Ignore the gloom: Why COP30 was a success
Sentiment around COP30 in Belém was decidedly downbeat. As negotiators decamped to the Brazilian rainforest for the latest round of climate negotiations, dignitaries took turns to bemoan the lack of attendance from heads of state at the summit.
In reality, the 30th Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) should be regarded as one of the more successful meetings since the agreement was first signed in Rio in 1992. 2025 was always set to be a pivotal moment for global climate talks. When countries gathered in Paris for COP21 in 2015, they agreed that 2025 would be the deadline for submitting new, more ambitious emissions-reduction pledges for the period beyond 2030.
See more: PA Future coverage of COP30 so far
These updated Nationally Determined Contributions (NDCs), covering targets for 2035, were always going to be the central deliverable for COP30, despite many other agenda items, from deforestation to carbon markets, and climate finance to adaptation.
Coverage of COP30 has focused heavily on what was missing, particularly any firm pledge on fossil fuels, but the decisions that did move forward still carry real weight. While the new NDCs may appear as aspirational targets today, they represent clear policy signals that will shape regulatory frameworks, sector economics, and sovereign risk for years to come.
At LSEG, we have been tracking NDCs closely to assess how decarbonisation trajectories shape sovereign climate risk – helping investors understand transition risk exposure across markets as governments set the pace of emissions cuts.
See also: COP30 so far: ‘Defeat the climate deniers’, UK’s ‘moral failure’ and calls for real implementation
Yet the year was off to a challenging start for the NDCs. In January, the US, the world’s second largest emitter and world’s largest economy, signalled it would withdraw from the Paris Agreement. In February, 95% of signatories missed the deadline to submit their new targets; by the end of August this still stood at 85%. In other words, just three months before COP30, the NDC process was teetering on the brink of failure.
However, a late rally in the eight weeks before COP30 shifted the picture – a fact that perplexingly seems to have been lost on journalists and delegates alike. Two thirds of countries had announced or formally submitted their new 2035 targets. Once – as expected – India announces its new NDC before the end of the year, at least three quarters of global emissions will be covered by the new 2035 targets, with only two G20 countries lacking concrete new targets.
Our data shows these new emission reduction commitments are substantive. China, the world’s largest emitter, has pledged absolute economy-wide emission reductions for the first time – an anathema for Beijing in previous negotiations rounds. Other key emerging economies have also committed to peaking emissions and absolute reductions – including Indonesia, Turkey, Brazil and Mexico – signalling that development and decarbonisation can go hand in hand.
See also: COP30 continues: Financial stability warning, a just transition and nature disclosure update
Several advanced economies, too, have set material new targets. After eleventh hour negotiations, the EU agreed its NDC days before COP in the form of a legally binding commitment. This will require the bloc to half its emissions in the space of 10 years – and then to half them again in the five years thereafter. The UK’s target is even more ambitious, while Japan, South Korea, Australia, Canada too have made significant new commitments. This will have momentous consequences for industry, as meeting these new targets will require tackling emissions in so-called hard to abate sectors in earnest.
Cynics may argue these are just empty promises, but the track record suggests otherwise. In 2015, the EU originally set a 40% reduction target for 2030, before increasing it to 55% in 2020. The EU’s latest projections show the bloc’s trajectory is off this goal by a whisker, at 54% emissions reduction. China too, has consistently outperformed its own climate targets, and the G20 are in aggregate not far off hitting their goals.
In aggregate, these new national targets point to significant acceleration in emissions reductions beyond 2030, of 2.5-3.4% per year from 2030-2035 (vs 0.5 to 0.7% pre 2030) even if they are still not enough to put the world on track for goal of the Paris Agreement to limit global warming to well-below 2°C.
For investors, the signal from COP30 is clear – transition risk will accelerate in many key markets. This has broad-ranging implications for key sectors, from the growth of the green economy to transition plans of corporates.
Focusing on the summit dynamics distracts from the fact that the Paris Agreement just passed a critical stress test. COP30 demonstrates that the NDC process at the core of the agreement continues to deliver real progress – and can do so even in an age of political fragmentation and geopolitical turbulence.