and floods.

UKEF’s offer of so-called pause clauses is under consideration by a further ten countries, the UK Treasury said on Monday. Canada also announced it would offer the clauses to debtor nations, France is “expanding” its existing offer, while the World Bank is “extending their pilot to existing loans,” the UK Treasury said.

Pause clauses release “much needed finance when we need it most,” the president of Senegal, Macky Sall, said in a statement. “We call on other creditors to offer climate resilient debt clauses by the end of 2025.”

Dutch Finance Minister Says Not Clear What Wilders Will Do (3:00 pm)

Dutch Finance Minister Sigrid Kaag said she doesn’t know whether Geert Wilders will be able to implement some of his pledges, such as exiting the Paris climate accord, dismantling green funds or calling a referendum on leaving the European Union.

If you look at Wilders’ international cooperation agenda, “it’s a big tally,” Kaag said in a Bloomberg TV interview on the sidelines of the summit. “How realistic is it? I don’t know, it depends on the other parties he is willing to negotiate with.”

Kaag also said her centrist D66 party has been very clear it will never join a government that’s led by Wilders.

Al Jaber Responds to Anger Over Comments (2:29 pm)

The COP28 president and engineer by training said “science has guided” his life, in response to comments from November that surfaced of him saying there’s “no science” behind the assertion that fossil fuels have to be phased out to keep global temperatures from rising 1.5C. 

“The science says that we must get to net zero emissions by 2050, and we must reduce emissions by 43% by 2030” to keep the temperature goal in sight, he said in response to questions about the comments. He did not address projections on fossil fuel use.

He said the report is part of a “consistent” effort to undermine the work of COP28.

BlackRock’s Fink Seeks a Rethink of Financial ‘Architecture’

Larry Fink, the chief executive officer of BlackRock Inc., urged his peers at the COP28 climate summit to rethink the fundamentals of finance, in order to channel capital to where it’s most needed in the fight against climate change.

“The architecture for financing the developing world — the Global South — today is at best not what it should be,” Fink said in Dubai on Monday. “The opportunities we see to use blended finance I believe is the beginning,” he said. “This is a must, not just an option. We will not be able to mobilize enough private capital if we don’t do blended finance.”

“I urge all of us to think about how can we find a way to recreate the financial architecture so we can decarbonize the entire world safely, soundly and justly,” Fink said.

Major Investor Launches $3 Billion Renewables Fund (1:16 pm)

One of the world’s largest renewables investors has launched a $3 billion fund to raise money to plow into projects in emerging markets.

Denmark’s Copenhagen Infrastructure Partners has launched the fund, focusing on wind, solar and energy storage, as such developments spread further beyond the developed world. The inequality of climate finance has been highlighted during COP28, where parties agreed on a new fund to compensate vulnerable countries hit by extreme weather events due to climate change.

China’s Envoy Says Its Methane Policies Are Misunderstood 

“Few know that China has made large achievements on controlling” methane, Xie Zhenhua, China’s climate change envoy, said. He stressed that the world’s biggest emitter has had limits on methane in its national climate change program since 2007.

Even before the release of its long-awaited plan to tackle methane earlier this year, several relevant schemes were already in place in sectors such as energy and agriculture, Xie said. China sees methane as a source of energy and a raw material that can be optimized, he said.

Relaunch of China’s Carbon Trading in Sight 

China Beijing Green Exchange Chairman Wang Naixiang said the restart of the country’s long-stalled carbon credit trading is close. The exchange will long-awaited plan host training sessions for market participants to better understand the new China Certified Emissions Reduction credits, or CCERs, he said.

The CCER scheme was started in 2012 but the small volume of transactions meant new projects stopped being registered in March 2017. The government said in October that credits issued before the system was halted can’t be used by emitters to comply with CO2 targets.

Fossil Fuels Have ‘Role to Play,’ UAE Climate Minister Says (11:55 am)

“Fossil fuels have a role to play, a much smaller role to play,” UAE Minister of Climate Change and Environment Mariam Almheiri said in an interview on Bloomberg Television on Monday. The “phasing up” of renewables should be the focus, she said, adding that the building of renewable energy systems itself required energy.

Her comments addressed controversy surrounding COP28 President Sultan Al Jaber’s statements that there were no indications “that the phase out of fossil fuel is what’s going to achieve 1.5.”

Carbon Offset Market Faces Overhaul After Scandal (11:52 am)

Rostin Behnam said the Commodity Futures Trading Commission, which he chairs, will later today announce proposed voluntary carbon markets guidance. “The proposal does represent, in my view, the most significant step of the US financial regulator to support widespread adoption of principles for high integrity markets,” he said.

Figuring out how to tackle weaknesses in the voluntary carbon market is a key goal of this year’s COP summit. The VCM has been hit by a string of scandals that have raised serious questions as to the validity of the offsetting claims made by those buying carbon credits.

StanChart, Macquarie CEOs Calls for Better Data to Boost Green Investment (10:45 am)

The bosses of Standard Chartered Plc and Macquarie Group Ltd. said better data around emissions and the viability of green projects — particularly in emerging markets — was essential to unlock more investment for green projects.

“It all starts with data,” Bill Winters said at the Bloomberg Green Festival from the COP28 climate summit in Dubai.

His comments were echoed by Macquarie’s Shemara Wikramanayake, who also underlined the need to tailor climate solutions to different parts of the world.

Both CEOs emphasized the importance of co-operation between governments, financiers and organizations like the World Bank to create projects that pension funds can invest in.

IEA Wants 60% Emissions Reduction from Big Oil by 2030 (9:37 am)

Fatih Birol, executive director of the International Energy Agency, wants oil companies to commit to reducing their Scope 1 and 2 emissions by 60% by 2030, he said in an interview on Bloomberg Television on Monday.

“I need a 2030 number, not a 2050 number,” Birol said. This is a “moment of truth.”

Increased investment in clean energy technologies should be another major commitment from fossil-fuel companies at COP28, Birol said, adding that the rhetoric from oil and gas executives around green energy pales in comparison to actual investments. They speak “80%-90% of the time about clean energy, but when you look at their numbers, which we do at the IEA, only 2.5% of their own investment goes into clean energy.”

Birol said he expects global oil demand to peak before 2030, driven by clean energy and slowing demand from China, without elaborating on relations between the IEA and OPEC. 

--With assistance from Ewa Krukowska, Tom Metcalf, John Ainger, Todd Gillespie, Sarah Jacob, Alfred Cang and Malaika Kanaaneh Tapper.

(Adds rolling commentary from COP28. A previous version corrected a typo in the spelling of the second reference to the surname Behnam.)

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