While emerging economies (EMEs), apart from China, have contributed little to global warming, the future CO2 emissions curve and the resulting additional temperature rise will largely hinge on their ability to conciliate growth and decarbonisation. However, due to limited financial resources, their investments in the “green“ transition are low, at around 50 dollars a year per capita, compared to investments which are around seventeen times higher (850 dollars a year per capita) in developed countries1. This disparity gave rise to the idea of securing transfers from developed to developing countries at the Copenhagen Conference of the Parties (COP), in 2009. As a result, developed countries have pledged to help developing countries to fight the effects of climate change, with USD 100 billion of transfers per year. In 2024, in Baku, this target was raised to USD 300 billion per year. While the amounts are tripled on paper, past and present dollars don’t compare well due to inflation. Based on a constant 2024 price level, transfers are rather doubled. They more or less meet existing EMEs green investments, but definitely not those required to keep global warming under +1.5°C (see chart). Nevertheless, the USD 300 billion amount is not trivial, in times of budget constraint, and with the United States on the cusp of leaving the Paris Agreement once again. It is also being reached with no commitment in return to move away from fossil fuels (an European Union demand) and no formal participation from China, which will continue to provide climate financing on a voluntary basis. The discrepancy with the USD 1.3 trillion figure targeted (and set as a goal in the COP 29 announcement) reflects accurately the current situation: public finances alone will not be able to cover all needs and private savings will have to come into play to support the effort. The challenge is not just financial. Here, the legal environment of contracts, the political risk management, the monitoring by international institutions, the support from guarantee systems, etc., count as much as the USD billions that add up. Climate financing for emerging countries is not a standard undertaking, as it is a multi-faceted effort involving many different stakeholders. Despite their shortcomings, only COPs can provide the multilateral framework required to move the convoy forward. Even with the small steps made in Baku, the progress achieved by COPs is always better than the alternative of everyone going alone for themselves. EUR/USD trades in negative territory slightly below 1.0550 on Thursday. Soft inflation data from Germany makes it difficult for the Euro to gather strength, causing the pair to stretch lower. US markets will remain closed in observance of the Thanksgiving Day holiday. GBP/USD stays under modest bearish pressure and fluctuates below 1.2700 on Thursday. The US Dollar corrects higher following Wednesday's sharp decline, not allowing the pair to gain traction. The market action is likely to remain subdued in the American session. Gold (XAU/USD) reverses an intraday dip to the $2,620 area and trades near $2,650 on Thursday, albeit it lacks bullish conviction. Investors remain concerned that US President-elect Donald Trump's tariff plans will impact the global economic outlook. Fantom (FTM) continued its rally and rallied 8% until Thursday, trading above $1.09 after 43% gains in the previous week. Like FTM, most altcoins have continued the rally as Bitcoin (BTC) recovers from its recent pullback this week. The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.

No one left this year’s United Nations climate conference happy, but the talks were still an important marker.

The world’s most important climate talks were pulled back from the brink of collapse after poorer countries reluctantly accepted a finance package of “at least” $300 billion a year from wealthy nations after bitter negotiations.