On the eve of the 30th United Nations Climate Change Conference (COP30) in Belém, Brazil, taking place from 10 to 21 November, Jean-Philippe Desmartin at Paris-based Edmond de Rothschild Asset Management discusses Brazil’s positive force in the talks.

Jean-Philippe Desmartin (pictured), head of responsible investment at Edmond de Rothschild Asset Management, is quite optimistic about the outcome of COP30, with Brazil playing a positive role. This is inspite of the fact that the EU has been less ambitious in its demands for the 30th United Nations Climate Change Conference in BelĂ©m and that US President Donald Trump will not be present,

The city’s candidacy was announced by Brazilian president Lula da Silva at the COP27 in Eygpt. COP30 will focus on the efforts needed to limit the global temperature increase to 1.5°C, the presentation of new national action plans on emissions â€“ called nationally determined contributions (NDCs) under the Paris Climate Change Agreement â€“ and progress on the finance pledges made at COP29. The Paris agreement, designed to limit global temperature rises to 1.5°C and to keep them well below 2°C, lays the groundwork for the planned UN-backed carbon market.

Protecting the Amazon and other tropical forests is also a major theme. This includes plans to launch the “Tropical Forests Forever Fund” to provide funding for conservation efforts. There will also be discussions on the transition from fossil fuels and scaling up renewable energy.

In an interview with this new service last week, Desmartin said that Brazil, China and India are ambitious about fighting climate change and are playing a strong role in the global transition to clean energy.

“However, unsurprisingly, the US is the big elephant in the room, after US President Donald Trump pulled out of the global Paris agreement and will not be present at the talks,” he said. “Saudi Arabia, which is reliant on fossil fuels, also wants to slow progress at COP30,” he added.

“The EU has also been less ambitious than expected in its approach. It is lost in the middle of nowhere,” Desmartin continued. “Nordic countries like Denmark and Sweden remain ahead on climate change but France is not at the forefront of the talks anymore while Germany is struggling with its automobile industry. Poland and Hungary are also laggards. Climate change is no longer a priority for the EU but it is good they got a deal."

The conference is going ahead at a time when arguments about how developed and developing nations will cut overall carbon emissions and tackle human-caused climate change continue, along with the desire to use financial muscle to drive change remaining an important wealth management issue.

Emission cuts
The new EU NDC submitted to the United Nations Framework Convention on Climate Change (UNFCCC) last week is to reduce net greenhouse gas emissions (GHG) by 66.25 to 72.5 per cent below 1990 levels by 2035, covering all sectors of the economy and all greenhouse gas emissions. This is on the path to a 90 per cent net reduction by 2040 compared with 1990 levels, in a bid to achieve EU climate neutrality by 2050. However, there are "flexibilities" that could weaken this aim.

The weakened target would let countries buy foreign carbon credits to cover up to 5 per cent of the 90 per cent emissions-cutting goal and use international carbon credits to meet a further 5 per cent of the reductions. On Friday, the EU also backed a declaration on the Open Coalition on Compliance Carbon Markets at the world leaders segment of the United Nation's Climate Change Conference – COP30. The declaration boosts the recognition of carbon pricing and market mechanisms as tools for advancing climate action globally and implementing national climate plans.

“The UK meanwhile remains positive on combatting climate change. It is doing more work on offshore wind, with renewables providing the majority of the nation’s electricity,” Desmartin continued. Spain and Portugal also have a lot of renewable energy capacity, with Portugal and Spain leading the way with wind and solar power.

However, Desmartin believes that the good news will come from the host country Brazil, and above all from China as well as from India and other countries in the Southern Hemisphere, which are more affected by climate change than the Northern Hemisphere.

Brazil has one of the world’s cleanest energy mixes with 89 per cent of its electricity coming from renewables, primarily hydropower, supported by a growing wind and solar sector. While China still relies on fossil fuels, it produces more than 80 per cent of all solar photovoltaic panels, half of the world’s leading electric vehicles and a third of its wind power. â€śThe country also wants to continue reducing its fossil fuel consumption and doesn’t have much oil,” Desmartin said.

“While the US says “drill baby drill,” renewable energies are becoming more competitive and “cheaper, baby, cheaper,” with solar energy at the forefront,” he continued. “It also creates local and sustainable jobs, more numerous than in the fossil fuel sector, and helps boost energy security,” he added. India has also developed its renewable energy capacity considerably, Desmartin continued, driven by growth in solar and wind power.

Desmartin was positive about Brazil-led plans to launch the “Tropical Forests Forever Fund” to provide funding for conservation efforts, projected at $125 billion. Brazil has pledged $1 billion to the fund. However, although the UK is supportive of the plans, it has decided not to contribute to the fund, given its own budget constraints with the UK’s Autumn Budget looming. Both UK Prime Minister Keir Starmer and Prince William are attending the talks, together with EU Commission President Ursula von der Leyen, French President Emmanuel Macron and German head of government Friedrich Merz, amongst others. Other countries are also providing less than was hoped for.

Meanwhile, Olly Hughes, managing director of forestry at Gresham House, a specialist alternative asset manager, is also hoping for a positive outcome on forestry. “While COP30 will address a broad array of objectives – with a strong focus on nature, forests and biodiversity – we hope that sustainably managed, productive forestry will be recognised as a crucial part of integrating forests into global climate mitigation and adaptation efforts,” he told this news service. “Above all, we want to see nature made more visible in financial decision-making.”

In addition, Desmartin thinks the "climate" and "biodiversity" COPs should be merged under the same banner, arguing that the interdependent element of the climate and nature crises have precipitated this need.

Despite concerns about the outcome of COP30, Desmartin said that without the Paris Climate Change Agreement, the world would already be much further behind in combatting climate change. Representatives from some US states will be present at the talks; California, for instance, could provide a positive surprise, he added, with 66 per cent of its power coming from renewables in 2023.

Last year, Edmond de Rothschild AM announced that €26 billion ($28 billion) of its assets under management – or 47.5 per cent of in-scope assets – would be managed in line with attaining net zero emissions by 2050, underscoring the firm’s commitment to addressing the global challenges caused by climate change. The firm also recently launched a climate-focused emerging market bond fund to tackle global warming. The Edmond de Rothschild Fund EM Climate Bonds, which is classified under Article 9 of the EU’s Sustainable Finance Regulation (SFDR), invests primarily in green bonds in emerging markets. See here. Read more about COP30 and COP29 here and here.