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Challenges of climate change and energy transition

The energy transition is key to addressing the challenges of climate change and effectively reducing greenhouse gas (GHG) emissions.

Carbon markets and their role in the energy transition
Carbon markets contribute to the energy transition by limiting and controlling greenhouse gases emitted into the atmosphere.What are carbon markets? Carbon markets are one of many actions to slow down climate change. They limit and control the amount of carbon dioxide (CO2) and other greenhouse gases (GHG) emitted into the atmosphere.  How do they work? Carbon markets are based on the sale and purchase of carbon credits or certificates for reducing emissions of greenhouse gases (GHG). These credits grant the holder permission to emit a set amount per year of metric tonnes of CO2 or the equivalent in other GHGs. A company emitting GHGs has a set number of credits, meaning they are only allowed to emit that amount of GHGs in a year. At the end of the year, if that company had invested in energy efficiency or non-emitting technologies, it may have unused credit. On the other hand, another company may have exceeded its allowed credit for GHG emissions.  To respond to these situations, the carbon market creates the possibility of purchasing and selling credit. For the company that invested in non-emitting technology, this additional income helps recover the investment costs. The company that needs to purchase credit and hasn't invested in updating its equipment will see that its production process is more costly to operate given the need to purchase credits to emit more GHGs that hadn't been mitigated or controlled in its processes. Carbon markets are a tool that makes way for the sale and exchange of emissions allowances. And in that way, limit and control the amount of CO2 and other GHGs emitted annually to the atmosphere.  They also represent an incentive to invest in low-carbon emissions technologies. These markets may be national or international, and Europe's is currently one of those most developed.
Climate Summits
Climate summits have the purpose of monitoring commitments and agreements made by countries to mitigate climate change.Climate change is one of the most significant challenges humanity faces today. It's a global problem that must be tackled urgently. Greenhouse gas (GHG) emissions in the atmosphere are warming the Earth's temperature and causing dangerous and irreversible economic and environmental impacts. Global warming provokes, among other changes, more extreme weather that affects current and future generations and as a consequence, can have increasingly more serious repercussions on the economy, environment, our health, and daily life, in general. Decarbonising the economy must be a paramount goal and requires a structural change in the energy model and transformation in our production and consumption. Against this challenge, the energy transition must be the centre of every political and economic strategy to facilitate decarbonisation in all sectors, especially industry, mobility, and electricity and to encourage the incorporation of primary energy sources with low CO2 emissions.   International coordination mechanisms The increase of GHG emissions into the atmosphere is closely related to the use of fossil fuels, and the energy sector is called to play a vital role in addressing this global challenge. Growing consciousness of this environmental issue has led to several international agreements for achieving environmentally-sustainable economic growth. First came the principal international mechanism, the United Nations Framework Convention on Climate Change (UNFCCC), which gave rise to the Kyoto Protocol and the decisions and commitments made at the various "Conferences of the Parties" (COPs) that resulted in the Paris Agreement in 2016 and the Climate Summit (COP26) held in Glasgow in 2021. Climate summits Climate summits consist of annual meetings between UNFCCC signatory countries to track the progress of commitments made in previous editions. The UNFCCC began in 1992 at the Earth Summit in Río de Janeiro and set a precedent for the protection of the environment. There, for the first time, a multi-lateral treaty recognised that climate change was a global problem. The signatory nations were obliged to adopt measures to "stabilise" the concentration of GHGs in the atmosphere to conserve the environment.  What is the mission of these climate summits? Annual climate summits or COPs aim to assess how member states are applying the content of the previously agreed treaty and furthering agreements to fight climate change. Thus, they are the most important framework for discussion in this field and a supranational instrument for decision-making and advancing the proposed objectives. How many climate summits have been held? Including the first climate summit, or COP, held in 1995 in Berlin, 26 conferences have been held, hence the number assigned to the recent summit in Glasgow. Not all the COPs have had the same relevance. Some have made just minor progress, while others ended in disaster – for example, 2009 in Copenhagen, where China and the United States found themselves at an impasse and declared the commitments not legally binding – but others have been consequential, such as COP3, when the Kyoto Protocol was adopted, and COP21, where the Paris Agreement was born.
Carbon markets and their role in the energy transition