Climate talks get under way and the world prays for more than hot air

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Good evening.

The critical COP28 climate summit is now well under way in Dubai, where negotiators for the next two weeks will be haggling over the best way to limit global warming, phase out fossil fuels and determine who should help poorer countries pay for climate damage.

The meeting began with news that five countries and the EU had pledged more than $420mn for a new “loss and damage” fund to help developing nations deal with climate change after it was proposed at last year’s COP27. This was followed by confirmation of yesterday’s FT story that the United Arab Emirates would put $30bn into a new fund that will invest in “global climate solutions”.

However, as our Moral Money newsletter team in Dubai points out, the pledges from rich nations for the loss and damage fund fall well short of what is needed.

Optimists will argue that the agreement is better than nothing, and that this should be regarded as seed capital ahead of far larger sums to follow, says Moral Money editor Simon Mundy. But no one has yet made clear how these initial hundreds of millions will lead to the hundreds of billions that are needed. (Premium subscribers can sign up here for Moral Money updates every week day during the summit)

Critics have also pointed out the preponderance of bankers, consultants and other lobbyists among the estimated 80,000 strong attendees, as well as the fact that the summit host, COP28 president Sultan al-Jaber, is also boss of the Abu Dhabi National Oil Company. He vigorously defended himself on the eve of the conference against suggestions that he had used preparatory meetings to explore oil and gas deals. 

There is also near silence on the “polluting elephant” in the room, as columnist Gillian Tett puts it: the subsidies that governments currently provide for fossil fuels, for example by offering petrol or coal to consumers and companies at artificially cheap prices.

Statistics meanwhile underline the need for action. The World Meteorological Organization said yesterday that a record-breaking 2023 — possibly the hottest year since measurements began — will be followed by more of the same in 2024

FT columnist and COP veteran Pilita Clark offers a final note of hope. Despite starting too late and going too slowly, we understand better than ever what needs to be done, she writes. “Many of the remaining roadblocks are political and, for the first time, we are starting to see how they might eventually be overcome,” she concludes.

Need to know: UK and Europe economy

There were more signs of stabilisation in the UK property market as house prices unexpectedly rose again in November, according to lender Nationwide. A revision to rent statistics, which will be used in official data from next March, pointed to slightly higher UK inflation.

Eurozone inflation fell more than expected to 2.4 per cent in November, thanks to falling energy prices and slowing growth in food and services prices, raising hopes that interest rates could soon be cut.

Washington is aiming to halve Russia’s oil and gas revenues by 2030, a US diplomat told the FT, arguing western sanctions would be needed for “years to come”.

The US said it was “profoundly concerned” about Turkey’s role in facilitating Hamas’s access to international finance, highlighting how the war in the Middle East is fuelling tension among Nato allies.

Need to know: Global economy

The Opec+ cartel agreed additional cuts in oil production next year to boost the market but crude prices still fell due to signs of strains within the group.

Billionaires got more of their assets through inheritance than wealth creation this year for the first time in nine years of monitoring from Swiss bank UBS. A total of $141bn was amassed by 84 self-made billionaires, while $151bn was passed on to 53 heirs.

Chinese manufacturing activity shrank for the second month in November, according to the country’s official manufacturing purchasing managers’ index.

Venezuela is to hold a referendum on seizing an expanse of Amazonian jungle in Guyana. The Essequibo area, long-claimed by Caracas, is resource rich, including offshore oil deposits, and has helped make Guyana since 2019 the world’s fastest-growing economy.

South African president Cyril Ramaphosa kicked off the country’s general election in an attempt to drum up enthusiasm for the ruling party that has been in power since the advent of democracy in 1994 but faces the real prospect of defeat.

Need to know: business

Social media site X is racing to revamp its advertising business after owner Elon Musk hit out at a boycott from big brands. Musk’s Tesla is also at the centre of a growing labour row over collective bargaining in Sweden.

Activist investor Nelson Peltz launched a second proxy battle at Walt Disney after it rejected his push to join the board, setting off another bitter fight with chief executive Bob Iger. 

Global bank chiefs hit out at US regulators’ plans for new industry capital rules, warning that the proposals were “fighting yesterday’s war” while putting financial market liquidity at risk.

A new Big Read tells the story of how China’s Huawei surprised the world by managing to develop a homegrown cutting-edge chip after being cut off from global semiconductor supply chains by the Trump administration.

The death of the store has been forecast many times as online shopping advances, but two Scandinavian corporate behemoths — Ikea and Lego — are betting big on the continued relevance of bricks and mortar.

Science round-up

The UK Biobank is to publish the largest-ever set of genetic sequencing data to boost the research and development of drugs to treat diseases, ranging from heart conditions to cancers. The £200mn project is a collaboration funded by the government, Wellcome Trust, Britain’s biggest biomedical charity, and four pharma companies.

Researchers at Google DeepMind have discovered 2.2mn crystal structures that could lead to progress in fields from renewable energy to advanced computation. The theoretically stable but experimentally unrealised combinations are far larger than the number of such substances unearthed in the history of science.

A new competition aims to encourage technological breakthroughs that will help people live longer and healthier lives. The X Prize, a US-based non-profit organisation, is offering $101mn for research teams that can show they can develop treatments that will restore key muscle, brain and immune functions for 65-to-80-year-olds.

The first commercial long-haul flight powered by so-called sustainable aviation fuels — in this case a mix of waste cooking oil, animal fats and other unorthodox ingredients — took off from London for New York. Other potential sources include biomass which absorbed CO₂ when it was alive, while in the longer term, the aviation industry hopes to scale up nascent technology to create cleaner fuel by combining CO₂ sourced from the air with green hydrogen, using renewable electricity.

The ineptitude of government ministers on display at the UK Covid inquiry gives a clear message, writes Anjana Ahuja: this must be the last generation of politicians that cannot get its head around science.

A study of more than 2mn people’s internet use found no “smoking gun” for widespread harm to mental health from online activities such as social media and gaming.

The Tech Tonic podcast series on superintelligent AI tackles the question: can chatbots think?

Some good news

Conservationists in South Africa have found and photographed for the first time a long-lost species of mole which scientists believed had disappeared forever.

Something for the weekend

Try your hand at the range of FT Weekend and daily cryptic crosswords.

Source: Economy - ft.com