Claim your CPD points
I was once again honoured to represent the global actuarial profession at the 29th Conference of Parties (COP) climate summit, held this year in Baku, Azerbaijan, from 11-22 November. The International Actuarial Association (IAA) has been accredited as a non-governmental Organisation (NGO) with observer rights by the United Nations. This allows the IAA to send a representative to COP with "Blue Zone" access to the diplomatic area where negotiations are held, and where scientific and technical presentations are made in various country pavilions.
COP has two broad areas of activity. It is an annual gathering of the world's leading experts in climate, adaptation, technology, economics, and other disciplines where papers and studies are released and presented. It is also a diplomatic gathering, where member governments gather to negotiate agreements on matters such as emissions reductions and adaptation funding for developing countries. While the latter activity captures most of the media attention, the IAA's focus is on the former.
COP29 was promoted as the "Finance COP", where countries were expected to find ways to fund mitigation and adaptation activities in developing countries, particularly in the "Global South". Activists cited a need for several trillion dollars of annual funding, a level which is far beyond the capacity of wealthy countries to fund in the current political environment. In the end, negotiators promised around $300 billion of funding, far less than is required.
As a result, finance experts are increasingly turning to private capital and carbon markets for funding, trying to shift the governmental role to be creating the frameworks for action and seed money to initiate projects. Carbon markets, where emitters buy offsets which fund projects to remove carbon from the atmosphere or create low emissions energy for developing countries, are increasingly seen as a key to closing the funding gap.
The recent US election was a major topic of conversation, with many wondering if the election of Donald Trump will reverse progress on decarbonisation in the US and make it more likely that other countries will reduce efforts. Many made the point that the momentum for clean energy is so strong that no one country can stop it. A US Senate delegation came to COP to emphasise that there will continue to be progress despite the outcome of elections. Most countries pledged to continue efforts to promote emissions reductions, renewables, and sustainable practices.
The IAA is focused on building relationships with key organisations involved in climate policy and identifying opportunities for the profession to expand its footprint in emerging areas. From that perspective COP29 was a success, including:
APRA's Sean Carmody speaking at an NGFS session on adaptation at the Australia Pavillion
There is no question that actuaries have many opportunities in climate and sustainability in coming years. The Institute has recognised this by elevating the Climate and Sustainability Working Group to a Practice Committee and supporting the IAA in global efforts such as participation in COP. The Institute is evaluating ways to enhance education for students and members in this space (more on that in a future Actuaries Digital article). It is also active in public policy. I look forward to helping open doors for the profession in this growing area.
COP is an opportunity for various organisations to release reports on relevant topics. Following is a selection of them with links for those interested in further reading:
