By early November, 2024 was on track to be the warmest year on record, a trend evidenced globally—from deadly Spanish floods to drought across most of the U.S. Insurance companies curtailed coverage in high-risk areas, highlighting escalating climate-related challenges. Given these circumstances, one might have anticipated stronger commitments to emission reduction at the U.N. climate talks in Baku, Azerbaijan.
However, the COP29 negotiations descended into disputes, resulting in a compromise: developed nations pledged $300 billion annually in climate finance for Global South countries. While this preserved a sense of optimism, it fell short of addressing the crisis’s magnitude. Chandni Raina, an Indian negotiator, aptly summarized the prevailing feeling: “We are extremely hurt.”
These talks concluded a year marked by complex climate action. As the climate crisis worsens, political constraints lead to incremental solutions—progress is evident, but far from sufficient. While few politicians deny the urgency of climate change, impactful action remains lacking.
Despite challenges, positive developments occurred. Clean energy economics improved, past policies yielded benefits, and innovators continued to advance solutions, paving the way for a sustainable future. The critical question remains: how will this transition unfold?
A thorough climate assessment necessitates examining scientific evidence. The World Meteorological Organization confirmed 2024 as the hottest year and warned of potential temperature exceedances of the 1.5°C Paris Agreement limit. A U.N. Environment Program report indicated that emission reductions of 42% by 2030 and 57% by 2035 are needed—technically feasible, but requiring substantial government intervention in clean energy, deforestation, and industrial decarbonization.
The political landscape presents obstacles to such large-scale programs. In the EU, a rise in right-wing, climate-skeptic politicians impacted the European Parliament. While Ursula von der Leyen remains President of the European Commission, her focus will shift towards streamlining existing policies rather than introducing new ones, prioritizing competitiveness and a just transition. Wopke Hoekstra emphasized the EU’s continued leadership while acknowledging the need for balancing climate action with economic competitiveness.
The U.S. presents a particularly challenging political context, with the election of President Trump, who has vowed to dismantle the “Green New Scam”—referring to the Biden administration’s clean energy initiatives. While complete repeal of the Inflation Reduction Act might be difficult due to job creation, his return dampens global climate efforts. Investors reacted negatively, Global South nations experienced reduced diplomatic pressure, and some companies retreated from public climate commitments. John Podesta, Biden’s climate envoy, acknowledged the potential setbacks and past U.S. shortcomings.
The convergence of severe scientific findings and political realities paints a difficult picture: the fight against climate change has become significantly more challenging. Nevertheless, positive signs persist.
Regardless of political complexities, clean energy deployment accelerated due to economic factors (renewables’ cost advantage) and energy security concerns. Global green technology investment reached nearly $2 trillion annually, surpassing fossil fuel investment. Nuclear power saw a resurgence as a zero-carbon solution, particularly for data centers.
Furthermore, innovative 2024 initiatives offer future promise. Financial innovations facilitated climate project investments, including initiatives leveraging public funds to de-risk private sector investments in the Global South. While still nascent, these efforts’ impact will increase with scaling. Policy innovators explore solutions for the new political environment, such as linking emissions reduction with trade.
The energy transition’s inevitability is frequently discussed, and it remains a reality.
Will it be swift enough? Current prospects are concerning, yet resignation isn’t warranted. Every fraction of avoided warming is crucial. A conversation about organizational restructuring within a bank focused on climate action highlighted the significance of incremental changes that cumulatively create substantial impact. This approach—small changes yielding large-scale results—is valuable as we move into 2025. As one individual noted, “Forecasts are not destiny. You can change destiny, but you have to work at it.”