From 11 November 2024 to 22 November 2024, the 29th United Nations Climate Change Conference (or Conference of the Parties of the UNFCCC), more commonly known as COP29, will be held in Baku, Azerbaijan. Anticipation builds for regulatory updates from Canada and the US, with the recent US federal election adding uncertainty to the policy landscape.
COP29 may be the last major opportunity for the current U.S. administration to solidify key climate achievements. At the same time, Canada could use the conference to announce pivotal steps in its climate policy roadmap. This article will focus on the announcements or priorities that could come from Canada and the US, using COP29 as the milestone for national announcements.
Each November marks the release of Canada’s annual Fall Economic Statement (FES). No date has yet to be confirmed for the 2024 FES, but it is expected in the coming weeks. Expectations for this are high that this year’s statement will reinforce financial incentives for decarbonization in line with Canada’s emissions reduction goals, trying to get some final initiatives under the Trudeau administration in place before a federal election. Further, draft legislation for outstanding Investment Tax Credits (ITCs) on clean electricity and electric vehicle (EV) supply chains is expected following the 2024 FES, which could be initiated following COP.
Previous COPs have been used as a platform to announce climate initiatives, later included and legislated through the FES, Budget, or other bills. For example, the cap-and-trade approach for the Federal Oil and Gas GHG Emissions Cap was announced at COP28 last year, alongside the publication of a draft framework. COP29 could lay out funding or tax provisions to support the rollout of the Clean Electricity Regulations (CER), a policy setting emissions limits on electricity generators intended to reach a net-zero electricity grid in Canada by 2035.
With recent consultations on the draft CER, the Government of Canada has communicated its intention to release final regulations before the end of the year. With the regulation facing backlash from stakeholders, such as Alberta Premier Danielle Smith, the regulation is at risk of removal from a likely incoming conservative government at the next election. Trudeau’s government is aiming to get outstanding policies in place before an election, making COP29 likely timing for the release of the final version.
In the US, President-elect Donald Trump’s upcoming return to office marks a potential turning point for federal climate policy, with his previous administration known for rolling back climate regulations. With President Biden’s administration still in office until January, COP29 may present the current administration’s final opportunity to push forward key climate objectives and strengthen recent gains under the Inflation Reduction Act (IRA). This could include accelerating the rollout of clean energy projects, increasing funding for projects under the IRA, and strengthening international climate finance commitments. While Trump previously overturned many environmental policies, the IRA has been framed as an economic policy and supports significant investments in key US sectors, including funding to red states. Therefore, the IRA may remain but could face some regulatory risk on policy design or funding allocations. There is also speculation that Biden’s team may seek to finalize regulations that could impose stricter methane controls on oil and gas producers, a policy important for reducing short-term emissions in the US.
At COP29, the Biden administration may also use its platform to reassure global partners that recent US climate achievements won’t be entirely reversed under the incoming Trump administration. This could mean highlighting policies that are difficult to dismantle, like long-term contracts for renewable energy projects or further establishing federal incentives for carbon capture and storage. These moves would aim to underscore the US commitment to global climate goals, even as domestic policy faces uncertainty.
ClearBlue will continue to monitor North American regulatory announcements made at COP29.
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